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Portugal bankers warn EU to stop ‘playing with fire’

Published time: May 20, 2013 17:25
AFP Photo / Nicolas Asfouri

AFP Photo / Nicolas Asfouri

The heads of Portugal’s biggest banks Millenium BCP and Banco Espirito Santo, have called on European leaders to stop “playing with fire” and alarming depositors in Eurozone economies.

The top bankers expressed concern that the treatment of Cyprus has set a new precedent and as a result nervousness in the region is reaching dangerous levels.

“Leaders need to moderate their language. This could be very bad,” Ricardo Espírito Santo Salgado, chief executive of Banco Espirito Santo, told the Financial Times.

“If someone had designed a plan to hurt the European market, it would be difficult to think of something better.  You can’t keep playing with fire,” President of Millenium BCP, Nuno Amado said, talking about a “Cyprus virus.”

In March Cypriot account holders were told to take a cut on their savings so that their government could qualify for a bailout package from the troika of international lenders.

The impact of the shock decision is still being felt in Portugal and other Eurozone countries, economist Tobias Blattner told RT, stressing that EU leaders need to come up a concrete plan before they meet for an EU Summit in June this year.

“There is a very strong consensus that the Cypriot bail-out was certainly not made in the best way, because it was made in unpredictable way and I think it clearly rose to the uncertainty among investors everywhere in euroarea. So there is a strong consensus there should be a bail-in, which is certainly something good in a long run but it should be according to clear spelled out rules and that essence it’s now very important that leaders in summit in June at the very latest will come out with a very clear bail-in packing order that uninsured depositors will not be hit in any restructuring of banks in euroarea in the future.”