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Why was Caixa Geral audit hidden for three years?

MinisterCentenoFinancePortugal’s Finance Minister, Mario Centeno, went to parliament today and admitted that yes, there had been mismanagement at Caixa Geral de Depósitos poor and that an audit and a new inquiry were necessary.

Centeno was in parliament for the second time in less than a week to respond to the EY audit that has identified the appalling loans given by the state owned bank between 2000 and 2015.

The government has gone into protection mode, not than anyone is blaming it, stating that it was the first in 20 years to request an audit of Caixa Geral’s accounts and during this period, “there have been seven governments and eight finance ministers.”

Also that the previous government injected €1.65 billion into Caixa Geral without a true picture of the mismanagement and that the right wing government had wanted to privatise Caixa Geral, which the socialists haven’t.

The final, hugely amended, version of the EY audit report gets to parliament at the end of the week but MPs don’t expect many new revelations as most of the large loans that failed dismally already have been available after Joana Amaral Dias leaked the first version of the audit report on CMTV.

It is feared and expected that the final EY document will reach MPs in a purged state, with information removed that Caixa considers to be covered by banking secrecy including the names of its customers who have received credit and those responsible for advancing it.

The Communist Party remains unsupportive of the call for a new inquiry but the Left Bloc is more strident,  with Mariana Mortágua wanting those responsible to be identified, “if there was political interference from governments, especially the Socialist Party government, the country has a right to know. If there was complacency in the management and supervisory bodies, the country has the right to know. If those managers responsible are in other high positions in finance, the country has right to know. And for that we need names, companies and scrutiny.”

MP Leitão Amaro from the PSD accused Mario Centeno of having kept the EY audit hidden in the drawer for months, nay, years.

Amaro, asked Centeno, “Why have you been trying to stop this clarification for three years? In 2016 you decided to put €5,000 million into Gaixa Geral and it takes three years to get the audit.”

Still, a new audit will be commissioned by Centeno and maybe one day the regulator, the governor of the Bank of Portugal, Carlos ‘Magoo’ Costa will offer us an insight as to how Caixa Geral was allowed to operate when the directorate was out of control and clearly breaking its own credit rules.

Portuguese MEP Ana Gomes wants Brussels to press the Portuguese government to ensure that the former directors of Caixa Geral de Depósitos will be held accountable for their “bad management” at the bank.

In a letter sent last Friday to Pierre Moscovici, European Commissioner for Economic Affairs, and three other commissioners, the MEP asked also that CGD’s largest debtors be forced to pay off the defaulted loans and be prevented from access to European funds.