Mário Centeno

‘Behaviour’ of Portugal’s central bank governor under scrutiny

European Cental Bank has ‘code of conduct’ that (should) apply to all members

In the context that Portugal’s central bank governor appears to have been willing to take on the role of prime minister due to the country’s spiralling political crisis, the ethics committee of the Bank of Portugal is being convened.

Explain reports, for the time being the European Central Bank is ‘refusing to comment on questions raised about the independence of Mário Centeno, governor of the Bank of Portugal, but it has highlighted the code of conduct that “applies to all members”.

“The European institution refers to the principle of independence that determines that members must act in the interests of the Union, and not in conformity with personal or national interests”.

Says a short piece published on SIC Notícias yesterday, the bank also says that members “cannot receive instructions from the governments of Member States”.

Euro MP Nuno Melo – currently the leader of Portugal’s CDS party, which is unrepresented in parliament – raised this point on Friday, following António Costa’s remarks about his desire to have seen Mário Centeno take the reins of the Socialist executive. 

The now acting PM returned to the subject in his address to the nation last night, insisting: “My concern was to enable the President of the Republic with an alternative to putting the country, three years from the end of a legislature, to dissolve a parliament and go again to an electoral process.”

As it transpired, President Marcelo chose the electoral process – but the fact remains that a former Socialist finance minister, moved by his party in power to the position of Governor of the Bank of Portugal, was open to the idea of returning to politics, and effectively abandoning his post at the country’s central bank. None of this appears to gel with the ECB’s code of conduct – and as commentators remarked following Mr Costa repeat referral of the plan, it shows a ‘disrespect for the autonomy of institutions’.

In Nuno Melo’s perspective, the option favoured by the acting prime minister “proves a mutual functional and political dependence between the PS in government and the governor of the Bank of Portugal, (…) which is unacceptable and dangerous“.

ECO online broke the news of the convening tomorrow of the central bank’s ethics committee, to be presided over by Rui Vilar, former chairman of State Bank Caixa Geral de Depósitos.

In the words of the online, the committee “will evaluate the conduct of the governor and eventual conflict of interest after Centeno was proposed by António Costa to succeed him as prime minister”.

But the bottom line is that there may well be no appetite for any kind of censure. 

On Friday the chairman of Caixa Geral de Depósitos (CGD) Paulo Macedo (himself a former Socialist minister) defended Mário Centeno as “serious and competent” and saw no problems of incompatibility or conflict of interest in proposing him as prime minister, says ECO. 

Paulo Macedo considered that trying to remove the governor because of this episode “would not help the stability” that the country needs at the moment.

If this sounds just a little too ‘chummy’ (so many of the players have strong connections with central power), Nuno Melo has ensured the questions have also reached the ECB

He has sent a formal request to the institution led by Christine Lagarde, asking “how it views” the situation “in the light of the ECB’s code of conduct and the principle of independence.” 

He has also asked whether the ECB “intends to carry out any analysis (…)  in order to ensure compliance with its code of conduct and safeguard the independence of national central banks within the European System of Central Banks.” ND