Privitazing the Caixa Geral de Depositos - with the Private sector receiving more than 10% of interest rates

The Portuguese State Bank.

The latest development in the soap-opera of the Caixa 

is the recapitalization of the Bank:

Pedro Passos referred to the process 

of recapitalization of the public bank 

which entails a share of direct capital injection 

by the State shareholder 

to the amount of 2.5 billion euros 

and the emission of bonds (perpetual debt)

 to private institutions, 

with the global amount of 930 million euros. 

Now it is about this debt issue 

that Passos Coelho speaks about.

A debt issue is already in progress this March, 

with the placement of 500 million euros on the market, 

with the rest being issued within the next 18 months. 

It turns out that this placement of debt 

could be placed at a very high interest rate, 

which could be around 10%. 

It is to this remuneration 

that the leader of the PSD is referring, 

since this interest may be higher 

than the remuneration of the State 

(via dividends when CGD returns to profits).

In the argument of Passos Coelho, 

in view of this decision, 

agreed with the European institutions, 

"the mask of the illusion 

of this socialist-communist Government has fallen". 

"What they proclaim is not what they do," he accuses, 

and for that reason, 

"the results can only be utter disbelief 

and an increased lack of credibility," 

he said.

"There is something very wrong 

with this process of "privatizing of the Caixa," he said, 

"the private people (the capitalists) 

who are going to lend money to Caixa 

will receive a much higher profit 

than the money that the state will put there," 

"How do the socialist-communists government 

justify the fact 

that the Caixa is paying more to the capitalists 

than to the state 

that uses the taxpayers' money 

to capitalize the State Bank?" he asked, 

making it clear that the recapitalization of the CGD

 would be better deal for the private sector. than for the state.