No surprises have come from today’s news that State Bank Caixa Geral de Depósitos has failed the European Central Bank’s stress tests.
The €5.1 billion recapitalisation plan, revealed last week (click here), was designed with acceptance of this reality in mind – but as pundits have explained, they are not optimistic that it will have all the desired results.
What is perhaps news today is that Frankfurt does not consider €5.1 billion is what is needed.
Explains Observador, €2 billion would be enough to “face the black scenario”, but the added €3.1 “will give the public bank margin”.
The website explains that CGD in effect failed the ‘worst test of all’ in stress scenarios, that of ‘capacity to resist aggressive economic shocks”.
Elsewhere, BCP has been deemed ‘healthy’ with a capital ratio of 7.2% in the ‘worst case scenario’, writes Observador.
Slow growth “puts government plans in check”
The nation’s best-read tabloid has been digesting data on Portugal’s very lukewarm economic growth and suggests it may stymie government plans for this year.
In the second quarter, growth has been pegged at 0.9% – up 0.3 % on the first.
As prime minister António Costa told reporters, if the country had continued with austerity, things could have been a lot worse.
But the truth is that private consumption (up 1.7%) is still nowhere near the 2.4% originally forecast.
Investment too has failed, in that it fell 3.1% when PS leaders had banked on it increasing by 4.9%.
CM explains exports are up, but only by 1.5% – when estimates were for 4.3%.
Criticism from the right-wing opposition has been fast and clinical, with former finance minister Maria Luís Albuquerque considering that the economy is “headed for stagnation” – but although the party agrees it is not satisfied, the PS mantra is that the way ahead is “the one we have to follow”.
Correio da Manhã is clearly not so sure – hence the headline about ‘plans in check’, without further examples of what this means.
Leader writers are also focusing on what they call “miserable pension increases”.
The paper’s main headline claims they “won’t even buy a cup of coffee”.
“Banks have taken €15 billion from Portuguese taxpayers to fill their black holes,” explains the paper’s deputy director Eduardo Dâmaso, “and no one has gone to jail for it”.
Former directors now cast as “villains” are ‘at home’ and given special dispensation to go on holidays while the country “pays out miserable pensions to 1.3 citizens who in 2017 can look forward to fabulous increases of between 0.48 cents and €2.50”, he writes. “What a great party they’ll have.”
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