Mister Speaker,
Prime Minister and Members of Government,
Members of Parliament,
Ladies and Gentlemen,

When taking office as President of the Republic, I want to enter my mandate by warmly saluting the Portuguese.

My greetings go to all the Portuguese people, those that live in our Country, on the Continent and in the Autonomous Regions, or those that dignify the name of Portugal in the Diaspora communities.

I greet the Portuguese that are listening to me, but also those that, through sign language are following the fraternal words that I wish to address on this day.

I shall be everyone’s President.

I shall be President of all the Portuguese that voted for me but also of those who did not. Facing you all, without exception, I take my solemn oath to fulfil and guarantee the fulfilment of the Fundamental Law of our Republic..

To the Speaker of Parliament, who carries out with a great sense of State the demanding mission of presiding at the institute where democracy and pluralism are daily performed, I express my thanks for the words he addressed me..

I shoulder before you, Members of Parliament, the firm and sincere design to cooperate, in the belief that the difficult time the Country is going through demands a very special collaboration between the several democratic institutions.

To the Government and the Prime Minister I reiterate the commitment that I assumed before the Portuguese five years ago. The Government may be certain of an active and firmly driven presidency for the safeguard of the higher national interests.

While President of the Republic I will meticulously comply with the commitments I assumed with the Portuguese in my electoral programme. Within the framework of all the powers conferred upon me by the Constitution, I shall be strictly impartial in dealing with all the political parties, always neutral and equidistant relative to the Government and the opposition.

I shall cooperate with the remaining sovereign bodies in order that Portugal overcomes the current difficulties and will act as a moderator of political stresses and as a balancing factor of our democratic system.

I am grateful for the presence in this ceremony of representatives of friendly countries, particularly of those representing the Portuguese speaking countries. I view in your gesture a sign of appreciation towards a sovereign nation aged of many centuries, proud of its past and confident of its future.

Mister Speaker,
Members of Parliament,

As I have always stated, only a correct diagnosis and truthful words on the nature and size of the economic and social issues that Portugal is facing will allow an adequate response, either by the public powers or by the economic and social representatives and even by the general public. Objective information on the economic and social situation of the Country is a public asset that benefits society as a whole, because it encourages practises favourable to the resolution of the existing difficulties.

The known indicators are very clear. Portugal is going through an economic and financial emergency situation that is also, at the same time, a social emergency situation as has anyway been widely recognized.

I believe that we shall be able to overcome the current problems if we are capable of providing a truly collective response to the challenges we are facing: this demands transparency and a strict and full knowledge of the situation in which we find ourselves. It is a fact of life that to find the best course to reach the target we aim, we have to be aware of our exact starting point.

In the last ten years, the Portuguese economy grew at an average annual rate of only 0.7%, diverging from our European Union partners. This divergence was yet more evident in the case of Gross National Income, which is an approximate measure of the income effectively retained by the Portuguese, Per capita Gross National Income, in real terms, only grew at the rate of 0.1% per annum, reflecting, in practice, a lost decade in terms of gains in life style.

In line with the last Bank of Portugal estimates, “the potential growth of the Portuguese economy, which determines the future capability of repaying current debt”, is currently lower than 1% and, in 2010, the real value of investment was 25% below the level reached in 2001.

Portugal’s external deficit has continued at values of approximately 9% of the product, thus contributing, due to the payment of foreign interest, to deterioration of the balance of payments, where the annual deficit, in accordance with the Bank of Portugal, is fast approaching 10 thousand million euros, depriving our economy of the fundamental resources for its development.

At the same time, the rate of national savings has been decreasing, from 20% of the product in 1999 to less than 10% in the last two years.

In 2010, unemployment was in excess of 600,000 people, comparing to 215,000 in 2001. In these ten years, the rate of unemployment increased fro 4% to a value of 11%.

Data published by the European Commission indicate that, in 2008, the number of people resident in Portugal “under the risk of poverty or social exclusion” exceeded 2,750,000, equivalent to 26% of our population. In accordance with the qualitative information made available by the institutions operating on site, this situation will have worsened in the last two years.

The margin that the Portuguese State has to attend to the growth needs of the economy and to combat social issues is severely limited, as proven anyway by the levels of public expenditure, of public debt and of the indebtedness of the State’s Entrepreneurial Sector, to which must be added the future charges with the public private partnerships.

The capability of national agents to access credit and to finance, either their capital needs or the growth of the economy is also more than ever limited. The debit balance of the International Investment Position, which corresponds to the net degree of indebtedness of the economy, is in excess of 100% of the product.

Markets continue to severely limit the recourse to finance by the national banking system, this being reflected in the worsening of the restrictions to access credit by families and companies and in an increase in interest rates..

In addition, State financing is being obtained at abnormally high interest rates, restricting the operation of the Portuguese financial system and of our economy. It is elementary to perceive that, as stated by the Bank of Portugal in its last Economic Bulletin, and I quote, “the current context of high risk premiums for Portugal’s sovereign debt implies an increased service of the external debt”. There is thus a serious risk that the payment of external interest will bar the necessary reduction of the external imbalance, even in the case of a positive development in exports.

Several other indicators could be shown to confirm that Portugal is in a particularly difficult situation.

In this context, it is surprising that the alarm sounded by the Governor of the Bank of Portugal, last January, will not have been understood in political and economic circles, since he very clearly stated that, I quote, “the trajectory of the public debt as well as those of external debt and of the International Investment Position of our Country are unsustainable”.

Mister Speaker,
Members of Parliament,

Portugal is submitted today to a budgetary and financial pincer – the budget tightening on the side of demand and the credit tightening on the side of supply. This picture will negatively affect economic growth and the life style of families, unless those responsible for the political, economic and financial issues correspond, firmly and without ambiguities, to the duty they have to free the country from this situation.

This is the reality that cannot be ignored and that it is my duty to bring out very clearly at the beginning of my second mandate as a contribution towards the urgency to act of which everybody must be made aware. The resolution of the problems demands full consciousness of the situation where we are placed. It is urgent that solutions are found, that the right path is taken up once again and that the future is duly prepared. This task will demand a collective effort, towards which we are all called upon to contribute.

It is the State’s duty to clearly define the strategic guiding lines, the priorities and the main objectives for the whole country. These will be essential references not just for the public sector but equally for private initiative.

In addition, it is imperative to improve the quality of public policies. Particularly, it is fundamental that all State decisions are duly and timely assessed, in terms of their economic and social efficiency, of their impact on the companies and on the competitiveness of the economy, and of their current and future financial consequences. We cannot run the risk to follow public policies based on instinct or mere volition.

Only with objective public policies, consistent with a sustainable budgetary strategy and with principles favourable towards the growth of private initiative, will we be able to attract investment to the Portuguese economy and seek a growth compatible with our needs. Without economic growth the social costs of budget consolidation are not supportable.

In this difficult context it is the duty of the President of the Republic to contribute towards determining the guiding lines and trends for the national economy that will allow responding to the current difficulties and to face with hope the challenges of the future.

In line with what I have defended and is written into my electoral programme, it is my belief that there are very clear strategic guiding principles that Portugal must follow. Considering the Country’s situation it is necessary to act simultaneously at the structural level, targeting the resolution of the imbalances that have affected the Portuguese economy, and in the business environment, aiming to diminish the negative impact of the current crisis on employment, on the companies and on the neediest Portuguese.

Structurally, and as I have been insisting for a long time, we have to unequivocally invest in the sectors of negotiable goods and services. Only with an increase in the allocation of resources for competitive production will we be able to begin a new development cycle. This is a challenge where the responsibility lies primarily with the State and with the financial system. It is anyway fundamental that the Portuguese absorb, with conviction, the need to produce more goods that compete with foreign production. A high and permanent external deficit is, by definition, unsustainable.

Still within the scope of the allocation of resources, it is necessary to encourage internal savings and to bar indiscriminate granting of credit, especially for non productive means and to support public expenditure. It is imperative to reallocate available credit to small and medium sized companies that create economic value and employment, and for exports.

In parallel, it is essential to draw a path that allows the strengthening of our competitiveness and to increase productivity of labour and capital. The loss of competitiveness in Portuguese economy is probably the worst symptom of our weaknesses.

In this context, it is crucial to carry out structural reforms with the objective to decrease the weight of public expenditure, to reduce the excessive presence of the State in the economy and to improve the performance and the effectiveness of public administration.

Only with strict, determined and transparent management of the public accounts will it be possible to achieve a durable economic growth, the creation of new and better jobs and the consolidation of external credibility. The sustainability of the Portuguese public finance is an unquestionable issue for the confidence of international investors. When the interest rate of public debt is higher than the nominal rate of growth of the economy the demand for the primary balance of the public accounts is increased.

It is necessary to value entrepreneurial initiative and the concept of a company as an area for dialogue and cooperation between managers and workers, to capture and maintain quality investment and to take advantage of the comparatively favourable features that Portugal has available.

It is crucial to deepen the competitive potential of sectors such as forestry, the sea, culture and leisure, creative industries, tourism and agriculture, where we possess differentiated natural advantages. The reduction in the deficit of the food industry is an objective that must be very seriously undertaken, as well as the removal of bureaucratic barriers to the access of private initiative to the economy of the sea.

The future of the Portuguese economy depends much upon the capacity to add value, to innovate and to incorporate greater technological content in our products. The interconnection between companies, higher education establishments and research centres is extremely relevant.

Continuing in the structural area, it is necessary to guarantee a simpler, more transparent and visible tax system, improve the quality of investment in training and qualification of human resources, as well as ensuring greater efficiency, credibility and swiftness in the operation of the judicial system. Justice has a crucial role in economic development, as a source of security and predictability, and functions as a reference for the raising of international investment.

Mister Speaker,
Members of Parliament,

In the current emergency situation it is also imperative to take measures as to the economic environment, that allow the lessening of the proximate effects of the crisis and to create the economic and social support required for structural change. Particularly in demand is a determined effort to combat the calamity of unemployment:

The legitimate expectation of the Portuguese is that all public policies and investment decisions take into account their impact on the labour market, prioritizing initiatives that create employment or allow the defence of existing jobs.

On another hand, it is essential to value the role of companies and of entrepreneurialism, in the same terms, for instance, as the success of our athletes in international competitions is celebrated.

It is important to recognize companies and the value they create, instead of persecuting them with menacing rhetoric or with policies that discourage initiative and risk. In the current context, companies are the institutions that are able to create new jobs and to provide hope to a generation with wide and diversified training and that is unable to enter the labour market. Companies are the institutions that are able to bring dynamism to exports and contribute to contain external indebtedness. We cannot just look askance at companies leaving our Country. On the contrary, we must seriously think what we can do to attract more of them.

The essential part of profitable investment turned towards negotiable sectors arises from private companies. We have to value, particularly, those who are willing and have the courage to innovate and invest without requiring State support.

It is especially decisive to attract young people to entrepreneurial activity. Young entrepreneurship is nowadays a reality under development in our country that must be supported in order that many more cases of success appear. Portugal needs a new wave of entrepreneurs. Entrepreneurs with autonomy from the political powers, that do not expect any type of protection or favours, citizens driven by quality and innovation, ready to take on risks and to compete in the global market.

Our local authorities, whom I take the opportunity to greet in this solemn occasion, have already understood that local authority has acquired a new profile, with the corresponding new demands.

Local authorities can have a central role in valuing entrepreneurial initiative, in the creation of employment and, generally, in the response to the economic and social difficulties of their respective regions.

In addition to their contribution to initiatives supporting the neediest, I have noticed that there are a growing number of local authority representatives who are altering their priorities towards productive industries and towards the economic valuation of their regions and their resources. This is the way to the future and equally that which may have a swifter impact in the national economy.

Local employment initiatives and proximity investments are those that can achieve more immediate results and that may be easier apprised, reformulated or reproduced.

It is urgent to remove obstacles to urban refurbishment, where creation of employment and the promotion of tourism, although long recognized, continue largely unused.

We must not give preference to large investments that we do not have the possibility to finance, that do not contribute towards growth in productivity and that have a temporary and residual effect in job creation. It is not a question of abandoning our dreams and ambitions. It is a question of being realistic.

Active employment policies also perform an important role in combating unemployment. Labour negotiations with social partners have a particular responsibility in defining swiftly effective policies, assessing results, correcting mistakes and serving effective creation of employment.

Innovation and incorporation of technological content in the goods we produce is essential. However, the potential and the relevance of the so called traditional sectors must continue to be considered. The competitive advantages acquired and broadened by these sectors, as well as the experience they already have in the international market must be taken advantage of and must not be the victims of preconceived ideas. At issue are the sectors that are traditionally job creators, positive contributors to our balance of payments and who are, in addition, essential components of social and territorial cohesion.

Increasing the efficiency and the transparency of the State and reducing the weight of public expenditure are neither just structural nor environmental priorities.

Realism, strict assessment of decisions, fairness in the distribution of sacrifices and improvement in the economic climate are currently imperative demands, but which we also owe to future generations. The route is possible, but it will not be easy, or swift.

I reiterate my belief that a collective effort is absolutely necessary. It is thus important that Government, Parliament and remaining responsible politicians take on an inclusive and cooperating attitude that is equally a factor of confidence and motivation for our citizens. Political stability is a condition that must be made available for the effective resolution of the Country’s problems. It would be desirable that the path to be followed were materialized in a medium term strategic programme accepted by an enlarged political and social consensus.

I would hope that all politicians and the powers of State as well as economic and financial agents are well aware of the current difficulties and are able to provide a view of the future that may justify the sacrifices demanded from the Portuguese.

From the European Union we must expect not just that it ensures the stability and sustainability of the Euro Zone, but also that it develops a strategy for common solidarity that promotes growth, employment and cohesion.

Mister Speaker,
Members of Parliament,

Our society cannot continue asleep in the face of the challenges placed by the future. It is necessary that a civic alarm arouses the Portuguese to the need for a strong and dynamic society that, above all else, has greater autonomy from the public powers..

The Country will have much to gain if the Portuguese, associated in many diversified ways, take a more active part in collective life, asserting their citizenship rights and duties and insisting that their voice is heard by the political decision takers. This new demanding civic behaviour must be built, above all, as an independent civic behaviour facing the State.

In several sectors of national life, with emphasis for the entrepreneurial world, signs have emerged in the last few years of a highly noxious culture, based upon the creation of not very transparent links of dependency from public powers, partially as a result of the means of influence and domain that are provided by an immeasurable weight of the State.

This culture must be done away with. There must be a clear separation between the public sphere of collective decisions and the private sphere of personal interests.

Citizens must have the conscience that a change is necessary, putting an end to the dominant culture in the most diversified areas. They themselves have to change their attitude, assuming actively and determinedly a commitment for the future that will bring a new hope for the younger generations.

It is time for the Portuguese to arouse from the lethargy in which they have lived and clearly understand that only a great mustering of the civil society will allow guaranteeing a future route for the legitimate ambition to approach the development levels of the more advanced countries of the European Union.

This is a task for us all; each one of us has to assume his own responsibilities. It is essential that a union of efforts be extant, in which each Portuguese feels that he is part of a wider whole and carries off his share of it.

We have to re-establish our agenda of priorities, again placing persons at the centre of the collective concerns. Many of our politicians do not know the real country, they are only aware of a virtual and media oriented country. We need a humane policy, guided towards the people themselves, towards whole families that face privations that are absolutely inadmissible in a 21st century European country. We need to combat firmly the inequalities and the poverty that corrode our unity as a people. There are limits to the sacrifices that can be demanded from the common citizens.

The human person must be at the centre of political activity. The Portuguese are an abstract statistic. The Portuguese are people who want to work, who aspire to a better life for themselves and for their offspring. In a social and inclusive Republic a voice must be given to those who do not have it.

In the moment we are going through, in which the economic and social crisis is associated with a deep crisis of values, the absolutely central role of the family must be underlined. The family is an essential area for the self fulfilment of the human person and, in difficult times, the ultimate refuge and support that many citizens can take advantage of. The family is the fundamental aggregating component of Portuguese society and as such, there must exist an active family policy that supports birth, that protects children and guarantees their development, that combats the discrimination of the aged and that deepens the links between generations.

The exercise of public office must be taken up by the best, demanding that the appointments of Administration officers be exclusively guided by merit criteria and not by party membership of the nominees or by their political sympathies..

Cohesion amongst generations is an important asset that Portugal still has available. Young people cannot view their future postponed due to current mistaken options. It is our duty to avoid that young people are left with a heavy inheritance, made up of debts, of future expenditure, of unemployment or of non-productive investment.

The example we have to provide to younger generations is that of a culture where merit, competence, work and public service ethics are duly valued. Amongst the new generations, Portugal has available highly qualified human resources. If nothing is done our best youngsters will settle down abroad, a process that, at any rate, is already visible.

It is fundamental that Portuguese society be aroused to the need for a new mode of political action that is able to attract the young and the more qualified citizens. The withdrawal of young people from political activity does not mean a lack of interest for the future of the Country; what is happening, in effect, is that many of the young are unable to find any interest in the current way of dealing with politics neither do they trust that, if the current state of affairs does not change, Portugal will be an area where they can materialize their legitimate ambitions. We need strong gestures that allow the recovery of young people’s trust in the governing powers and in the institutions.

It would be extremely positive if young people were to become constructive leaders of change, and that our democratic institutions were sufficiently open minded to welcome their contribution. The younger generation must be understood as a relevant part of the solution to our problems.

In a society that values merit, education is the key component for social mobility. Those who do not have sufficient resources, but that reveal merits and capabilities have to be provided with support, in order that intolerable situations of inequality amongst the Portuguese are not broadened.

It is our duty to arouse the whole of society to the importance of the investment of excellence in our education. All the educational establishments that are singled out for their results must deserve society’s and the State’s recognition. Only this way will we be able to reward the merit that guided our Republic of one hundred years.

Mister Speaker,
Members of Parliament,

Upon taking office as President of the Republic, I am deeply convinced that our Country has reasons for hope.

All along its History Portugal has been through difficulties and was able to overcome them with courage, determination and the will to win.

Immediately following the 25th April revolution civil society provided exceptional proof of its vitality when it received, without disturbance, nearly one million Portuguese who came back from Africa under extremely difficult conditions. Thanks to the support provided by families and by several institutions, their integration in the Country was carried out without major upsets, aided by one of the better qualities of our people, the capability that it has, when difficulties arise, to give evidence of a spirit of solidarity and mutual help that is absolutely extraordinary. This is our spirit, this is unique, and it is the spirit of Portugal.

We find this spirit of solidarity every day in the diverse campaigns to help the neediest. Young people take part in these campaigns by the thousands, asking for nothing in return, without thinking of appointments or benefits for themselves. To the young, who are such living examples I want to express, on this day, my deepest admiration.

We have talented young people that stand shoulder to shoulder with the best in the world, in entrepreneurial innovation, in academic and scientific quality, in cultural and artistic creativity. There is a new generation that wins successive prizes in the most diverse areas of research, that assumes leadership roles in the most varied projects, that participates enthusiastically and with admirable generosity in social volunteering activities or in environmental defence campaigns.

Our young people move around today on a planetary scale with surprising ease. Citizens of the world, familiar with new technologies and with a network society, they have available a capital of knowledge and a will to innovate that are admirable. Many of the academicians, researchers, successful professional people and young entrepreneurs who are working abroad aspire to return to their country, should the conditions exist here for their capabilities to flourish. We have to take advantage of the enormous potential of this generation and it is on it that I deposit the hope for a better Portugal.

The thought of youth was the main reason that led me to assume a second candidacy for the Presidency of the Republic. To them I dedicated the victory that was given me by the Portuguese. Now, at the moment when I am sworn in as President of the Republic I spiritedly appeal to Portuguese youth: help your Country!

Make your voice heard. This is your era. Show everyone that it is possible to live in a fairer and more developed Country, with a healthier, cleaner and more dignified civic culture. Show the other generations that you do not accept being put up with or that you resign yourselves.

Dream higher; believe in the hope for a better future. Believe in Portugal because this is your land. It is here that we must build a Country deserving of your ambitions. I am certain that all together we will win.

Thank you.