CGD ‘horror stories’ fill Portuguese news as finance minister (and PM) end up with egg-on-face

With horror stories of alleged dodgy dealings, debts sanctioned to the tune of hundreds of millions of euros and meetings organised to ‘change the law’ in directors’ favour, State Bank Caixa Geral de Depósitos is being hauled unceremoniously through the mud today.

Indeed leader writer Carlos Rodrigues calls the gathering storm “enlightening as to the state of our elites”.

Certainly, it reinforces the old adages about truth and politics (and how they don’t mix). Even the prime minister appears to have been caught up in blatant lies.

As PSD and CDS opposition MPs delight in the controversy, the position of Finance minister Mário Centeno is looking exceedingly uncomfortable.

Centeno has long denied that he “did a deal” with the last incoming CGD administration so that they were not bound by Constitutional rules to reveal the extent of their assets.

One could argue that this is ancient history – as the administration has long since resigned. But today the exchange of correspondence in which Centeno and Domingues refer to the deal has been reproduced in newspapers while Público reveals that the government went as far as to “negotiate alterations to the law” that demanded asset disclosure – leaving a choice of options up to former CGD boss António Domingues himself.

“Everything was left for the ex-CGD president to decide what he wanted”, said the paper.

Considering Centeno has always denied the deal – yesterday seeing PM António Costa ride to his support – Público’s allegations could not be more damning.

But even worse, the less-than-transparent shambles is now being viewed in the context of the rise in interest levels that Portugal is paying on its debt.

Says an opinion column in the country’s best read tabloid: “The country continues singing and smiling while it is being hammered by the markets with obscene rates of interest… Everything’s fine, says the government. Really, really fine adds the president but the combined cost for Portuguese taxpayers of two bond sales yesterday is almost 54 million euros more than it was a few months ago. Even last year, the Portuguese paid hundreds of millions over the top due to the progressive increase in interest that is hammering the second highest debt in Europe”.

Correio da Manhã’s deputy director adds that Portugal is still being seen by overseas investors as an over-indebted country with a veritable “volcano” in its banking sector.

With powermakers apparently proven liars as well, the week is not heading towards a peaceful close.

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