MPs to quiz minister over bonds

The Portuguese Parliament’s Budget and Finance Committee has urgently called the secretary of State of Finances to account for the Government’s decision to end Series E Saving Bonds and introduce the new Series F the bonds which can be sold through bank branches.

The new certificates offer a lower rate of dividend. It is suspected that the Government was lobbied by the banks to lower the interest offered after thousands of depositors withdrew savings from the banks and put them in national savings bonds as they offered a higher rate of return at up to 3.5%. The banks were only offering 1%.
MP Mariana Mortágua (Bloco Esquerda) said it was important to discuss the moment the decision was taken (to end the higher yield bonds and introduce the lower yield bands) after suspected pressure from the banks, as well as the commission the banks will make from their distribution at branches.
Another MP, Rui Afonso of Chega stressed that the bonds were an “important savings instrument for the Portuguese, one that enabled them to be less dependent on the banks” … and therein lies the problem.
The suspension of the Series E and their replacement with Series F has been widely criticised by many MPs on both sides of the house who accuse the government of caving in to pressure from the banks or at the very least are favouring them.
The secretary of State for Finances, João Nuno Mendes has rejected the accusation and said that the government had not given in to the banks.
The PSD party also accuses the government of devaluing the savings bonds in order to do away with Portugal’s middle class and being “in the pocket of the banks”.
For weeks financial advisors on TV have been talking about the advantages of savers taking their savings out of deposit accounts at banks and putting them in government bonds.
The advice was taken with thousands taking their savings out of Portugal’s banks which offer some of the lowest interest rates on savings in Europe.
However, an official source at the Portuguese Banking Association APB said the banks “had no prior knowledge either about the government’s decision about the decision to terminate the E Series or the plan to allow banks to sell the new bonds” at their branches.
Each bank, it said, could decide to sell the bonds or not when the conditions were known. The President, Marcelo Rebelo de Sousa said on Monday that the change in the bonds’ conditions was an implicit call to the banks to offer better rates on savings deposits.