The Council of Ministers today agreed that Carlos Costa will continue as governor of the Bank of Portugal, the financial sector regulator. Under new laws, this is enough for Costa to continue.
The confirmation was announced by the Minister of the Presidency and of Parliamentary Affairs, Luís Marques Guedes, after today’s cabinet meeting.
Whatever Guedes thought of the appointment, his reply to some rather caustic questioning from the press was defensive, "The attitude of the governor and the board of directors of the Bank of Portugal has been one of great courage through a situation that has not been encountered before."
The Council of Ministers is making a "clearly positive assessment of the work of the Governor of the Bank of Portugal over the last five years," according to Guedes who failed to spot that by reappointing Carlos Costa and by saying that he has done an exemplary job, the government sends out a signal that mediocrity, blame shifting and a lack of grasp of a clear remit is perfectly acceptable for public servants in modern Portugal
The reappointment first was announced a week ago, until someone reminded the Prime Minister that he couldn’t just ask Carlos Costa if he wanted to carry on, without full inter-party discussion. Then a new law kicked in last week that covered exactly this topic.
Costa has been avoiding answering questions about his reappointment all week but after a cursory discussion in parliament, he will be confirmed in a post that gives him another 5 years in which to raise his performance at least to ‘adequate.’
There now needs to be a parliamentary hearing and a report, neither of which has any power to stop the appointment now that the Council of Ministers has decided who it wants.
Guedes denied that this process is completely useless, as gently hinted at by members of the press.
Asked about the criticism of Carlos Costa after his mishandling of the regulation of Banco Espírito Santo, Marques Guedes argued that the committee also had spotted some positive elements, which did not take long but Guedes did point out that Costa’s original appointment was under a previous socialist administration.
Costa’s name was put forward and agreed before the findings of the Bank of Portugal’s internal evaluation of the period leading up to Banco Espírito Santo’s failure.
The regulator already has said that the report will not be published because of "banking secrecy" but this has not stopped the Socialist Party from demanding an unabridged copy so the press should be getting a copy shortly thereafter.
Costa’s reappointment also has been made before the sale of Novo Banco, also before there has been a resolution of the problems surrounding the issue of commercial paper by Espírito Santo’s group companies that was foisted onto BES customers as ‘a safe investment.’
The socialists have complained that "The prime minister did not consult us on the proposed appointment. He just let us know that was going to announce his decision."
"The appointment of the Governor is made by resolution of the Council of Ministers on a proposal from the Minister of Finance and after a hearing by the competent committee of Parliament, which shall draw up its specification," reads the new law.
The same law adds that the remaining members of the Board of Directors of the Bank of Portugal are rubber stamped by the Council of Ministers from a final list submitted by the governor – all rather neat with nobody having to apply for the job and suffer the indignity of an interview as for most public appointments.
There is a passing nod to gender equality though as "The appointment of the members of the Board of Directors should seek progressively to have a minimum representation of 33% of each gender," with no explanation as to which the third gender might be.
