Portugal’s Socialist party today was accused by the government of acting in "bad faith" over comments it had made about the impact on the national accounts of not selling off Novo Banco before the year end.
The Minister of the Presidency and Parliamentary Affairs, Marques Guedes, says there is no imperative for the bank to be sold at any price and that the money injected into Novo Banco, if not repaid this year, “will have no impact on the achievement of targets by Portugal.”
The government is annoyed at the socialists for making political capital from the recently aborted Novo Banco sale negotiations between the Bank of Portugal and China’s Anbang Insurance.
Guedes concurred that Novo Banco owed €4.5 billion and the state is owed €3.9 billion, but that the state lent to the BES resolution fund and that it has yet to be decided by Europe for deficit purposes as to whether this figure will show up on Portugal's annual accounts.
Marques Guedes tried to turn the tables on the socialists by saying they must have a guilty conscience regarding their handling of the BPN bank bailout which did have an impact of several billion euros on the national accounts.
According to Guedes, the socialist party is "trying to take advantage of the pre-electoral climate" and trying to "create some doubt in people’s minds that this (Novo Banco loan) will impact on the Portuguese taxpayer."
Marques Guedes said that the state "did not nationalise or directly own shares in Novo Banco" but that there is a loan that is to be repaid with interest accruing.
On the ongoing negotiation between the Bank of Portugal and the remaining companies interested in buying Novo Banco (Fosun and Apollo), the minister said that the Bank of Portugal has in mind the interests of the financial system as a whole and of Novo Banco in particular, "unlike some who suggest that there is pressure that the bank is sold off at any price."
Whatever the urbane Guedes assured after today’s council of ministers meeting, the Bank of Portugal is under intense pressure to sell off Novo Banco this year but is hampered by the low offers on the table.
The Bank of Portugal currently is in 15 days of talks with Fosun, after which there remains only the US venture capital company Apollo whose track record in buying distressed assets has made its shareholders rich but this will not be an easy deal to explain to the public should the BoP’s governor Carlos Costa be pressured into selling to the Americans before the financial year end.
Comments
http://economico.sapo.pt/noticias/riscos-impossiveis-de-quantificarameacam-venda-do-novo-banco_227897.html
Particularly difficult for these Portuguese grandees to get their heads round is that so many of the contracts were sold on the understanding UK law would apply. Not Portuguese. That is what reassured so many and would have been part of the sales pitch.
As the salesman would have said to clinch the deal "Look, as I have said repeatedly this is an international investment product being marketed worldwide. Firms like Goldman Sachs are already on board and they do not buy turkeys - except at Thanksgiving. And if there are any problems whatsoever your claim will go through the UK courts - not ours. You have no risk !!"
So the lesados will be making their claims and getting judgements without any 'interference', as would be intended to happen here. Judged solely on the merits of the case. Quite a wake up call.