Lisbon, July 24, 2025 (Lusa) - Mário Centeno is leaving the Bank of Portugal (BdP) after a five-year term marked, particularly in recent months, by some disagreements with the governments led by Luís Montenegro.
In April last year, when he had just taken office, Finance Minister Joaquim Miranda Sarmento set the tone for the relationship with the governor by expressing surprise at the news that the central bank had made losses in 2023. This was although the governor had been signalling for some time that the central bank, like the other central banks in Europe, would no longer have positive results due to the tightening of monetary policy.
In addition, Centeno stated that the accounts had been delivered to the shareholder on time, allowing the minister to access the figures in advance.
The beginning of the relationship ended up being a history of tensions, with the differences between Centeno and Miranda Sarmento including, for example, a discussion about the outflow of young “brains” to other countries.
Centeno defended Portugal's ability to retain recent graduates. At the same time, the finance minister reiterated that Portugal has a "problem retaining and attracting qualified young people", which is one of the justifications for bringing forward measures aimed at young people, such as the IRS Jovem.
One of these measures has also prompted some warnings: the public guarantee for first home loans for young people between the ages of 18 and 35, with the governor saying several times in public that even with the guarantee, the banks cannot relax their compliance with the rules for granting loans.
Other government measures have also been analysed by the central bank, such as the lowering of the corporate tax rate.
The BdP published a study at the end of 2024, which concluded that lowering company tax would only benefit the economy if companies reinvest the tax savings, and that reducing this tax was one of the AD's election pledges.
Centeno came to the defence of the study drawn up by BdP experts, which concluded that a one percentage point reduction in company tax would hurt the economy if companies didn't reinvest the savings, arguing that "that text is perhaps the most serious text" he has seen "on company tax in recent years", and that "there is nothing in it that is not imbued with the BdP's role of advising".
There was also a controversy when the prime minister decided to appoint Hélder Rosalino, who at the time was an advisor to the BoP, as secretary-general of the government, with Centeno saying that he would not pay the salary of the former BoP administrator in this new position, which he ended up not taking up.
This case prompted the finance minister to convene the BoP's remuneration committee, which had not met for almost 10 years.
The management of public accounts and projections for the future was yet another point of tension between the governor, who, while he was finance minister, was responsible for the first budget surplus in democracy, and Luís Montenegro's government.
Centeno had already warned about the evolution of public spending, and more recently, the BoP's forecasts were the first to project a deficit in 2025, while the government predicted a surplus of 0.3% of Gross Domestic Product (GDP).
The prime minister reacted to the figures by pointing out that the BdP was "going against the grain" in its forecasts, since the other institutions were not estimating a negative balance.
Centeno's reappointment itself was an issue, as the governor stated in interviews that he was available to continue; however, the government never confirmed his intentions. It eventually announced today that it had chosen economist Álvaro Santos Pereira as the new governor.
This week, after the end of Mário Centeno's mandate (which ended on Sunday), the government announced that it would request an audit from the General Inspection of Finance (IGF) into the construction process of the Bank of Portugal's new building.
At issue is the contract thatthe central bank, led by Centeno, signed in May with Fidelidade to buy a building on the grounds of the former Feira Popular, in Entrecampos, Lisbon, for the institution's future facilities, for €191.99 million, with the final transaction scheduled for the end of 2027.
Observador reported on Monday, 21 July, that the value of the future facilities will be more than €192 million, as the figure refers only to the structural works, with the online newspaper estimating that the total cost could rise to €235 million.
The newspaper also reported warnings from Bank of Portugal consultants about licensing and the possible need for an environmental impact assessment for the construction of the car park.
The information led the institution to respond to questions from Lusa, saying that it complies with all the rules in the process of buying the building.
MES/ADB // ADB.
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