The leader of the Left Bloc said today that the solution the government is negotiating with Brussels over the sale of Novo Banco, is "the worst of both worlds" because it leaves the State at risk but does not allow the government to appoint directors once 75% is sold to Lone Star.
Martins said that in a scenario where the State ends up with 25% of the shares, but no say in the operation of the bank, the State has "responsibility for future impairments without a word in its management."
The Communist Party has criticised the way in which the European Commission and the European Central Bank have been meddling in the sale of Novo Banco, "The interference of the ECB and the EU in matters falling within the scope of the sovereign of the country is unacceptable."
The intention to hold cross-party meetings to discuss solutions was announced on Sunday night but no date has been set despite the Socialist Party government being dependent on the Left Bloc and the Communist Party for its power.
If the scenario where the State hangs onto 25% of Novo Banco’s shares, but without any right to appoint directors so as to satisfy Brussels, the government will face opposition from its political support and needs the left wing parties on-side sooner rather than later.
Both left-of-centre parties said they were unaware of any meeting being called by the Government to discuss the Novo Banco sales process.
Brussels has demanded that the State keeps 25% of Novo Banco with the European Commissioner for Competition, Margrethe Vestager, noting the possibility of the Portuguese State holding 25% of the capital and stating that it should then make “other commitments,” while not specifying anything specific.
"Of course, we have discussed with the Portuguese authorities, as we discussed with others, if they are in a situation where they want to change their commitments. Our mission is to ensure that the changes are balanced, so if someone wants to do something, then it is necessary to balance this by taking on commitments in another area. But the process is still ongoing and it is the responsibility of the Portuguese authorities to guarantee the sale," said Vestager.
Vestager pointed out that "the sale of Novo Banco is, it is hoped, the last step of a very, very long process."
Last Friday, Portugal’s Finance Minister, Mário Centeno, said that negotiations for the sale of the bank are progressing "at a good pace," and considered that there are "conditions for the agreement," thus highlighting the lack of progress and widespread confusion that has dogged this sale process from the start.
Since February, the Government has been in negotiations exclusively with the American fund Lone Star which has offered just €750 million for the business. A sensible solution remains a distant dream, as does the repayment of the €4.9 billion thrown into the bank by Bank of Portugal governor, Carlos Costa.
