Not everyone is feeling the pain in Portugal

What with record unemployment, a massive squeeze on incomes and welfare and public services being slashed, it’s tough for the Portuguese these days. Not for all of them, mind you. Not the shareholders and top executives of Portugal’s banks.

True, the country’s banks are now in the red, with the largest sustaining collective losses in excess of Euros 1 billion in 2011. The EU-IMF-ECB sponsored austerity measures have sent the country into a deep recession and so they’ve been left with a mountain of bad debts. And then there’s that bad gambling habit in Greece that for a good period of time was highly lucrative, but now their luck has definitely turned. The EU has also demanded they ‘deleverage’, that is, that they lend less for any given quantity of capital in the coffers, meaning fewer possibilities of a quick speculative profit.

But, unlike your average João who has little if any chance of accessing affordable credit to tide him through until better times come, top banks like Banco Comercial Portugues, Banco Espirito Santo and Banco BPI have never had it better. They can borrow almost for free, or at a 1% interest rate from the European Central Bank. And then in a fantastic wheeze, the banks lend the money back, at a significant premium, to governments who are in effect the ones behind the same dirt cheap ECB loans.  They make a handsome profit, for doing nothing, literally. For the government is also asking them nicely to lend to businesses and consumers, but there’s not much sign of this.

And if the bank’s larger shareholders are less than happy today with the share price performance, they can at least comfort themselves with the thought of their nice little nest egg, built up from their share of the £6 billion in dividends paid out over the past decade or so.

The banks’ executives, meanwhile, have to put up with packages are a little less shiny these days, but at least it is reassuring to know they are not among the 1,000 or so bank workers losing their jobs, along with the closure of 150 odd branches around the country. And they can also remind themselves of the piles of cash they have in their own personal offshore accounts, full to brimming with all those bonuses linked to the Euros 24 billion profits they’ve made from largely idiotic investments over the last 10 years.

But most importantly, there’s the thought that if it gets really tough, the bank executives can rely on a fresh hand out (aka ‘recapitalization’) of Euros 12 billion of public money, which is part  of the Euros 78 billion IMF-EU-ECB package with lethal austerity strings attached and reserved, not for bankers who caused the country’s downfall, but for the misery of João and millions of other ordinary Portuguese.