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Portugal no.2 bank BES says bailout to be avoided
LISBON, Jan 31 (Reuters) - An international bailout of Portugal would most likely lead to capital flight and should be avoided, the head of Banco Espirito Santo said on Monday, siding with the government that has ruled out asking for aid.
Ricardo Espirito Santo Salgado, the chief executive of Portugal's second-largest listed bank, said bailouts by the European Union and the International Monetary Fund for Greece and Ireland had failed to help their economies as their borrowing costs, especially for companies, keep rising.
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'We continue to defend that an intervention by Europe and the IMF should not be supported,' Espirito Santo Salgado told reporters. His bank earlier posted a small drop in 2010 net profit, partly due to the impact of the debt crisis
When asked if a bailout of Portugal would lead to capital flight and declines in bank deposits, he said: 'I believe it is very probable.'
'The evolution of deposits in Greece in 2010 was a non-stop decline and there is an abrupt drop in deposits in Ireland, already after the intervention of the European-IMF programme ... therefore falling deposits, falling savings mean capital flight abroad,' he added.
The Portuguese government has on many occasions said that bailouts have not resolved any problems in Europe and that Portugal does not need any help from abroad as it will meet its ambitious budget deficit reduction targets.
The government plans to cut the deficit to 4.6 percent of gross domestic product this year from last year's over 7 percent and then bring the gap below the 3 percent threshold demanded by Brussels in 2012.
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UPDATE 1-Portugal no.2 bank BES says bailout to be avoided | Reuters
L'importante e che non ripetano le idiozie (dette) e gli errori fatti con la Gracia.......per L'irlanda il vero loro problema sono state le banche , che si sono messe scimiottare le banche d'affari americane...