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IMF “fed up of receiving negative surprises from Portuguese banks”

With yet another loud and angry protest by people who lost life savings in the BES collapse taking to the streets of Lisbon today, the irony of the latest article claiming that the IMF is “fed up of receiving negative surprises from Portuguese banks” has not been lost on online readers.

“The IMF is fed up? What about the people?” writes one, while another claims: “In these banking institutions, the administrators are the principal thieves and corruptors. They lose nothing – while the clients lose everything!”

The comments from the IMF come in a week when former Left Bloc leader and economist Francisco Louçã told Lusa news agency that the governor of the Bank of Portugal Carlos Costa is “a danger to the country”.

Curiously, the IMF claim of being “fed up” names no-one, and no bank, writes Diário de Notícias.

It followed the controversial third post-adjustment programme visit of the troika – which has been interpreted in many different ways since the men in grey left Portugal for another six-month absence.

Initially, it was touted by Expresso that ‘all was well’ with Portugal’s ideas for this year’s budgets.

Stories emerging today suggest Expresso may have jumped the gun – but nonetheless, DN is probably spot on with its story that the IMF is “fed up”. There is possibly no one in the country who would disagree that the litany of national banking disasters that has seen public debt skyrocket by another €5.3 billion in the last year has to stop.

According to DN, the IMF wants Portuguese banks to be ‘reinforced’ so that ‘negative surprises’ are avoided and the taxpayer is protected.

The inscrutable IMF mission ‘man at the top’ Subir Lall – a man who appears never to smile – is quoted as saying “recent events underline the necessity to continue consolidation efforts to improve banks’ profitability and the governing and quality of their assets”.

But how is the IMF proposing this can be done? Banks should “intensify efforts to reduce operational costs, sell non-essential, non-profitable operations and improve asset quality”, explains DN.

Hinting at the fact Francisco Louçã may have a very valid point, DN’s story adds that the IMF considers that “efforts should be made to strengthen internal governing” of the sector, so that problems “can be identified and resolved in good time”.

The text may have Carlos Costa reaching for another Alka Seltzer – if indeed he has recovered from Louçã’s vitriolic diatribe. But for this weekend at least, he remains the Governor of the Bank of Portugal – with a salary of over €15,000 per month – no matter how many nationals are ruined as a result of Portugal’s “negative banking surprises”.

natasha.donn@algarveresident.com