This position is contained in António Costa’s responses to the 12 questions addressed to him by the PSD on 23 November last in order to clarify statements made by the former governor of Banco de Portugal Carlos Costa, according to which there was a deliberate action on the part of the Government to precipitate the Banif resolution.

In the document sent today to the Assembly of the Republic, António Costa answers the questions of the Social Democrats together – and not one by one – and attached 12 documents, including a communiqué from the Bank of Portugal, dated 20 December 2015, on the sale of Banif.

“Given the failure of the voluntary sale process, Banco de Portugal, as the Resolution Authority, concluded that the sale in the context of resolution was the only alternative to liquidation. The sale process in the context of resolution was thus conducted by Banco de Portugal”, maintains the leader of the executive, before referring specifically to that statement from the institution then led by Carlos Costa when the sale in resolution to Santander Totta was announced.

“The Bank of Portugal considers that, given the circumstances and restrictions imposed, the sale of Banif’s activity is the solution that safeguards the stability of the national financial system and that protects the savings of families and companies, as well as financing the economy” , stresses António Costa, citing the statement from the national central bank of December 20, 2020.

The PSD asked the Prime Minister if he confirms that, on the morning of December 14, 2015, he sent a written communication to the President of the European Commission and the President of the European Central Bank in which he stated that Banco Banif was in the process of being resolved and/or in ‘pre-resolution phase’.

The prime minister corrects the date of December 14th indicated by the PSD and assumes that he “directed a letter to the president of the European Commission and to the president of the European Central Bank (ECB)” – a letter that left his office for the office of the minister of Foreign Affairs on December 15 to be forwarded by diplomatic bag.

António Costa then alludes to differences in this process between the then Minister of Finance, Maria Luís Albuquerque, and the Governor of the Bank of Portugal, Carlos Costa, in November 2015 – a situation that he says was verified shortly before the first socialist executive minority start functions.

“In the scenario of total divergence exposed to the European Commission between the XX Government [o último de Pedro Passos Coelho] and Banco de Portugal, which was in force in November 2015, the letter aimed to assure the European bodies of the Portuguese Government’s determination to promote the stability of the financial system, dealing with all the aforementioned situations and not persisting in behaviors of postponement or denial in the face of the need for action, of which Banif was the most regrettable example”, replies the current prime minister.

On this point regarding Banif, the leader of the executive now sends a letter attached to the parliament from the European Commissioner for Competition, Margrethe Vestager, addressed to Maria Luís Albuquerque on 12 December 2014, urging the Portuguese Government to present, at the latest, the end of March 2015 a credible restructuring plan for Banif.

António Costa also accompanied his responses with a document in which it was revealed that on 17 November 2015, while the Passos Coelho executive was still in force, the Bank of Portugal noted Banif’s “insufficient funds” and determined the presentation on time ten working days of credible measures to reinforce capital.

“The exchange of correspondence between the then governor of Banco de Portugal and Minister Maria Luís Albuquerque shows a total, paralyzing divergence between the path proposed by Banco de Portugal and that defended by the Government”, he stresses.

On the same November 17th, continues the current leader of the executive, citing documents, Carlos Costa writes to Maria Luís Albuquerque warning “of the urgent need to reinforce Banif’s own funds” and requesting a public recapitalization solution and emphasizing that may even have to propose a mandatory recapitalization measure”.

Two days later, on November 19, Maria Luís Albuquerque “expresses surprise at the change in the position of the governor, and defended by the European Commission, regarding the path to be given to the bank.

Therefore, according to the Prime Minister, when his Government took office it was “three days before the deadline that the Bank of Portugal had set for Banif to reinforce capital, the bank’s situation continued to deteriorate and there had been no understanding” between the Passos Coelho executive and the Bank of Portugal “about the way forward and the urgency increased”.

On January 1, 2016, “the new European rules for bank resolution came into force, which implied more onerous conditions for debt holders and, above all, for the depositors of the institutions”.

“Since taking office, in the few days available until the deadline for the ongoing sale process, the XXI Constitutional Government [o primeiro minoritário socialista] tested several solutions that reconciled the minimization of the potential cost for taxpayers with a reorganization of the financial system”, emphasizes António Costa, who also leaves one more note, denying Carlos Costa’s version in the recent book “O Governador”.

“In intense contacts with the European Commission, in which the Government and Banco de Portugal always participated, that institution made some of these solutions unfeasible. [de venda voluntária] in the context of assessing its compatibility with the State aid regime, namely not allowing the integration of Banif in Caixa Geral de Depósitos. (…) The voluntary sale process did not materialize within the required period, a sale that did not take place in the context of resolution having proved to be unfeasible”, concludes the current leader of the executive.

António Costa does not respond to the PSD’s question about “how do you explain that TVI reported, at 10:00 pm the night before the letter was sent [para Bruxelas]information that coincides with what was included in it as content and which was, presumably, only known to you and your Government”.


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