Government takes 5,4 billion euros debt in two months – Observer

In just two months, the finance minister, Mário Centeno, radically changed the accounts of public debt. In February, in the state budget for 2016 provided that the debt this year to stay at 127.7% of GDP. But now, in the stability program, the estimate has less 2.9 percentage points. There are about 5,400 million euros difference.

For 2016, it is projected that the public debt reached 124.8% of GDP, “reads the document, delivered Thursday in Parliament and will be sent to Brussels by the end of the month.

the revision of 2.9 percentage points is “explained by the repayment of debt with the results from the sale of financial assets held by general government, “explains the Ministry of Finance. Translated, it means that now Mario Centeno decided to include in the accounts a plug that expects to derive from the sale of assets that previously was not accounted for.

Among the financial assets held by public authorities which may They are sold, we highlight the New Bank and Octant – the company set up to receive part of Banif which was not sold to Santander. However, nothing guarantees that the new bank has a market value close to the price that the State, through the resolution fund, paid for it:. EUR 3,900 million

The CoCo’s repayment (a kind of loans that the state made to banks to strengthen the capital of banks) as well as a decrease in cash balances, are other possible ways to lower the total amount of debt.

the BCP and Caixa general deposits have yet to return a total of 1,650 million euros to the state: BCP is 750 million, and the box should EUR 900 million. . The term ends only next year, but the BCP had already expressed their intention to prepay

However, it is a fundamental question: what has changed in two months so that expectations regarding the sale of these assets is ? different now

in February, in a note to investors concerning the state budget for this year, the IGCP justified so the debt forecast that the Portuguese authorities were now working:

the debt projection considers a conservative scenario regarding the potential fittings from the sale of financial assets. “

I explained that a given” crucial “in the sense that became more robust forecasts, was the fact that the trajectory of public debt reduction” does not take favorable flows of the financial sector. ” That is, “the materialization of any potentially favorable flows (such as the sale of New Bank or reimbursement of CoCo’s) will have a favorable impact on the flow-debt adjustment, helping so to further reduce the stock of debt,” concretized IGCP.

Asked by the Observer, the Ministry of Finance has not given further details.

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