After pumping billions of euros into its largest troubled bank, Centeno said the recapitalization would not have an impact on the economy.
Centeno told CNBC the $4 billion spent propping up Caixa Geral de Depositos wasn’t considered state aid, under European competition rules, and as a result, it won’t affect this year’s public deficit.
“The capitalization of Caixa was based on a decision by the European commission of non-state aid. This means that the capitalization of Caixa was made under private investment principles and market conditions…it clearly defined how it has to be considered in terms of national accounts,” he said. “We expect no impact for that on the deficit,” Centeno stated.
Portugal is currently estimating a 1.5 percent gross domestic product for this year, but this figure doesn’t include the recapitalization of the bank.
The European Commission announced Monday that Portugal is no longer in breach of its budget rules, six years after concluding a bailout program.
Brussels said that the Portuguese economy has improved over the last few years,
