A parliamentary session today fired questions at the teflon coated Finance Minister Maria Luís Albuquerque about the Government and the Bank of Portugal's solution for the bust Banco Espírito Santo.
The standing committee members questioned Albuquerque who set out to provide her version of events when describing the Bank of Portugal taking control of BES and separating it into a bad bank and a good bank, at a cost of €4.9 billion from the Resolution Fund.
The Socialist Party kicked off by accusing the government for its "use of public resources" in the formula to save BES, a solution that provided no guarantees for taxpayers.
Socialist deputy Alberto Martins required the Finance Minister to guarantee that "taxpayers will not pay for the mistakes of the banks."
"The Portuguese have a right to know what happened with BES, how we arrived at this situation," said Martins who mentioned in passing "the failure of the Portuguese supervisory authorities, the failure of the Troika authorities and the failure of the Government."
The Socialist lamented the fact that "to save the banks there is always money, but to solve poverty there is a handful of nothing."
Maria Luís Albuquerque was on her bamboozling best, explaining that, "even though the Resolution Fund is in the public accounts by a statistical quirk, the liability for the debts of the Resolution Fund rests with the financial system."
Albuquerque continued to cast her special bafflement spell as she clarified to unbelievers that the State has not got shares in Novo Banco, the shiny new bank that evolved from BES, so can not lose any money.
Apparently, this means the state is not required to pay any losses, "The state is not a shareholder of the Novo Banco. The state will not be required to pay any losses of Novo Banco."
The lefties were having none of this nonsense and said Albuquerque's performance was "confirmation of the failure of government policy."
The Communist Party's João Oliveira did his own share of lamenting, saying that the speech from the Minister of Finance at a session of the full National Assembly on June 17 gave a message that all was well, when in fact BES was close to going under, which it did just two weeks later.
The parliamentary leader of the Left Bloc, Luís Filipe Soares, wanted some guarantees for the protection of taxpayers' money, which he fears will again be last on the list should Novo Banco fail.
On fine form, Soares summmed up how many now are thinking, "The narrative of the Government does not accord with reality. The lady finance minister said on 17 July that BES was a solid bank without any problems and 15 days later the world changed, the stock fell, the bank was broken in two and needed €4.9 billion of which €4.4 billion is public money, 90% percent of the solution is taxpayers' money. "
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On the plus side, parents, children and grandchildren of the BES heirarchy have had their accounts frozen. More damaging than this, these accounts have been transfereed to the 'bad bank' with a very real prospect of losing any money on deposit.
