President Marcelo is calling on the country’s banks to start repaying the millions of taxpayers who bailed them out in recent years.
He told reporters: “The banks owe the country”, he said. “We all know the reasons why…”
As companies are crying out for support in the context of the current pandemic – and hundreds of thousands of families are in ‘lay-off’ with bills mounting – Marcelo says it’s time to “agilise, facilitate, help”.
“This is an opportunity to repay what every Portuguese contributed to the sector in recent years”, said the head of state, referring to the €25 billion in bailouts and recapitalisations that have been paid for by the nation’s taxpayers since 2007.
Thus on Monday, Marcelo will be ‘meeting’ with the presidents of the country’s five main banks – CGD, BCP, Novo Banco, Santander and BPI – to discuss the situation and what they can do to help families and businesses ‘now’.
This is a “race against time”, he stressed. “The economy needs money faster, families need money faster, workers need money faster, salaries need to be paid faster. This is a battle, which is also a battle for the banks…”
Says Expresso, Marcelo wants to establish first and foremost how robust the banks themselves believe they are. Then he means to ensure that they will play their part in this national disaster by acting on all the measures introduced by the government, and not dragging their heels.
The banks however have their own perspective on the crisis.
According to Expresso, they view the credit lines opened by the government as among the smallest – and least helpful – in Europe.
Spain, for example, has set aside €100 billion to help firms, payable over a period of five years, deferred for 12 months. They are ‘lines that allow the companies to continue with their commitments to employees, suppliers and the bank itself. This way, when the crisis is over, the companies’ debts will not have increased’.
Portugal however is only offering €3 billion in lines of credit. Yes, the measures see businesses given a six-month payments’ amnesty, but at the end of six months, they will be left carrying more debt (in the form of repayments for the credit lines) and essentially “in a far worse position than their European partners”, a banking source told Expresso.
In other words, banking bosses are looking far further down the line, and not encouraged by what they see. Indeed, they think it’s ‘counterproductive to attack the banks’, and certainly unwise to fan the flames of general distrust in the financial system.
“We are in a marathon”, a banking source told Expresso. “But our efforts will be crucial from the 500-metre mark. The situation now is to absorb the impact with the least losses possible so that later we can think of economic recovery.”
But there’s more, says Expresso. President Marcelo wants to see ‘how far banks are prepared to go’ to help the country generally. Is Novo Banco, for instance, prepared to find an alternative to the billion euros it was hoping to receive from the State for 2019? (click here).
Last week, PSD leader Rui Rio made an impassioned speech about it being “a disgrace and total lack of gratitude” if banks were seen to try and make money from this crisis.
This is the “essential part of the conversation” that Marcelo is hoping to have on Monday, concludes Expresso: “It’s about everything the banks can and should do for the country, with the certainty, as Rui Rio said, that if businesses die, banks will die with them”.