Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Portugal’s central bank governor Mário Centeno is facing an ethics review by an independent watchdog after he was proposed as the next prime minister by outgoing Socialist premier António Costa, who quit last week over a corruption scandal.
Costa, who resigned hours after a number of arrests and police raids in a probe over alleged corruption among public officials, had urged Portugal’s president to appoint Centeno, a former finance minister, to replace him rather than call new elections.
The president, Marcelo Rebelo de Sousa, rejected the idea and announced on Thursday night that he would dissolve parliament at the end of November and call a general election for March 10.
However, Costa’s proposal has put the governor in the spotlight.
A central bank official confirmed that its ethics commission, comprised of three people from outside the bank, would meet on Monday to review recent events. It will consider questions including potential conflicts of interest.
The opposition Social Democrats said that, in recent days, Centeno had “demonstrated that he is an actor of the Socialist party”. António Leitão Amaro, the party’s vice-president, told the newspaper Público: “[Centeno] lost the legitimacy and the objectivity to be Bank of Portugal governor.”
Costa named Centeno as head of the central bank in 2020. He was previously finance minister in two minority governments led by Costa, who won a majority in an election in early 2022.
Speaking to the Financial Times, Centeno made his first public comments on the saga. “I had an invitation from the president and prime minister to reflect on and consider the possibility of leading the government,” he said. “I was very far from reaching a decision.”
Centeno is one of several dovish voices among the governors of southern European nations on the ECB’s 26-person governing council, which sets interest rates.
Costa announced his shock resignation on Tuesday while denying any wrongdoing related to the corruption probe. It has led to the arrest of his chief of staff and to prosecutors naming his infrastructure minister as a formal suspect.
Centeno has not been linked to any of the corruption allegations.
The prosecutors’ probe centres on several high-profile foreign investment projects: two lithium mines, a hydrogen production facility and a bank of large data centres. Prosecutors said they were investigating possible crimes of corruption, malfeasance and influence peddling among public officials.
Costa spoke again on Saturday evening because he said he saw “a dangerous idea building up that governments should not act to attract investment and simplify [procedures]”. He said governments had a duty to lure investment, “but always, always complying with the law”. He added: “To those who want to invest in Portugal, I say that your investment is welcomed.”
Prosecutors have said that, in the course of their investigations, some suspects alleged that the prime minister had intervened to “unblock procedures”. Costa has said he has a clear conscience.
Additional reporting by Martin Arnold in Frankfurt
Emily Foster is a globe-trotting journalist based in the UK. Her articles offer readers a global perspective on international events, exploring complex geopolitical issues and providing a nuanced view of the world’s most pressing challenges.
