The Portuguese Government, led by socialist Prime Minister, António Costa, has appointed the former Eurogroup President and Portuguese Finance Minister, Mário Centeno, as Governor of Portugal’s Central Bank. Never have the revolving doors of finance spun so fast, writes João Cotrim de Figueiredo.
João Cotrim de Figueiredo is a member of the Portuguese Parliament and President of Iniciativa Liberal.
Until just days ago Mr Centeno was President of the Eurogroup. Now, because of his new position as governor of the Central Bank, he will become a full member of the European Central Bank Board of Directors. Public confidence in Portugal’s leadership has been undermined.
For us, Iniciativa Liberal – the Portuguese Liberals (ALDE Party and Renew Europe) – confirmation of this sudden appointment doesn’t come as a surprise. Relations between the Portuguese Premier and his former Finance Minister Mr Centeno have been visibly eroding since earlier this year.
The Portuguese press expected a golden handshake between these two key political figures. The media tipped Centeno to get a swift and direct appointment as Governor of the Portuguese Central Bank, thus removing from the political playing field a popular minister and potential rival to Costa.
All Portuguese opposition parties took the floor in parliament to profess disagreement to this direct appointment, but only Iniciativa Liberal has taken a firm stance by asking the Portuguese Supreme Administrative Court for an injunction.
In the court submission, we claimed Mr Centeno’s appointment to be illegal in light the Portuguese Central Bank’s organic law, representing a clear conflict of interest – “It is not about the competence and professional experience of Mr Centeno, it is about idoneity – in other words, independence, exemption and impartiality”.
The Supreme Administrative Court deemed the appointment to be a political act and denied having the competence to decide on the precautionary measure claim. This is disputed by many law experts in Portugal who consider the appointment an administrative act, not a political one.
The European side of this story takes us back to a recurrent and toxic ethical problem – the absence of a mandatory cooling-off period for European public officials. The notoriety of Europe’s revolving doors is a scandal diminishing public confidence with every headline.
Now, once again, commentators question the absence of transparency in the ongoing procedure, pointing to a high-handed failure to deploy the necessary checks and balances.
European parliamentarians must ask if it is acceptable that just days after leaving the helm of the Eurogroup and the Finance Ministry in Lisbon, Mr Centeno takes a seat on the ECB Board of Directors, anointed by virtue of his new position as Governor of the Portuguese Central Bank.
Even allowing that the Eurogroup is a mere ‘club’ without a formal framing, its political impact is considerable, including the ability to stabilize or destabilize the financial markets. Public confidence in our financial system must be enhanced, not weakened.
Perhaps Mr Centeno will fulfil his new role without favour, resisting the temptation to abscond his conflicts of interest. But what of the next appointment, or the one after that?
Europe must do better, and Europe’s parliamentarians should speak in opposition to Mr Centeno’s appointment, raising the standards of public office. We should not turn a blind eye to these revolving doors.