Bank rescues 'not good' but averted economic 'collapse'

By TPN/Lusa, in News · 30-12-2019 12:00:00 · 1 Comments

Portugal’s president, Marcelo Rebelo de Sousa, said that the €18 billion cost to the state of propping up the financial system over the last decade "was not a good solution" but that it avoided the economy’s "collapse”.

Speaking to journalists on the sidelines of a visit to a Christmas party at the Vida e Paz charity in Lisbon, began by pointing out that the country "experienced a very serious crisis and that, at the scale of Portugal, it was a crisis that had dramatic consequences for many companies."

According to de Sousa, the consequences could have been "even more dramatic, because there were times when several financial institutions suffered this crisis, putting at risk commitments made if some measures had not been taken, including capital injections made using other banks and also to the state.

"We would be talking about hundreds of thousands, not to say millions of Portuguese" being plunged into poverty, he explained.

In this way, he argued, the rescue of the banks "was not a good solution" but stressed that "if at some point there had even been a stop and a collapse in the financial system that would be the collapse of the nation’s economy."

Everyone, he said, “would have preferred that this situation …[which] corresponds to almost a decade, had not happened, but what matters now is to look to the future, learn the lessons and know that it prevention is better than cure."

At the time, for Portugal "when it was not possible to prevent [it] … then the alternative was for the whole economy to be paralysed," he said, arguing that this meant it was necessary "to inject very large financial resources".

Still, he confessed, “it's tempting to say 'why didn't it go to housing, why didn't it go to health, why didn't it go to social security, why is it did not go to the homeless?'".

Portugal’s Court of Auditors estimates that the cost to the state of supporting the financial system between 2008 and 2018 amounted to €18.292 billion, according to a written opinion on the state accounts released on Friday.


Comments:

Keeping the greedy fat cats afloat is backward and capitolism is in decline, poverty to them is relinquishing luxury nationals will never know.

By John from Porto on 01-01-2020 09:28
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