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Speech: Portugal, Europe and the World

European Commission - SPEECH/13/2   07/01/2013

Other available languages: PT

European Commission

José Manuel Durão Barroso

President of the European Commission

Speech: Portugal, Europe and the World

Conference marking 40 years of the Expresso, Lisbon

7 January 2013

Dear Mr Pinto Balsemão,

Your Excellencies,

Ladies and Gentlemen,

Dear Friends,

It is an honour and a pleasure for me to give the opening address at this conference dedicated to the topic of 'Portugal in the World', as the Expresso marks its 40th anniversary.

I would like to start by saluting the newspaper’s chairman and founder, Francisco Pinto Balsemão, a good friend of mine, and the whole team that has helped to continue the great adventure first embarked on forty years ago.

Launching the Expresso in 1973 meant staking a strong claim to freedom and democracy.

It was a brave gamble to open up debate in a society subject to censorship.

It was also a great professional gamble to promote a totally innovative project and to bring best international practice to the Portuguese press.

Ladies and Gentlemen,

In October 1968, when Marcello Caetano had just been appointed Prime Minister, Sophia de Mello Breyner replied to questions from French journalists about the situation in Portugal, saying: ‘To deprive a country of information is to deprive it of a conscience’.

A few years later, a Portuguese public hungry for information, and high‑quality information at that, rapidly made the Expresso a recognised weekly publication of the Portuguese press.

Over the years it has gone from success to success, keeping pace with the changes in Portuguese society as well as with technological developments.

And, if I may speak in a personal capacity as someone who genuinely enjoys reading the press, and since reference has been made to my age, as someone who was involved with the República Juvenil and the Diário de Lisboa Juvenil at the time the Expresso was launched, I would like to describe the Expresso as a newspaper that practises the virtue of moderation. Or what Francisco Pinto Balsemão himself used to call sobriety. I say this as a compliment, because it seems to me that in a country such as ours where there is a surfeit of criticism, certain opinions and comments regularly stifle the facts. Overall, the Expresso has succeeded in striking a balance. This is worth mentioning as elsewhere in Europe the ‘tabloidisation’ of the press has produced categorical and immutable opinions which, taken to excess, reflect a crude and populist approach, something which we of course are not used to seeing with the Expresso.

Ladies and gentlemen, the Expresso pinned its colours to the mast of democracy before democracy had even arrived in Portugal, and it supported the European cause long before our country had embraced the European project. In reality, support for Portugal’s integration in Europe was part of the Expresso’s editorial charter right from the first issue. That is why I think it is right to say that the Expresso was and is not just a Portuguese achievement but also a European brand in so far as it is clearly inspired by the European values and principles that led Portugal to join what was then the European Economic Community in 1986. This was a decisive moment in Portuguese history, in which we can but take pride.

And as I called to mind recently in Oslo in my speech accepting the Nobel Peace Prize, we in Portugal were well aware that joining the European Community was essential to consolidating democracy in our country. The European project was and still is not just a project for peace, but also for freedom, democracy and solidarity.

We knew that sharing a common European destiny did not mean losing ourselves in a vast structure but, on the contrary, finding in that structure the inspiration and the strength to affirm our values and defend our interests.

More than ever before, the European Union is the guarantor of the ideals of peace, respect for human rights, freedom and democracy on the European continent. The successive enlargements to bring in new Member States are evidence of the validity and relevance of the European project.

That is what the Nobel Peace Prize Committee wanted to recognise in awarding this highest of distinctions to the European Union. And it is significant that, in the reasons for its decision, the Nobel Committee referred to the enlargement of the European Community to Portugal, Spain and Greece as one of the major contributions of the European project on the continent to which we belong.

The international community, through the Nobel Peace Prize, has thus sent an important message to Europe: the European Union is something very precious that should be cherished. I would therefore today once again like to thank the people from all over the world who have supported and congratulated us. They include José Ramos Horta, who is with us today, himself a Nobel Peace Prize winner, who was one of the Nobel laureates to propose that the Peace Prize be awarded to the European Union. For this I am very grateful.

Ladies and Gentlemen,

For all of us in Portugal joining the European Union meant a formidable change.

In less than a generation, our quality of life has fundamentally changed: reductions in infant mortality and illiteracy, a modern infrastructure, investment in education and in research and development.

And at this conference to mark 40 years of the Expresso, it is worth citing some figures. In 40 years, the number of doctors’ degrees awarded in Portugal has gone from 61 to 8 600; the number of medical doctors is now five times what it was in 1973, having gone from some 8 000 to more than 42 000. These are just some of the striking figures that point to the progress Portuguese society has made.

And the European Community, its policies and funds played an essential role in bringing about this economic and social progress and the modernisation of our country. Let me cite just one statistic: the European funds received by Portugal total some 96 billion euros.

The European Union has therefore been at Portugal’s side ever since the country made a clear choice in favour of democracy, and its support has not taken the form merely of political statements, it has been and continues to be very concrete.

But, and there is a but, we know that today Europe is regarded with distrust by many citizens in Portugal and the other Member States. The words Crisis and Europe are systematically used in the same breath. Is this association fair? What are we talking about when we talk about Europe? It is important to remember that the financial crisis, and what is often erroneously called the ‘euro crisis’, was brought about not by the European Union but by the unsustainable public debt created by governments and the irresponsible behaviour of the financial sector and failings in national banking supervision.

I say that it is inappropriate to call it the ‘euro crisis’ because in reality the crisis did not start in the euro zone. The crisis is affecting countries which are not part of the euro zone, and the policies we need to restore confidence are being implemented both inside and outside the euro zone.

Moreover, the euro remains a stable and strong currency. So, strictly speaking, there is no euro crisis; what there is is a sovereign debt crisis and a crisis of the financial system in Europe and outside it.

So, the European Union is not the source of the crisis, it is, to a certain degree, a victim of the crisis. It is not the problem, it is part of the solution. What is true is that requirements linked to the single currency and the integration of very diverse economies into a single Economic and Monetary Union pose specific challenges at European level. And it is these challenges that we have been meeting.

As far as the euro is concerned, the professional pessimists keep getting it wrong. Contrary to most forecasts by market analysts and political commentators, Greece has stayed in the euro and financing of its second adjustment programme has started. The question the markets are asking for 2013 is no longer, as it was one year ago, whether or not the euro will implode. I think I can say that the existential threat to the euro is essentially over. But far be it from me to suggest that all the problems of financial stability have been solved. Far be it from me to seek to ignore the economic and social difficulties being felt in so many European countries. We must not be under any illusions. Accidents can happen. In particular, it is imperative that we all keep to the course of budgetary rigour and structural reform. There are difficulties ahead, and there is much work still to do. In any event, confidence in the stability of the euro has greatly improved and this has been achieved by a combination of developments. Not one, but various causes.

First, budgetary consolidation is being pursued, which is convincing investors that European governments, and not just those of countries covered by support programmes, are determined to rein in their public accounts.

A new system of budgetary and economic governance has come into force – what EU jargon refers to as the ‘six-pack’, that is, a set of legislative proposals put forward by the Commission to strengthen integration and discipline, including a proposal setting up a mechanism to combat macroeconomic imbalances for example in the balance of payments.

At the same time, many of the euro‑zone countries, particularly in southern Europe, are carrying out ambitious structural reform programmes. This applies to Portugal, but also to Spain, Italy and Greece. Programmes which are essential for their competitiveness and sustainable growth.

The European Central Bank has announced that it is willing to buy up unlimited amounts of sovereign debt providing certain conditions are met. This announcement alone has had a major impact on investor confidence in Europe and outside Europe.

The European Stability Mechanism (ESM) was created and has been in operation since October. If we add it to the 'European Financial Stability Facility' (EFSF), the 'firepower' of these instruments amounts to approximately one trillion US dollars. In other words, in the euro zone, we are now equipped for any crisis with essentially the same volume of funds as the IMF has for the entire global financial community.

Recently a decisive step was taken towards banking union with the creation of the 'Single Supervisory Mechanism'.

So, a great deal has been done. Could it have be done more quickly? Probably. Should much of the hesitation have been avoided? Certainly!

The truth is that in the European institutions – the European Commission, the European Parliament and the ECB – we always wanted to go more quickly, to go further and to be more ambitious. However, we have to recognise that these are complex matters which involve mobilising enormous financial resources, touch on very sensitive issues of redistribution and go to the very heart of Member States' sovereignty. They are very difficult questions for the 17 countries of the euro zone, and for the 27, soon to become 28, Member States of the EU, questions which take some time to resolve.

However, we are resolving them, although possibly not as quickly as we would all prefer, certainly not as quickly as the Commission would like. It is also important to emphasise that, despite frequent hesitation by some governments, the steps taken to date have all been towards further economic and institutional integration, especially in the euro zone.

So, contrary to many predictions, what has happened is that a set of steps have been taken towards more Europe and not towards less Europe.

We have to be firemen and architects at the same time. As firemen, we put out fires. This is what we have been doing in Greece, Ireland and Portugal. Without support from Europe, these countries would not have been able to continue to function or to guarantee many of their essential functions, including social obligations. We are also supporting the Spanish financial system.

But we are also architects, not just launching the project of completing economic and monetary union, which was started but not completed in Maastricht, but also designing the next building blocks of the European political project.

Banking union as proposed by the European Commission, and deeper Economic and Monetary Union are good examples of immediate action combined with a medium and long-term vision.

The Single Supervisory Mechanism was created in record time: the Commission submitted the draft legislation on 12 September and on 12 December we had the Member States' unanimous political agreement on the new mechanism. However, this is just one part, although an essential part, of banking union, which is in turn part of the broader framework of deeper Economic and Monetary Union.

And this is what we are working on at the moment. I played an active role in preparing the 'Four Presidents' Report, drafted by the President of the European Council, myself and the Presidents of the ECB and of the Eurogroup, which we discussed at the last summit. The major steps towards consolidating Economic and Monetary Union have been clearly identified: banking union, budgetary union or fiscal union, economic union, all duly supported by stronger democratic legitimisation, are the way ahead towards genuine political union.

The rate of progress is not going to be the same in each of these areas, not least because in many cases Treaties change will be needed. I do not, however, think that it will be possible to stand still. I believe that Europe has reached a point where it has to step up integration, also at a political level, to avoid fading into insignificance. We should not forget that a political issue was at the origin of this crisis, in addition to the financial, economic and social aspects. When the markets test to see whether the Member States are in fact prepared to do everything necessary to support a common currency, they are posing a political question. And in reality, the credibility of a currency ultimately depends on how solid the institutions behind it are. This is why it is not just the most enthusiastic Europeans, traditionally known as the federalist movement, who are calling for European political union. Today, European political union is essential if we want to maintain and consolidate economic and monetary union.

The when and how to advance to this point – the path towards political union – largely depends on the initiatives of the European institutions, but also essentially on the political will of Member States, governments, societies and citizens. In this respect, it is imperative that the current relative calm of the markets does not now become a reason for governments to reduce their commitment to further economic and monetary union.

Although Europe has followed a rather meandering path in recent years, marked by some hesitation and delays, the European Commission has always kept the bar high in terms of its ambitions. Now, more than ever, it is important that we should be European 'in all seasons' and not just fair-weather Europeans.

I am saying this because I often find, to my consternation, that many Europhiles, indeed many very sincere Europhiles actually reinforce, without wanting to, a kind of Euroscepticism that prevails in many European circles. As if the negative pessimism of the Eurosceptics or those who spread Europhobia were not enough, those genuine Europeans are sometimes dejected and discouraged.

For any project to be successful, it needs a sufficient critical mass of support. I have therefore called on those who support the European Union from the left, from the right and from the centre, those who see themselves as part of this great project for peace and democracy, the European Union, to join forces to defend a project that deserves to be cherished, particularly when we hear, especially from the extremes of the political spectrum so much political discourse that is populist, negativist, and is exploring extremist nationalist tendencies which we know well as they have already done so much damage in Europe, including this part of Europe.

It is true, Ladies and Gentlemen, dear friends, that many national politicians take the credit when things are going well and blame Brussels when things go badly. Indeed, governments 'nationalise' successes and 'Europeanise' failures. We cannot therefore be surprised that support for the European Union and the European institutions has declined. Nevertheless, it is interesting to note something that is pointed out less frequently, namely that in most cases support for the European institutions is stronger than the support enjoyed by national governments and political parties.

It is important to discuss openly the reasons for the crisis in order to eliminate simplistic explanations which are thriving at the moment in certain sections of European public opinion. In reality, the situation is very complex and the answers are difficult. Some say that Europe just needs more discipline, more rigour, more sanctions. Others say that more solidarity and flexibility are what is needed. Both sides are wrong. We need both approaches. We need to shoulder responsibility and to show solidarity. This is the position which I and the European Commission have been putting forward.

I know it is easier to propose simplistic solutions. A no is easier to say than a complicated, qualified yes. But if we really want to stand our ground and win the battle against crude populist messages we must have the courage – those of us who defend Europe at least – to explain clearly, using rational arguments, that the road ahead is hard but can lead to success.

There are also those who say that the European social model is dead. I do not agree. Some of our Member States are among the most developed and prosperous countries in the world, and they combine high levels of social protection, open competitive economies and a highly developed social dialogue. The solution is not to abandon the European social model. The solution is to recognise the immense challenges that globalisation poses for European competitiveness and to reform our social market economy. This is the European Commission’s vision, one based on reform and solidarity.

The biggest challenge facing European economies is undoubtedly competitiveness.

That is why we have launched urgent structural reforms, reforms sometimes only made by possible by the pressure of change imposed by adjustment programmes, but we know we are creating the conditions to make our economies more competitive. We have created safety nets for our financial system and so gainsaid the prophets of doom.

However, it is true that the political debate in some European countries often gives the impression that the solutions proposed by the European institutions merely consist in fixing public finances. Nothing could be further from the truth. While it is true that dealing with the imbalances in public finances is a prerequisite for regaining confidence, the Commission has emphasized the need to combine structural reforms with investment. The bottom line is growth, hence the importance of instruments to promote investment.

Unfortunately, not all European governments give investment and the growth agenda the same priority that the European Commission does.

The Commission’s proposal - the Multiannual Financial Framework - recognises that national measures and policies need to be backed up by greater solidarity at European level. Responsibility and solidarity are two sides of the same coin. This is what I have been fighting for at European level. For a project of reform and solidarity. For an economically, socially and territorially cohesive Europe.

Solidarity necessarily means a financial framework that will enable greater investment in promising areas such as science, education and research, or even the large trans‑European networks.

Solidarity to continuing the programmes initiated by this Commission, in which I take particular interest, such as the European Globalisation Adjustment Fund to support the reintegration of workers affected by the relocation of companies (from which Portugal has received aid). This Fund was in fact set up on my initiative in my first mandate. Or the Fund for European Aid to the Most Deprived has been an important source of support for national food banks and helped to alleviate material deprivation and undernourishment.

Unfortunately some European governments are now calling into question, on the grounds of subsidiarity, the very existence of this fund to help the most disadvantaged. That is why I insist on asking: when we talk about Europe, what are we talking about? Are we talking about the European Union and its institutions? Or are we talking about the positions defended by some European governments?

Solidarity also means working with all the Member States to disseminate good practices, including implementation at national level of the ‘Youth guarantee’, which should ensure that all young people up to the age of 25 are offered a job, or the opportunity for further study, an apprenticeship or a traineeship within four months of completing their education or becoming unemployed.

The European Commission has therefore put forward a clear policy for sustainable, smart and inclusive growth. The essential goal is to restore confidence, not only of the markets but also of the people. Without confidence there will be no investment, and without investment there will certainly be no economic growth. By setting common goals, our agenda for growth, the Europe 2020 strategy, inspires and supports reforms across the whole European area. It is an agenda based on policies for sustainable growth, and I emphasise the word ‘sustainable’ because, as the current crisis has taught us, growth fuelled by excessive public or private debt is an artificial growth that is simply not viable.

The European Commission has therefore proposed that in the next programming period from 2014 to 2020 there be a close link between funding priorities and the objectives of the Europe 2020 agenda, and a clear commitment to the productive sectors and to raising European competitiveness, not forgetting the need to adopt principles of macroeconomic conditionality.

In fact, if we take stock of the last Community support framework, here in Portugal for example, and assess the aid granted to Portugal, we should reflect and ask ourselves: did we always make the best choices in allocating these resources? The smartest choices for developing and building the capacity of the country? This is an important point, especially now as we reflect on the strategic options and financing for Portugal and all the cohesion countries under the next support framework.

The European Commission and Portugal have been working together in recent months to implement the necessary reforms and step up existing aid, precisely through a better targeting of European funds.

And the first priority may be tackling unemployment, especially youth unemployment. The European Commission has approved the youth programme ‘Impulso Jovem’ presented by the Portuguese authorities, thanks to which 90 000 Portuguese young people will get European funding for training, job placements and the like. I hope that Portugal will now fully implement the programme, and as always it can count on the European Commission's support to ensure that the aid is delivered as effectively and speedily as possible.

Ladies and Gentlemen,

Dear Friends,

There can be no doubt that in the 21st century, at a time of quickening globalisation, belonging to a regional area, to a political and economic project such as the European Union, provides added value for each of its members.

Back in 1954, Jean Monnet wrote and I quote: “Our countries have become too small for the present-day world, for the scale of modern technology and of America and Russia today, or China and India tomorrow.” Those were Jean Monnet’s words in 1954.

Today, in this globalised world, in the company of great powers – giants even – the States of the European Union, even the larger ones, are not big enough independently and on their own to propose or shape the policies of the future at the global level. But the European Union, with its population of 500 million, is still the largest economy in the world today and has the capacity to lend extra support to the various national interests.

As such, today, sharing more sovereignty within the European Union also means recovering that sovereignty which has been lost to the markets and the transnational trends and phenomena which simply do not stop at the borders of the so-called Nation-State.

It is important that each one of us make our voice better heard. And the voice of Portugal is an important voice.

It is a voice which Europe needs. The voice of a country whose language is spoken by around 280 million people throughout the world. A country that has long had close relationships with various parts of the world which are currently undergoing some of the most remarkable developments.

And the Europe in which we believe is certainly not just a large market but also a political union. Not a Europe that is closed in on itself but a Europe that is open to others.

It is a Europe which, without arrogance but with complete confidence, asserts itself in a world that is ever more interconnected and ever more competitive. A Europe capable of defending and promoting its value and its interests.

Portugal joining the European Union was enriching for the Union. Portugal has without a doubt benefited from, but has also brought much to Europe, not only in strengthening the Community project – and it is significant that the fundamental law of the European Union is called the Treaty of Lisbon – but also in the ability which Portugal has had to increase dialogue with parts of the world with which our country has a special relationship, from Latin America to Africa and to the Mediterranean.

Portugal has given a greater dimension and strategic depth to our Union. It has contributed to a Union that is more open and turns its face to the world around it. This is also one of my objectives as President of the Commission and I am proud of the initiatives which we have launched together.

To give two concrete examples, it was in Lisbon in July 2007, under the Portuguese presidency of the European Union, that the first EU-Brazil summit took place, an event which formed a strategic partnership between the two parties. I had set this as one of my external relations priorities when I arrived at the Commission in 2004, as Brazil was the only one of the so-called BRIC countries with which no strategic partnership of this type had been agreed. By working in conjunction with the Portuguese presidency of the Council this objective was achieved.

It was also in Lisbon, again under the aegis of the Portuguese presidency of the Council that a new chapter was opened in the relations between the European Union and Africa. Seven years after the first historic EU-Africa summit, the Cairo summit, a joint strategy for a relationship of equals was adopted at the Lisbon summit, which recognised that, while it was up to each side to take charge of its own destiny, Africa and the European Union could and should do more together, particularly by declaring joint responsibility and solidarity for peace and security, for the rule of law and for the right to development.

Ladies and Gentlemen,

Dear Friends,

Portugal and the world: it is a story which goes back many centuries. The story of the discoveries and maritime adventure. The story of a people which expanded horizons and brought people together.

Today the story of Portugal and the world is one that involves the European Union.

Our world is the world of globalisation. With Europe we created and maintained the essential platform for a country like Portugal to be able to find a place for itself in this globalisation. The financial help and the adjustment programme are an expression of this. They allow our country not to isolate itself in response to the crisis, as was for example the case in the First Republic, in which a financial crisis led to the tragedy we know. The European solution is a solution which allows us to get out of a difficult situation in collaboration with our neighbours and partners.

But now, what to do with this opportunity? Because in reality a crisis such as this one is something which must not be wasted. The crisis is an opportunity to define the direction of the country, of its society, of its economy. And it is a response that neither Europe nor the world can provide. It is a response that only the Portuguese people can provide. What do they want to do now? How do they want to broaden the horizon beyond the current difficulties, beyond the current programme?

And it is for this reason that, if you will allow me to end on a very personal reflection, I am sometimes surprised to see that the debate in our country focuses so much on the short term, and that there is not sufficient reflection on the huge opportunities which the response to the crisis could open up, is opening up, to a country such as ours. It is therefore necessary to go beyond this deep-seated conservatism, it is necessary to make the most of this opportunity to reform our country, and this can and must be done in the framework of the European Union.

And it is to this European Union, which shows solidarity and is open to the world, to this European Union of Peace, of Freedom, of Democracy and of Justice, it is to this European Union that I hope that Portugal will continue to give the best of its support, its energy, its intelligence, I would say, its intuition as a country which during its history has already surmounted many obstacles and which will surely overcome the current challenges. And the European Union will continue to stand together with Portugal and the Portuguese people.

Thank you for your attention.


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