Portugal's plan to pump nearly 5 billion euros ($5.6 billion) into its biggest bank by assets is "another big step towards the stabilization of the Portuguese financial system," the country's financial minister told CNBC on Thursday.
The European Commission (the executive wing of the EU, of which Portugal is a member) and Portugal have agreed in principle to the recapitalization of state-owned Caixa Geral de Depósitos.
"This is another big step towards the stabilization of the Portuguese financial system. This is a ... milestone in the process and we are looking for business plans. I think it will create necessary turnout not just in Caixa but also in the Portuguese financial system," Mario Centeno told CNBC.
The plan was agreed late on Tuesday afternoon. It would see Portugal pump up to 2.7 billion euros of state funds into Caixa, transfer 500 million euros of its ParCaixa shares to Caixa and convert 960 million euros of contingent convertible bonds into equity.