Portugal has agreed a deal with the European Commission which will help to recapitalise the ailing state owned bank CGD. The agreement would see over €5bn injected through a mix of state funds and money raised from the markets.
Caixa Geral de Depositos, Portugal’s largest bank by assets, needs to bolster its capital because of massive bad loans on its books.
“This is an innovative deal in Europe,” Finance Minister Mario Centeno said. “This is good news not only for CGD but for the whole Portuguese banking system.”
Portugal’s government has been negotiating with Brussels for months so the injection doesn’t fall foul of strict EU rules and doesn’t count towards the deficit.