LISBON, Sept. 26 (Xinhua) -- Tensions are rising between Portugal's finance ministry and its central bank Tuesday after comments made at a banking conference here, local media reported.
"It's not only in southern countries where there's this temptation to reduce central bank independence," said Bank of Portugal governor Carlos Costa at the opening speech of the conference Monday, adding "it's not just an issue for the Portuguese, this idea of tucking the money away somewhere and then the temptation disappears."
The conference on risk management for central banks, was a joint initiative organized by the Bank of Portugal and the European Central Bank (ECB).
A source from the finance ministry told a number of media outlets, including the online newspaper Eco, that Costa's comments were "unfortunate" and that the ministry "hoped the governor would retract them."
All eyes were therefore on Costa as he made the conference's closing speech on Tuesday.
"People tend to forget about the pyromaniacs and blame the firemen," he said, suggesting a blame game is at play.
The friction dates back to when the Socialist government took power in late 2015 and criticized the central bank for transferring bad debt from the failed Banco Espirito Santo to new entity Novo Banco.
There have since been claims from the government that the central bank has been slow to pass dividends onto the state, which would have helped the government balance its books and satisfy European Union (EU) partners.
Meanwhile, there is added tension since the government drafted proposals that would change the way Portugal's banking regulatory body is formed and the central bank governor is appointed. The government is also negotiating the 2018 state budget -- to be presented to parliament on Oct. 13 -- with dividends again a point of contention.
