ECB Funding to Portuguese Banks Rises to Seven-Month High

The European Central Bank’s funding to Portuguese lenders rose to the highest in seven months in July.

ECB lending increased to 50.2 billion euros ($67 billion) from 49.4 billion euros in June, the Lisbon-based Bank of Portugal said on its website today. Central bank funding to Portuguese banks peaked in June 2012 at 60.5 billion euros and was at 52.8 billion euros in December.

Portugal faced political turmoil last month after the foreign minister and leader of the junior coalition party, Paulo Portas, asked to resign in disagreement over budget policy. The split was overcome and ended in a government reshuffle with Portas as vice premier after President Anibal Cavaco Silva’s intervention and failed talks with the country’s biggest opposition party on measures to complete the bailout plan.

The country in April 2011 became the third euro-region country to seek a bailout after Greece and Ireland, receiving 78 billion euros under an agreement with the International Monetary Fund and the European Union. The plan earmarks as much as 12 billion euros for the recapitalization of lenders if needed.

The Portuguese government has injected 5.6 billion euros into banks that aren’t state-owned through the nation’s financial-aid program.