Portugal central bank chief Mário Centeno ethics review after being proposed as PM

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 Socialist premier António Costa, who quit last week over a corruption scandal.

Costa’s proposal has triggered a public spat between Centeno and Marcelo Rebelo de Sousa, the president who has the power to appoint prime ministers.

Costa, who resigned over allegations of corruption among public officials, had urged Rebelo de Sousa to appoint Centeno as his replacement rather than call new elections. But the president rejected the idea and called a general election for March 10.

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.

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 on Sunday. “I was very far from reaching a decision.”

But Rebelo de Sousa’s office on Monday put out a statement disputing Centeno’s account.

“The president of the republic denies that he invited anyone, including the governor of the Bank of Portugal, to head the government, before having heard the political parties with parliamentary representation and the Council of State [an advisory body],” the statement said.

After meeting those two groups, Rebelo de Sousa took the decision to dissolve parliament at the end of November. “He also denies having authorised anyone to contact anyone for this purpose, including the governor of the Bank of Portugal,” the president’s office said.

In response, Centeno clarified his position, saying in a statement that Costa had “invited me to reflect on the conditions that could allow” the bank governor to become premier. He said “the invitation for this reflection resulted from the conversations that the prime minister had with the president of the republic” but stressed that Rebelo de Sousa “did not invite me to head the government”.

Rebelo de Sousa, a former head of the opposition Social Democrats, became president in 2016, taking on a role whose occupants are required by the constitution to be politically neutral. There have been tensions between him and Costa in recent years over a variety of issues.

António Leitão Amaro, vice-president of the Social Democrats, said that in recent days Centeno had “demonstrated that he is an actor of the Socialist party”. He 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.

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 last week while denying any wrongdoing related to the corruption probe. His move came hours after a number of police raids and arrests in a corruption probe by public prosecutors, which included the detention of Costa’s chief of staff and the naming of 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


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