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Growth the key in Europe says Portuguese president


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Growth the key in Europe says Portuguese president

Portugal is going through a serious economic crisis. First quarter results show a four per cent contraction on the same period 12 months ago, it follows two years of recession. It is an example of the European Union in crisis.

Euronews Michel Santos spoke to Portuguese President Anibal Cavaco Silva about the turbulence sweeping Europe.

Michel Santos, euronews:

“Mr President you follow European events closely, you have been a prime minister for 10 ten years and are now in a second term as president.
How did Portugal get into this situation?”

President Cavaco Silva:

“We have reached a situation of excessive external state debt after the ease with which the state , banks and companies were able to borrow in the eurozone, that has led to excessive debt within families. The crisis was triggered in the US in 2008, the reaction of the EU was not the most realistic. In the beginning EU states were advised to adopt expansionist policies. In other words increase their debt. Only later did we realise that some nations required a limit on borrowing.”

Michel Santos: “So European Union crisis management has failed?”

President Cavaco Silva:

“I would say that the European Union, and it is clear, has failed to promote growth and job creation. Something has failed in the economic policy of the European Union as a whole, but also in the economic policies of member states.”

Michel Santos:

“In a recent report the International Monetary Fund spoke of mistakes in the first bailout programme for Greece.”

President Cavaco Silva:

“The time has come to rethink the Troika, its composition and role in implementing the bailouts. It is my personal opinion that the task should be left to European institutions in design, surveillance and adjustments, because the objectives of the EU are very different from those of the IMF.”

Michel Santos:
“What action is needed in order to revive the credibility to the European project ?”

President Cavaco Silva:

“Firstly we need to find a solution to our major concern, which is unemployment. A programme to tackle youth unemployment is being established. Beyond that
the EU needs more tools, the ones from the past are not enough to deal with present or future problems. That is why it is key to create an Economic and Monetary Union. The most important step, for me, is a banking union because it would contribute to the financing of enterprises across Europe, in particular the eurozone.”

Michel Santos:

Should the troika bailouts have been implemented blindly, without respect for people and an almost total disregard for the consequences?”

President Cavaco Silva:

“Well, there is a change, since adjustments are being made in the programs. More time has been given to countries to tackle excessive debt, as is the case in Portugal and others, like France and Spain, so we must recognise that things are changing in European institutions and member states. I think the bailout programs have to give special priority to growth, both economic and in employment. If not, the divide between European citizens and their leaders will be much wider and that is a worry, as elections take place in 2014.”

Michel Santos:

“In Portugal all sectors of society are calling for the government to resign. You are, obviously, giving priority to stability, a very difficult task. Do you still have the political backing?”

President Cavaco Silva:

“The Portuguese President does not govern and is not responsible for government policy. The government is accountable to the parliament. The lack of trust in the Portuguese President is not a reason for the government to resign. The President has the power to dissolve the national assembly, known as the atom bomb, and the atom bomb is not used in a reckless way. I have a commitment to study the Portuguese situation and it is my belief as a result of all information that I have – and I have a lot – if Portugal goes into a full-blown political crisis then we will be in a much worse situation than the one we are in already.”

Michel Santos:

“This is a question that the Portuguese people ask a lot. From the financial and economic disaster of the Portuguese state to the ruinous management of public enterprises. Why is no one held to account, why is no one facing the courts, do we have a justice problem?”

President Cavaco Silva:

“We cannot generalise. It is clear that the crisis in the justice system is being solved, especially the speed lawsuits are processed. In a recent opinion poll several entrepreneurs recognise our justice system is fair.
So I think that the idea that you have just presented is incorrect. public life in Portugal is enormously transparent.”

Michel Santos:

“But there’s a feeling of impunity for some people that have government responsibilities.”

President Cavaco Silva:

“Show me one case. Those that govern in Portugal are, fortunately, permanently scrutinised by the media, by public opinion. I doubt that there is more scrutiny in other countries than in Portugal.”

Michel Santos:

“If you could go back to your time as prime minister, would you change any of your policies?”

President Cavaco Silva:

“I think that the Portuguese membership to the EU, the first ten years not only have consolidated our democracy but have also given a notable contribution to the development of the country. As you know Portugal entered the European Union with a per capita income within the EU average. After 10 -15 years we had 75 %. Never in our history, in such a short period, have we had such big recovery in terms of the country’s development.”

Michel Santos:

“Even in the Agricultural sector you would keep the policies?”

President Cavaco Silva:

“I would say that it is the one that I am most proud. Because we made the CAP reform, our agriculture had very low productivity, the farmers had a very low income level. Now you can see that Portugal has a self-sufficiency of 81 percent our farmers have modernised their operations and are now a net contributor. It is now the sector that is showing growth in the Portuguese economy.”

Mr. President, thank you very much.

Every story can be told in many ways: see the perspectives from Euronews journalists in our other language teams.

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