Former finance minister lifts lid on Portugal’s burning issues

Former finance minister Vítor Gaspar is back in the headlines this week, answering “various questions” on how things could have been allowed to get so bad at State bank Caixa Geral de Depósitos.

Putting much of the blame on the government under José Sócrates, Gaspar managed to allude to multiple burning issues – not least the kind of political meddling that has left prosecutors chasing Ariadne’s threads across continents in Operation Marquês.

As we write this story, the ‘deadline’ for accusations to (finally) be brought in the investigation that began almost three years ago looks like being extended yet again.

Prosecutors are citing “exceptional reasons” largely to do with letters rogatory that have still to receive answers from authorities in Switzerland and Singapore.

Meantime, Sócrates’ defence team has (again) demanded that the case be thrown out due to the fact that it has exceeded legal time limits.

But between all the noise, certain ‘inconvenient truths’ appear to be bobbing to the surface linking CGD and its extraordinary problems to Marquês, BES and an opaque VIP ‘underworld’ where anything appears to be possible if you know the right people.

In Vítor Gaspar’s comments this week, the former PSD finance minister connected CGD’s woes directly with Marquês.

He said the bank’s “specific vulnerabilities” came from its “involvement in the property, construction and tourism sectors, lack of success in its expansion strategy in Spain and financial participations dictated by political priorities”.

The latter was almost certainly a reference to CGD’s multi-million euro ‘participation’ in the Algarve’s Vale do Lobo resort.

Only last month, Sol newspaper revealed public prosecutors have concluded that Vale do Lobo was effectively “acquired and controlled” by a businessman “without money” (Diogo Gaspar Ferreira).

An initial investment of “just €120,000 lent by a bank” was all that was required for Gaspar Ferreira to clinch “one of the largest tourist complexes in the country”.

The risks of the operation, “almost €300 million” were left with CGD which, says the paper, became simultaneously a Vale do Lobo shareholder and a financier – something that “goes against all good bank management practices”.

As national tabloid Correio da Manhã has repeatedly explained, “until today, CGD has not recuperated a penny of the capital invested and Gaspar Ferreira remains at the head of the resort, being an arguido (official suspect) in Operation Marquês” along with 24 others, including José Sócrates.

Gaspar Ferreira was once again called for questioning to the offices of DCIAP (department of criminal investigation and penal action) in Lisbon earlier this week – the inference being that prosecutors wanted to clarify the use of certain sums of money, and certain business dealings.

“He remained in silence”, reports Correio da Manhã.

Until Marquês is closed and prosecutions are finally levelled the ‘noise’ in the press will continue. But one thing appears certain, before the political decision-making that Vítor Gaspar believes led to CGD’s billion euro woes, it “seemed to be a bank with a comparatively solid position”.

Things have now tipped so far in the other direction that Portugal’s current finance minister Mário Centeno believes that revealing the extent of the State bank’s debts could prompt an “irreversible drop in confidence”, leading to “systemic consequences that would be difficult to determine”.

Reading between the lines, the growl emanating from Germany’s finance minister Wolfgang Schauble yesterday (click here) can now be put into context.

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