Rehn Says Portugal Bank Aid Funds Shouldn't Be RedirectedRebecca Christie
Portugal’s banks need the 12 billion euros ($16 billion) that were set aside as backup funding and the government shouldn’t use the money to assist other industries, European Economic and Monetary Affairs Commissioner Olli Rehn said.
“At the current stage, it is not advisable to rededicate the money” as “this could entail serious risks to the stability of the financial system,” Rehn said in a Jan. 17 written answer to a question from a member of the European Parliament. He said the funds were allocated as part of a broader Portuguese bailout from European authorities and the International Monetary Fund to help the country’s lenders bolster their capital if they lose access to markets.
“The amount of 12 billion euros has been carefully chosen so as to provide sufficient insurance against financial risks whilst avoiding significant amounts of money being unused,” Rehn said.