June 25, 2020 / 7:49 PM / 9 days ago

Portugal's government wants Centeno as central bank governor

FILE PHOTO: Portuguese Prime Minister Antonio Costa is accompanied by Finance Minister Mario Centeno, who will resign June 15, and his successor Joao Leao, as he arrives for a news conference at the Ajuda palace in Lisbon, Portugal, June 9, 2020. Jose Sena Goulao/Pool via REUTERS

LISBON (Reuters) - The Portuguese government will nominate Mario Centeno, who resigned from his role as finance minister this month, as the next central bank governor, the prime minister said on Thursday.

Prime Minister Antonio Costa said in a statement he had submitted a letter to the parliamentary speaker “expressing the government’s intention...to designate Mario Centeno for the position of governor of the Bank of Portugal”.

Centeno, who will also step down in July as head of the Eurogroup of euro zone finance ministers, still needs to be heard by a parliamentary committee before the government can officially nominate him.

His nomination as governor has been widely anticipated even though opposition parties voted this month for a bill that would, if it became law, force a wait of up to five years before he could become governor.

Centeno is credited with reversing longstanding austerity policies while also achieving Portugal’s first budget surplus in 45 years in 2019.

But restoring fiscal credibility came at the expense of public investment, which critics say left the country’s social and economic infrastructure in a fragile state despite financial indicators improving.

Last week Costa said Centeno was well-equipped to be the next governor, and had all the attributes needed to lead the bank.

The government’s intention to nominate Centeno was made by current Finance Minister Joao Leao, who was was due to appoint a successor to governor Carlos Costa, whose term ends next month, according a government statement.

Reporting by Catarina Demony and Sergio Goncalves, Editing by Angus MacSwan

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