This week is rapidly building up to be the week where everyone talks about banks.
Standing down as leader of the CDS-PP party after 16 years, Paulo Portas handed over the reins to Assunção Cristas on Saturday saying it was time for the governor of the Bank of Portugal Carlos Costa to stand down.
Talking for almost an hour as he bid an emotional goodbye to party faithful, Portas said he had only agreed to accept Costa’s new term at the head of the country’s banking regulator because the sale of Novo Banco was in motion.
But now the time has come for people to ask themselves if Costa “is part of the solution, or part of the problem”, he said.
Portas’ words echo those – admittedly much stronger – of Left Bloc leader Catarina Martins in December, as well as the warning sounded by prime minister António Costa that it was time to revise Portugal’s “institutional architecture” (click here).
With Cristas tipped to have the subject high on her agenda when she meets President Marcelo Rebelo de Sousa tomorrow evening (6pm), Carlos Costa’s €15,000-a-month job now looks very much in jeopardy.
Diário de Notícias claims Cristas will be going all-out to suggest “surgical changes to the Constitution” so that it will be the president who decides who the governor should be, not the government.
But this is not now the most pressing problem on the horizon, explains Expresso.
The issue of the week seems to be the risks attached to Portugal’s over-exposure to Spanish bank Santander (which only recently increased its business nationally by buying-up Banif).
According to Expresso, Portugal’s new president, its prime minister and finance minister are all set on negotiating with European Central Bank in a bid to “avoid greater concentration of power in Spanish hands”.
The (protracted) sale of Novo Banco is “essential in the process”, says the paper, and “there are still bankers who think it should be nationalised” to save it from over exposure to Spain.
All this is coming “on the eve of stress tests” on Europe’s 51 major banks and in the wake of an ECB report which highlights Portugal’s “vulnerability” to external shocks.
Not one to miss an opportunity to put the boot in, Catarina Martins has gone as far as to say that Portugal is “at risk of not having a financial system” at all.
“We handed over €3 billion to Santander through Banif, and before that we had delivered many more millions to BIC as a result of BPN. We are always doing this. Thus, we need to look very closely at what is happening in the financial system in Portugal”.
It is a problem that is “urgent and serious and something that everyone is starting to recognise”, she added.
