Scrutiny on Portugal's Central Bank Contract Sparks Political Debate

Portugal's Finance Ministry has initiated an audit of a contract signed in May for the construction of the central bank's new headquarters, amid potential financial and legal risks that have sparked political controversy. The call for an audit follows a report by Observador, a news site, which pointed to high-risk contingencies such as significant potential cost overruns and licensing issues in the 192-million-euro deal.

The central bank, which has yet to comment on the audit, defended its adherence to national and international best practices for contract control. This situation has prompted the junior ruling coalition partner, the conservative CDS-PP, to summon Bank of Portugal Governor Mario Centeno for a parliamentary committee review, scheduled for September. Centeno's tenure, due for reappointment or replacement this week, has faced criticism from the political right, accusing him of compromising the central bank's independence by moving from his previous role as finance minister.

The Finance Ministry's audit, to be conducted by its General Financial Inspectorate, seeks to uphold the central bank's institutional integrity while respecting its independence. The outcome could influence decisions in Thursday's cabinet meeting regarding Centeno's position.

(With inputs from agencies.)