Committee of Inquiry Approves BES Resolution Was “Political Fraud”

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The inquiry committee to Novo Banco approved a proposal by the PCP to amend the report, referring that BES’s resolution and itsThe initial funding of €4.9 billion was “a political fraud”.

The PCP proposal that was approved this Monday — with favorable votes from PS, BE and PCP, and against votes from PSD, CDS, PAN and IL — refers that the resolution of BES and its initial capitalization of 4,900 million euros, was “a political fraud”, writes the Observer.

“A decision that represented a political fraud, as the Portuguese were told that it would be possible to solve the bank with 4.9 billion euros, knowing that the ‘holding’ liability was greater than 12 billion euros” , can be read in the proposed amendment of the PCP to the report.

This means that the communists’ argument is that the government of Pedro Passos Coelho knew the bank would need a lot more than the €4.9 billion it said would be needed.

According to the text, the decision of the resolution measure to BES and the creation of Novo Banco, on August 3, 2014, “was a decision that, due to its implications, also hold the government accountable“, at the time led by Pedro Passos Coelho (PSD/CDS-PP).

The proposed amendment also refers that the commitment to reprivatize Novo Banco quickly “represented a constraint on taking other options in the future, a negotiating advantage for potential buyers, and the beginning of a process that led to the situation in which the Portuguese they are called to pay for the cleaning of toxic assets, taking on the losses without enjoying the benefits of having a bank at the service of the country”.

However, a PSD proposal which uses a quote from the former deputy governor of Banco de Portugal (BdP) Pedro Duarte Neves in the inquiry commission saying that there were rules to “use as little public funds as necessary”.

“Therefore, it was on this basis that it converged to the 4.9 and not the 5.5 billion euros”, can be read in the quote included by the PSD, in a proposal approved with the favorable votes of PSD, BE, CDS- PP, PAN and IL, and against PS and PCP.

It was also unanimously approved a BE proposal on the public statements at the time of the resolution, either by the XIX Government (PSD-CDS/PP) or by the Governor of the Bank of Portugal (BdP), “which ensured that this decision would not impose any burden on taxpayers”.

“According to the Court of Auditors, these statements increased the opacity in communicating the impact of BES’ resolution on the sustainability of public finances”, can also be read in BE’s proposal.

The deputies also approved a proposal by the PSD that stresses that the former prime minister Pedro Passos Coelho “outright rejected” assistant the Espírito Santo Group (GES), at the time led by Ricardo Salgado.

In a proposal that the former leader of BES and GES met with Passos Coelho, the former president of the European Commission Durão Barroso, the former deputy prime minister Paulo Portas, the former finance minister Maria Luís Albuquerque and the former -Deputy Secretary of State to Prime Minister Carlos Moedas, it is said that the former head of government publicly claimed that “private non-financial companies should be treated like any other private company”.

The proposal was approved with votes in favor of PSD, BE, CDS-PP, PAN and IL, and against PS and PCP.