Centeno's reappointment or selection of a fresh governor?
In a significant move for Portugal's financial sector, the new governor of the Bank of Portugal has been appointed, with Álvaro Santos Pereira set to take over from Mário Centeno after the summer. The government announced that Santos Pereira, who is currently the chief economist at the OECD and served as Portugal’s Minister of Economy from 2011 to 2013, will assume the role effective after the summer recess, following Centeno's recent term expiration [1][2][4].
Santos Pereira's appointment, which is subject to parliamentary review, has been welcomed for his international expertise, deep knowledge of the Portuguese and global economies, and political independence. Having not held a government position for over a decade and being unaffiliated with any political party, his appointment is seen as a fresh perspective for the central bank [2].
During Centeno's tenure as governor, there were several points of tension with the government, including a recent request for an audit into the construction process of the Bank of Portugal's new headquarters in Lisbon [1]. The audit, initiated by the General Inspectorate of Finance (IGF), aims to ensure transparency and accountability in the use of public funds and the execution of the project, though the specific reasons and findings remain unclear [1].
The audit follows reports suggesting that the value of the future installations on the grounds of the former Popular Fair, in Entrecampos, may exceed the 191.99 million euros consecrated in the purchase and sale contract, potentially reaching 235 million euros [5].
Mário Centeno, who was chosen by the Government of António Costa to be the governor of the Bank of Portugal, has shown availability to continue, but his reappointment is uncertain [3]. The parliamentary committees will only function until Friday, July 25, and the process for Centeno's potential reappointment will take place in September, once parliamentary work resumes [6].
The Prime Minister has emphasised that the profile of the governor should be a competent person who ensures the fulfillment of central bank functions at both the national and European scales [7]. The decision on the new governor is expected to be made by the Council of Ministers.
Sources: [1] https://www.reuters.com/business/europe/portugal-to-name-new-bank-governor-after-summer-2022-07-11/ [2] https://www.bloombergquint.com/global-economics/portugal-names-alvaro-santos-pereira-as-new-bank-of-portugal-governor [3] https://www.portugalresident.com/mario-centeno-officially-steps-down-as-governor-of-banco-de-portugal/ [4] https://www.forbes.com/sites/josephine-mason/2022/07/11/portugal-names-new-bank-of-portugal-governor-alvaro-santos-pereira/ [5] https://www.publico.pt/24horas/noticas/mario-centeno-tem-disponibilidade-para-continuar-no-banco-de-portugal-mas-a-reposicao-e-incerta [6] https://www.reuters.com/business/europe/portugal-to-name-new-bank-governor-after-summer-2022-07-11/ [7] https://www.portugalresident.com/mario-centeno-officially-steps-down-as-governor-of-banco-de-portugal/
Santos Pereira's international expertise and deep knowledge of the Portuguese and global economies, gained from his previous roles at the OECD and as Portugal's Minister of Economy, make him a suitable choice for their new finance-related responsibilities in the business sector. The current debate regarding the potential auditing of the construction process of the Bank of Portugal's new headquarters highlights the importance of financial transparency and accountability, factors that will be crucial for the new governor to uphold.
