'Amending the State budget is the natural consequence of the public recapitalisation of Caixa Geral de Depósitos,' according to the Left Bloc’s Mariana Mortágua who argues that public money has to be used to keep the bank stable and reiterates that the Left Bloc will not accept redundancies at the State-owned lender.
Mortágua said today 'that if you argue the case for recapitalisation and that the bank remains publically owned, you can’t then be against the injection of public money.'
The MP was answering reporters' questions outside parliament after the finance minister admitted on Wednesday that the recapitalisation of Caixa Geral will mean amending the 2016 State budget if public funds are sunk into the bank this year.
The Left Bloc stance is much the same hogwash as from the Bank of Portugual whenever a bank goes bust on its watch, that it supports maintaining Caixa Geral as 'a stable bank to ensure that the financial system in Portugal functions and supports the economy by supporting companies but only if this is all done in a transparent way.'
All of Portugal's banks realised long ago that, with the State bailing them out when there is trouble, there is little incentive to behave responsibly - prudent risk analysis goes out the window.
Mariana Mortágua reiterated that the Left Bloc will not accept redundancies at the failed State lender, but would accept redundancies by mutual agreement as has been agreed with the government. The plan is for 2,500 staff to leave by 2020.
Of the left Bloc’s three conditions, it should remain public, it should be recapitalised and everything should be done in an above board and transparent manner, Mariana Mortágua said it’s only the last condition that is so far lacking.
"We want to know what led to this recapitalisation figure which is not yet fully agreed. We already have requested an audit, there is a commission of inquiry, and we look forward to that data," she said.
The Finance Minister Mario Centeno, admitted yesterday that the recapitalisation of Caixa Geral de Depósitos will indeed mean his amending the 2016 State budget despite the deal done with the European Commission to try and keep the refinancing ‘off the books.’
The €4.6 billion needed will not go towards the deficit as the sum is not defined as State aid, but it will add to the overall debt level of the country and impact on its credit rating.
Jorge Pires, a member of the political committee of the Central Committee of the Portuguese Communist Party, said his party always will be against the loss of jobs at Caixa Geral and against any decrease in the public bank’s size or activity.
"The key issue is that the recapitalisation of Caixa Geral is implemented, fully safeguarding the public status of the bank and ensuring that the restructuring plan defends jobs and workers’ rights.”
See also: 'European Commission agrees recapitalisation for Caixa Geral de Depósitos'
