Two years with resolution measures in the banks two years with higher deficits because of accounting for extraordinary measures. After the BES / New Bank in the summer of 2014, the resolution of Banif in late 2015 has brought an additional impact on public accounts whose size was clarified on Thursday. The deficit, released by the National Statistics Institute (INE) but only next week will be sent to the European authorities, is 4.4% of gross domestic product (GDP), it shall, 1.4 percentage points to public intervention in the Banif. Without this impact, the deficit would thus be 3%.
Although the starting point for the deficit correction this year cashes Banif, the official value account for notification the deficit with the European Commission are 4.4%. A cost that led the own finance minister, Mário Centeno, to take for granted that Portugal will continue this year within the excessive deficit procedure (when the deficit from a European country is above 3% of GDP).
this year, the Government’s commitment is to lower the deficit to 2.2% of GDP, which means that the underlying adjustment effort is 0.8 percentage points of GDP for the 3% that are the “line departure “, excluding the extraordinary impact of Banif. The same happened in 2014. The capitalization of the New Bank did not tell the reduction of the nominal deficit next year of effort, but eventually led the deficit 7.2%.
it was known that the capital injection in the bank in December would worsen the deficit in 2255 million, but on Thursday it became clear that global impact of the intervention in Banif is higher, because they are recorded the assets that were left out of the sale of the institution Santander Totta and that carried over to the “vehicle” which is now managing these troubled assets in the public sphere, the Octant.
in addition to those 2255 million of the capital injection (1766 million assumed directly by the State and 489 million by the Resolution Fund, the same which owns the New Bank), they are recognized in last year’s deficit more 208.2 million euros. At issue are 179.2 million euros related to the purchase of real estate assets that were transferred to the Octant and 29 million of the capital injection of Banif -. Investment Bank
The cost of Banif in the accounts is, thus of 2.4632 billion euros, equivalent to 1.4% of GDP. Even without this impact would be not met the target of 2.7% drawn by the previous government. The size of the Banif turned out to be higher than expected. Incidentally, the Technical Unit of Budget Support (UTAO) had estimated a cost equivalent to 1.2 percentage points of GDP.
The impasse
in a note published on Thursday, the INE said that the vehicle that manages assets “bad” is ranked at the perimeter of government “in accordance with the rules set out in the Manual on government Deficit and Debt.”
the Banif impact on the deficit is closed, but not yet in debt figures. The deficit figure was released this morning, but sending to Procedure note from the European Commission the excessive deficit (EDP), which shall include the estimates of the deficit and public debt, was postponed by the INE, which delayed the publication for next week by “not be available all the necessary information.”
the statistical institutes of the European Union must send this notice to Eurostat by 31 March, but the INE had to do it yesterday, what It did not happen because of a dispute with the Bank of Portugal regarding the accounting for debt figures. The impasse, knows PUBLIC relates to some of the values related to the Banif and, given that the last word in the procedure validation Excessive Deficit falls to Eurostat, the Portuguese authorities have appealed to this body, which will then final decision.
Once you know that the note will only be sent on the last day of the month, the government came away responsibilities in this delay, ensuring that “sent to the INE, in time, all the information on the accounts the State needed to calculate the deficit and public debt. “
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