PremiumNovo Banco: Left Bloc considers “opaque” agreement with Brussels

BE has already requested documents on the clause in which the State has accepted to be responsible for everything that goes wrong associated with Novo Banco.

The possibility of using this security or capital cushion of last resort (referred to as capital backstop) is provided for in the agreement with the European Commission that gave the green light to the sale of the institution to the Lone Star fund, in the event of an adverse scenario. BE wants to know the conditions of this mechanism and what the losses foreseen in the Novo Banco contract will be.

To approve the sale of Novo Banco to the US investment fund Lone Star in 2017, Brussels demanded that the Portuguese State guarantee its viability, opening the door to direct public intervention. A mechanism that is not in the sale agreement, but that is available to the State to protect the bank in an extreme scenario, which could lead to a direct capital injection of taxpayers in Novo Banco, which adds to the expected 3,89 billion euros. by the Resolution Fund (FdR). Left Bloc questioned the Government about this mechanism that could lead to more injections. Blocker deputy, Mariana Mortágua, considers the backstop clause to be “opaque” and fears other costs of Novo Banco besides the guarantee.

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