The “contingency” (negative risk) that Novo Banco (NB) still represents for public accounts and the “secret” regarding possible new aid for TAP under an “unknown” restructuring plan are risk factors that will affect public accounts in 2023. can shake, warns the Technical Budget Support Unit (UTAO), a team of specialists who advise Parliament on public finances. .
According to the UTAO study “Preliminary Consideration of the State Budget Proposal for 2023 (POE2023),” released Thursday, the new proposal for OE2023 “does not clarify a significant downside risk to the public sector (AP) budget balance): the new Bank”.
“Although the Contingent Capitalization Agreement gives Novo Banco the right to still request an injection of up to EUR 485 million from the Resolution Fund, the relevant accounting statements do not include a transfer in 2023 to that institution, nor is there any reference to this unforeseen circumstance in the Fiscal Risks section of the Ministry of Finance (MF) report accompanying the POE/2023,” says
It should be remembered that Novo Banco already entails huge costs and risks for taxpayers because of the loans that the state had to provide to the resolution fund, which did not have enough money there to help NB.
However, this model was changed and the state stopped funding new aid to NB, with commercial banks now fully fulfilling this role. One is public, CGD.
However, even in this model where the state is not responsible for any financial allocation to Novo Banco, any amount that enters the resolution fund circuit (which then transfers the money to NB) is guaranteed to be classified as an expense or Public debt.
For example, the aforementioned EUR 485 million, even from other banks (and not from the State), must be deposited in the accounts of the Resolution Fund, they will soon legally come within the perimeter of the public accounts and can therefore be a deficit or debt in the national accounts.
Now, of course, this could directly affect the path to the government deficit equal to 0.9% of gross domestic product (GDP) next year, which is in the new OE of Fernando Medina and the rest of the government.
UTAO reinforces Medina’s criticism of these omissions. “Since this is a huge downside risk to the fiscal balance, it is strange that no explanation is given for the lack of a ‘provision’ in these cards in the POE documentation, namely in the section on fiscal risks.”
Everything in the dark on TAP
In addition, UTAO fears that the Portuguese airline, which has been nationalized, will cost more. In this case, the entity coordinated by Rui Baleiras even speaks of “secretism”, “omissions” and “opacity”. In other words, TAP could also significantly complicate the achievement of the deficit and debt targets pursued in 2023 by Medina and António Costa, the Prime Minister.
“The TAP group is also a downside risk factor and secrecy takes precedence over potential burdens on taxpayers in 2023,” the Cell says.
“On the one hand, the economic context that has already unfolded in 2022 and the outlook for 2023 justify concerns about the deterioration of the group’s economic and financial situation.”
“On the other hand, the restructuring plan remains unknown to the public and in the decision of the European Commission on the state aid that the Portuguese state will grant to the company, published in the Official Gazette on May 18, 2022, monetary values have been omitted.”
Thus, the lack of transparency about the AP’s commitments raises suspicions about the role TAP will play in the 2023 public accounts.
UTAO recalls that POE/2023 “confirms the granting of financial support in 2022 through a capital injection of EUR 990 million in TAP SA, with an impact of EUR 600 million in national accounts”.
As for 2023, “the budget document does not provide financial support to this entity, but the economic restructuring plan approved by the European Commission remains unknown”.
“The increase in jet fuel, the economic downturn and even recessions in many markets to which the company flies will not fail its economic and financial performance in 2023” and “it is not known whether there are any contingencies in that plan that could come to justify more taxpayer money for the airline”.
“Therefore, the TAP poses a downside risk to the one-off forecasts of the fiscal balance and government debt in 2023,” Parliament’s advisers concluded.
By May, the UTAO had already revolted against this total “secret” regarding TAP’s accounts and financial recovery plan.
At the time, he said that “the same secrecy that has come with making substantial public commitments regarding the Novo Banco group is being repeated with the TAP group. There is a wider public discussion, inside and outside the political sphere”.
Luís Reis Ribeiro is a journalist for Dinheiro Vivo
Source: DN
