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Approximately two hours after the delivery of the State Budget for 2020 in Parliament, the Ministry of Finance even said that, after all, there is an error. And an immediate mistake in one of the hottest issues in the government’s negotiations with the other parties: money for Novo Banco.
“By mistake, the OE21 report, delivered today to the Assembly of the Republic, erroneously identifies a loan of € 468.6 M to the Resolution Fund,” indicates a statement from the Ministry of Finance sent by 23.40 to the newsrooms.
According to the note from João Leão’s office, “in 2021, and unlike the State Budgets approved in previous years, the State Budget does not foresee any loan for the Resolution Fund.”
This had been one of the perplexities of the document delivered to Parliament, since the Government has always guaranteed that there was no state funding for the Resolution Fund, and this indication was initially expressed.
Now, the Government has come to assure that the State Budget proposal does not foresee any state loan to the Resolution Fund. This amount had another recipient: “It is a loan of € 468.6 M to CP-Comboios de Portugal.”
A company whose name was not on the table where the funds for the Resolution Fund were, and the text of OE’s proposed report also does not mention any loans to the company.
In fact, the indication of the amount of 468.6 million euros followed the loan of 865 million euros from the State to the Resolution Fund, which took place this year.
“The Ministry of Finance will immediately correct the document,” the statement said.
Even before the effective correction in the documents delivered to Parliament, the Ministry of Finance sent to the editorial offices a table of the General Directorate of Finance and Finance system, which shows the long-term loan for the CP of 468.6 million euros, and zero for the Resolution Fund, to try to prove that the error appeared in the final document.
The State Budgets for 2020, which were approved earlier this year, provided that the Resolution Fund would place 600 million euros in Novo Banco. This was the amount to be injected into the bank through that vehicle that works with the Bank of Portugal, which appeared as a temporary measure that had a budgetary impact. However, in addition, there was also a spending authorization for the Resolution Fund, which could amount up to 850 million euros, the maximum amount that the State could lend to the Fund each year.
The Novo Banco issue is one of the issues that separates the Government from the Left Bloc, with the party coordinated by Catarina Martins that wants to prevent money from entering the bank without a prior audit by the Court of Accounts – an audit that in the meantime already It has received the agreement of the PS and PSD (although the scope is yet to be closed). But there is no deadline for such an audit to be carried out, so it is difficult for it to be done before May, when Novo Banco usually requests capitalization from the Resolution Fund.
The annual injection of money into Novo Banco through the Resolution Fund is due to the agreement reached in 2017 when the sale of 75% of its capital to Lone Star, which created the so-called contingent capital mechanism. Of the maximum amount of 3.89 billion that could be requested, 900 million remain.
The Government and the Resolution Fund have been pressing for the amount to be paid to Novo Banco in 2021 to be less than the maximum text that can be requested, as Expresso explained.
The perspective on the Government table is that the Resolution Fund will be able to cover the need for capitalization of Novo Banco (whose exact value will only be known at the end of the year) through a loan from the banks.
Banks will be available for this purpose, but they have already signaled that they want changes in the way the Resolution Fund is financed, which has the burden of repaying all loans obtained by the Fund through 2046 and costs them millions each year.
