Álvaro Santos Pereira, a former Minister of the Economy under the government of Pedro Passos Coelho (PSD/CDS-PP), has been appointed governor of the Bank of Portugal (BdP) by Luis Montenegro’s administration to commence his duties today, October 6.
The appointment was formalized during the Cabinet meeting at the end of last week, following the receipt of an opinion from the Assembly of the Republic’s Budget, Finance and Administrative Modernization Committee (COFAP) on September 25 regarding the choice of the economist.
In a press conference after the meeting, António Leitão Amaro, Minister of the Presidency, confirmed the appointment of the designated governor, stating that Santos Pereira “will take office at the beginning of the coming week” – meaning this week.
How was this decision reached?
Álvaro Santos Pereira, who served as the chief economist for the Organisation for Economic Co-operation and Development (OECD) when the government announced his nomination on July 24 of this year, will succeed Mário Centeno, who has been governor since July 2020 and formerly served as Finance Minister in two governments led by António Costa (PS).
The public presentation of the new governor is set for this morning at the Money Museum in Lisbon, where Minister of State and Finance Joaquim Miranda Sarmento will be present.
Prior to the Cabinet’s press conference, the Ministry of Finance issued a press release stating that Miranda Sarmento will speak at the ceremony at 10 a.m.
How is the governor of the BdP chosen?
According to the Organic Law of the Bank of Portugal, the governor is appointed via a Cabinet resolution based on the proposal of the government member responsible for financial matters (in this case, Minister Joaquim Miranda Sarmento), after receiving a substantiated opinion from the competent committee of the Assembly of the Republic, which is issued following a parliamentary hearing.
The parliamentary opinion was supported by parliamentary groups from PSD, CDS-PP, Chega, and IL. The PS abstained after its proposal to include a reference about the political freedom of BdP employees was rejected by PSD, CDS-PP, Chega, and IL. The proposal aimed to clarify that the governor cannot restrict “rights, freedoms, and guarantees.”
The issue arose from statements made by Álvaro Santos Pereira during his parliamentary hearing at COFAP on September 17, where he emphasized that central bank employees should not engage in active politics to preserve the institution’s independence.
“I will not ask anyone at the Bank of Portugal to provide a political affiliation. However, I believe that those working at the Bank of Portugal should not be involved in active politics, okay? Therefore, if someone at the Bank of Portugal decides they want to participate, or decide they want to work actively with parties, I think that’s an issue to be addressed,” he stated during the hearing, with these remarks recorded in the final report.
Mário Centeno, an economist at the BdP, confirmed that he would remain at the institution, as he stated during last week’s parliamentary hearing on September 25.
“Of course, I will stay at the Bank of Portugal. I have been at the Bank of Portugal for 35 years,” he affirmed, hoping for respect for his 35-year career at the bank.
The clarification came in response to probing questions from PSD and CDS-PP deputies, seeking to understand his future plans following his term as governor, particularly in light of Santos Pereira’s comments to the same committee, where he mentioned he “would never remain at the bank after serving as governor.”
