After all the expedient political spin, Portugal’s Accounts Court has come out and said it: it is the country’s taxpayers who are footing the bill to ‘bailout’ Novo Banco “contrary to promises of the governments of Passos Coelho and António Costa”.
Even worse, the final bill for securing the so-called ‘good bank’ constructed from the catastrophe of BES (Banco Espírito Santo) could reach €10.3 billion.
Say reports: “The Accounts Court audit is categoric: the Bank of Portugal and the governments of 2014 and 2017 announced to citizens that the resolution of BES and sale of Novo Banco would cost the public treasury nothing”. However, up till December 2019, it had already cost the public €7.8 billion – and there is still quite a bit more to come: €914 million as per terms of the agreement for contingent capital, and €1.6 billion under an agreement with the European Commission for ‘worst case scenario’ (which has always been highly likely).
As a result the court has concluded there was indeed “a lack of transparency in communicating the impact on of the BES resolution and the sale of Novo Banco (to US equity fund Lone Star) on the sustainability of public finances”.
The damning conclusions appear to have been rubbished by the Bank of Portugal, but a source for the court has responded “the contradiction is simply between what was announced and reality”.
This is a development that comes after years in which left-wing party Bloco de Esquerda has been doing its utmost to show how much the Portuguese electorate has been deluded.
A leader writer in Correio da Manhã concludes: “the Portuguese have paid a heavy price in being European guinea pigs for the resolution of a large bank. Almost seven years since the implosion of BES, Justice has still not put those responsible on trial. This is simply another sad chapter in the history of tragedies in Portugal”.