Governor of Bank of Portugal back before parliament as poll gives resounding “thumbs down”

With his new five-year mandate – voted through by the coalition government – hugely unpopular among Portuguese rank-and-file, the Governor of the Bank of Portugal Carlos Costa was back before parliament last week dodging “extremely difficult questions”.

The man whose face appears on so many protest placards that he may wish he received royalties, Costa was grilled over the BES bank debacle.

As Observador website explained before the audience: “Opposition parties will not let up over the management of BES/GES.”

It was the first time someone signalled for the role of Governor of the Bank of Portugal had such an audience, the site added – but that’s all it was.

“Nothing changes in a nomination that is polemic,” Observador guaranteed.

As elsewhere in the national press details of a poll show that more than 52% of Portuguese people questioned think Costa is a bad, or very bad, choice to remain as governor, Observador gave the points that see even PSD MPs divided.

First are his ‘conditions’ for the job, which clearly the CM/Aximage poll has established he does not have: 52.5% of Portuguese people questioned consider he is a bad, or very bad, choice for governor, while 45.6% of Portuguese banks indicated they are not at all confident about his abilities. Over 28% of the banks questioned said they had “a little” confidence in him; nearly 15% said “very little” and only 9.5% described their confidence as “large”.

Second is the ability of his team – again not easy to defend bearing in mind the poll result.

Thirdly were the results of BdP’s internal audit over BES, which opponents consider Costa to be sitting on.

As Observador explained, Costa agreed that the BdP could have acted earlier, but he has been coughing discreetly ever since.

Issue four centres on the accusations Costa has made against BES administrators, and the fact that he has explained BdP’s investigations could take time as they involve “gathering information from abroad”.

Opposition MPs are not satisfied. They want guarantees that Costa is going full-speed ahead for lightening results – and as Público described after the audience, they did not get them.

The fifth issue that concerns critics centres on what Observador terms “the Achilles heel” of the whole financial rescue package: the sale of Novo Banco and Costa’s intransigence over the thousands of people whose life-savings were swatted into the “bad bank” with no provision to see them reimbursed by Novo Banco – either now or once the bank has been sold to very-possibly Chinese investors.

The next big question is the Novo Banco sale. Will it really manage to recoup the billions ploughed into it without reverberating on the taxpayer?

And then there is the issue of Montepio bank and fears that this too could be poorly supervised.

As often happens in these parliamentary audiences, it was a case of MPs voicing their fears and Costa dodging straight answers, reported Público.

“What they (MPs) wanted to know did not get an answer,” said the paper.

The less-than-transparent episode caused Communist MP Miguel Tiago “to conclude with irony that next time the nomination should perhaps be presented differently: Carlos Costa, employee of Frankfurt, who applies rules in Portugal dictated by the European Central Bank”, Público concluded.

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