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ECB boss Mário Draghi in Lisbon today to give Portugal “advice”

Against gathering financial stormclouds, ECB president Mário Draghi arrived in Lisbon this morning for lunch with the President of the Republic, the prime minister and the governor of the Bank of Portugal.

He comes at the behest of president Marcelo and will go on to address members of the Council of State.

It is a groundbreaking moment – in that this is Marcelo’s first Council of State, and inviting figures from ‘outside’ is a break from tradition.

Público says “if there are not surprises”, Draghi is simply expected to reiterate all the advice that has emanated from creditors over the last few months: the need for “a prudent budgetary strategy”, “compliance with European rules”, and “defence of the performance of the Bank of Portugal” – something that left-wingers have been loathe to extend since the disastrous resolution of both BES and Banif.

But the ECB boss who has been orchestrating a major quantitative easing programme in a bid to kick-start Europe’s economy, is believed to be carrying a warning, along with all the advice.

If DBRS – the only ratings’ agency that does not rate Portugal’s debt as “rubbish” – changes its mind, the ECB “may have to stop helping” Portugal, writes Público, a situation that would put the country “in great difficulty”.

The Council of State “comes at a moment in which the government is getting ready to deliver its Programme of Stability and National Programme of Reforms to Brussels”, adds the paper.

While Draghi and his central bank “do not in theory have anything to do with the evaluation of these programmes”, they retain a “decisive role” in Portugal’s “capacity to get the finance it needs”.

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