An EC spokesman told Lusa News Agency on Wednesday that a deal had been reached with Portuguese authorities on Tuesday night about how to recapitalise CGD.
“Commissioner [Margrethe] Vestager reached an agreement last night with the Portuguese authorities about how to recapitalise the CGD in market conditions”, the spokesman said.
The EC representative said Portuguese authorities are to inject €2.7 billion into CGD, transfer its ParCaixa shares to the bank and convert €900 million in CoCo bonds into capital.
However Portugal’s Minister of Finance has said the injection into CGD will have implications on the levels of Public Debt.
Minister Mário Centeno said the injection of public capital into Caixa Geral de Depósitos will lead to the “redesigning of the profile and level of public debt.”
“Since this is a public investment, it is clear that it has to be funded,” the minister stressed during a press conference on the impact of the recapitalisation of CGD.
According to the Minister, “that this investment will boost both the performance of CGD and the stabilisation of the Portuguese financial system, has an unbeatable value.”
And, he reiterated: “It is clear that the financing of this investment will require a redesign of what is the profile and the level of Portuguese public debt, but the state and the economy will profit from this investment, which gives us a guarantee that all market participants will understand.”
Centeno added that “this agreement [reached with the European Commission] is very good news, not only for CGD, but for the entire Portuguese financial sector.”