After all the umming and ahhing in the press recently, the European Commission has let it be known that it “does not see any problem” in the Portuguese State investing in its financially-strapped State bank, CGD – “as long as it does so like any private investor”.
The semantics involved centre on the dire need for a €4 billion cash injection to keep the bank afloat.
Call it a recapitalisation, an investment – even a bailout – but finally the government has heard it could well be getting the green light to plough yet more money into an ailing national bank, at the same time being allowed to ‘save face’.
Said competition commissioner Margrethe Vestager: “As a question of principle, a State can invest. It does not have to necessarily be State Aid. If the State invests like a private investor would, then this is excellent for us and, of course, it is not State Aid”.
Equally confusing has been the Finance Minister’s guarantee that any kind of recapitalisation of CGD “would not affect the deficit”, which is still running way over targets set by Brussels, but which looks more than likely to dodge any sanctions (laid down by rulebooks), for the simple reason that these would cause more problems than they could possibly solve.
In today’s national tabloid Correio da Manhã, for example, the economic section is given over to the fact that Portugal has already paid over €7.3 billion to the troika of lenders in interest, while it still owes around €70 billion.
The data, released by the DGO (Direção Geral de Orçamento), comes just a week before the IMF is due back in Portugal for yet another post-adjustment programme evaluation.
