Tuesday, May 17, 2016

Hole 60 million in dividends promised the EU – Observer

The Bank of Portugal wants to give the state 186.3 million euros in dividends for the result of the central bank’s operations in 2015, the lowest since 2011 and over 60 million below the amount the Government told the Commission European who expected to receive, at the time of the negotiations on the budget when even got to increase the amount expected at 40 million, citing better results than expected.

it is also a proposal of the board of directors led by Carlos Costa, dating from the end of March, and already had a favorable opinion of the audit committee of the bank, but it can create a problem for the state accounts and for negotiations with the European Commission, in a week that envisions key in Brussels.

the central bank has proposed to the Finance Minister as representative of the largest shareholder of the central bank, the State receives 186.3 million euros, a total of EUR 233 million profit that Bank of Portugal failed last year (a decrease of 23.4% compared to last year). The Bank of Portugal cites the organic law yet to allocate 10% to the mandatory legal reserve and 10% to other reserves.

The problem is likely to be in the amount of dividends that were promised by the Government to the Commission European in early February. When the government made the latest concessions to reach an agreement with the European Commission to avoid the lead of the budget by the College, one of the additional revenue that promised were over 40 million euros compared to the expected dividends to the Bank of Portugal.

the government, which expected to receive EUR 200 million in dividends before the beginning of February, will have had indications that you have enough room to tell the European Commission that ultimately would get not 200 million, but EUR 240 million .

This promise is expressed in the letter sent by Mario Centeno on February 5 to commissioners Valdis Dombrovskis and Pierre Moscovici, which included the postponement of the reduction of the single social tax for employees with salaries up to 600 euros to allowed to reach the minimum effort required by European treaties that allowed the approval of the budget proposal, namely that prevented the Commission require a revised budget.

in this letter, Mario Centeno says he received updated data in preparation State Budget for 2016 the central bank to allow these expectations increase for these 240 million. The value, if confirmed, is below the first forecast at about 60 million euros.

In the evaluation that the European Commission makes the measures promised by the Government, the technicians to make more conservative estimates of savings and revenue that the government promised to reach – 155 million euros between accounts in Brussels and Lisbon. – but this was not one of the points that Brussels did not believe it was achieved

this is the worst result of the Bank of Portugal since at least 2011 and was EUR 71 million below the achieved last year.

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