At the end of 2020, parliament banned the finance minister, but millions showed up.
At the end of 2020, the state budget for 2021 (OE2021) was delayed due to Novo Banco (NB). The parliamentary majority (BE, PSD, PCP and PAN) have blocked the intention of the government and the finance minister to reserve appropriations for spending in OE in order to be able to inject more money into NB.
But then the minister immediately warned: the state is a “good man” and will fulfill the agreement he signed. And so it was. Despite the failure of parliament in June, NB received the first part of the aid (317 million), and last week the remainder, which raised doubts, another 112 million. A total of 429 million previously agreed.
The money was raised through a bank syndicate, but it was later redirected to the Dispute Resolution Fund (the government agency that is responsible for the costs), which then donated millions to NB.
But how can parliament stop the transfer of the NB, when politicians shout “not a penny more,” and the money still leaves?
The Budget Technical Support Team (UTAO), coordinated by Rui Nuno Baleiras, explains an “alternative” accounting scheme found to bypass the parliamentary blockade.
In 2021, NB’s start-up costs were “€ 317 million, with funding received entirely from financial companies”. “This payment was then recorded as a capital transfer (actual expenditure) and not as stipulated in the JI 2021 proposal (expenditure on financial assets of financial companies).” The OE Law of 2021 “did not provide for budgetary allocations for the National Bank in the form of assets or capital transfers.”
However, “to complete the capitalization, the expenditures were recorded as a capital transfer, while the total Fund allocation in actual expenditures was increased by the amount necessary to cover them, through budgetary changes within the competence of the government (offsetting the increase in this ceiling, which reduces the similar indicator for other companies, participating in the same financial program) “, – explains the UTAO. “Thus, the government has found an alternative accounting process to the one that was rejected by parliament for the public capitalization of the bank,” which by 2020 has already cost Portuguese taxpayers 7.9 billion euros.
