CGD’s liabilities now pegged at €5 billion and rising

The political furore over what went wrong at State bank Caixa Geral de Depósitos – and more importantly how much it is all going to cost – is continuing to churn out dizzying numbers and convoluted column inches.

Perhaps the bottom line is that liabilities now appear to be in the region of €5 billion-and-counting.

CGD offshoots in the Cayman Islands, Macau, New York and South Africa will have to be sold, along with hundreds of branches here in Portugal and its archipelagos – taking with them at least 2,500 jobs.

Opposition MPs are understandably demanding ‘explanations’, going so far as saying there should be an outside audit and full parliamentary investigation.

As this story was being written, noticiasaominuto reported that the government has agreed to an “independent audit”.

The controversy centres on the fact that the ‘bad debts’ involved were all undertaken pre-2011.

In other words, during the Socialist administrations headed up by former PM José Sócrates, himself involved in at least the Marquês and Monte Branco investigations into alleged institutional corruption.

In the middle of all the liabilities are loans which are also at the centre of judicial probes – and then there is the issue of “interventions by bank regulators” which did nothing to improve matters.

Correio da Manhã presents the confusion today as likely to cost “10 days of Portugal’s GDP”.

The billions needed will not simply fill CGD’s hole, they are needed as part of the government’s restructuring programme.

But the problem with the programme is that when it was presented by Finance Minister Mário Centeno in a “kind of press conference” (words of the former ruling PSD party), very little was explained.

“We don’t know anything,” António Leitão Amaro, deputy leader of the PSD’s parliamentary group explained, adding that “every week that passes, the alleged amount (of money owed by CGD) increases and uncertainty grows”.

Regarding the “kind of press conference” given by Centeno, Amaro said it was “strange” that the government chose to hold one that “did not inform, did not explain and only served to aggravate doubts, uncertainty and mistrust”.

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