There is light at the end of the tunnel, even more, it is not clear that there comes. There are several issues to be clarified in the solution to the grievances of Banco Espírito Santo (BES), which was presented Monday by the Government. The prime minister has ensured that there will be no costs to the taxpayers but the partial document [without attachments], is far from ensuring such a guarantee. For now, here are some answers, which are shown in the solution presented. And some of the questions with little response.
1 – How much receive each injured person?
- applications up to half a million may receive 75%. The maximum is 250 thousand euros.
- applications in excess of half a million only recover half of it.
that is, from the outset, users of the old BES, BEST – Bank Electronic Service, Total and Banco Espírito Santo dos Açores, assume losses of at least 25%, of your initial investment.
2 – When you receive?
The price will be paid in three instalments: (i) the first to be held in may 2017 [verifying that the membership fee minimum will be solution has been achieved] after the conclusion of the contract of adhesion, corresponding to 30% of the nominal value of the capital invested, (ii) the second and third corresponding to the remaining value of the price indicated, to be paid in two equal parts, the one in 2018 and another in 2019.
In exchange, the injured advance the commercial paper and the credit claimed from the Fund that will be established. The Fund will have as a mission to claim the credits in the liquidation of the Espírito Santo International (ESI) and Rioforte but also take legal proceedings in pursuit of compensation amongst members of the governing bodies of the BES and of their societies. It will be also for the Fund transferring the credits to be achieved in the settlement of the BES "bad" – that resulted from the Resolution of August 2014.
3 – is There anything else that can be recovered?
Is in study the possibility of tax deduction of losses up to the amount of capital invested. Still don’t know what kind of deductions will be promoted or if there is a maximum ceiling.
in Addition to the tax deductions, you may be a business proposition of the bank to the aggrieved, with more advantageous conditions for the application of the amounts reimbursed.
in Addition, the possibility of the amounts suggested in the solution may increase if the Fund is able to recover something on their claims and the like.
4 – The solution is ready to move forward?
The implementation of this solution is dependent of the Investors are Not Qualified Holders of Commercial Paper of Espírito Santo Group (INQPC) adherents represent more than 50% of the applications that represent more than 50% of the capital invested. That is, a lot of people have to adhere to in order to support the solution.
And passes by the following steps:
a. the Constitution of the Fund;
b. the Mounting of the Financing of the Fund with State guarantee;
c. the Subscription of the Contracts of Adhesion: in the period that is set for the effect, and it is estimated that 30 days will be sufficient;
d. Verify if the compliance rate minimum has been reached;
e. Verified the condition, the adhesion contracts begin to produce all their effects with the consequent transmission of the assigned credits and the payment of the price according to the benefits listed above.
5 – Who will pay the bill?
Despite the fact that the prime minister ensure that there are no costs to the taxpayers is not clear how they get the such 286 million that the Fund needs. With the existence of a State guarantee, with a “possible” counter-guarantee of the Resolution Fund, if everything goes wrong, who pays is the State. That is, all of us.
6 – Before it goes wrong who is the guarantor of what?
The solution is the creation of a Fund that pays out to injured parties. The financing contracted by the Fund – which does not yet exist and has nothing inside – next to the banker you will have the guarantee of the State (followed, eventually and in accordance with the study, for a future coverage of the Resolution Fund, in terms that are compatible with the other commitments related to it).
The document, already published on the website of INQPC refers to the “the impact on the public accounts of this solution was the subject of a study by the Catholic University copy of which is set out in Annex II to this document and that has been obtained to serve the purpose of taking care that the solution does not involve final burden to the taxpayer”. But until now no one knows the attachments in question.
7 – What is the total value of the Fund?
For the purpose of paying the price, the Fund will have to finance with the dealer. The amount of funding will depend on the rate of adhesion of the INQPC to the solution. On the assumption that all INQPC adhere to the solution, the estimated amount of the financing amounts to approximately eur 286 million.
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