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Statement by the President of the Republic

President of the Republic issued a statement at the end of the meeting of the Council of State

The President of the Republic presided at the meeting of the Council of State, which he had called with two items on the agenda – State Budget for 2011 and political situation – and addressed a statement to the media after the meeting ended.

Following is the text of the statement of President Aníbal Cavaco Silva:

"I held a meeting of the Council of State today to hear the opinion of this body on the current political environment, as related to the Government Budget for 2011.

I decided to call the meeting of the Council of State because, in the Country’s current situation, the approval of the Budget is fundamental to obtain the external loans required by the State from banking institutions and other several economic agents.

Our economy cannot operate satisfactorily without recourse to external finance.

This situation results from an issue to which I have been calling attention for a long time and that is now visible to all: the serious imbalance of our external accounts and the extremely high indebtedness of the Country to foreign institutions, which has been joined by the international financial crisis.

In this context, if the State Budget is not approved, there will be a drastic reduction in the concession of credit to corporations and families that will give rise to shrinkage of the economy and to a still greater increase in unemployment.

I am well aware of the difficulties that Portugal has faced in obtaining external loans at acceptable rates of interest. For this reason I have been closely following, for several months, all the political issues related with the State Budget for 2011.

At the end of September, before the presentation of the State Budget to Parliament, the possibility of a political crisis came up in relation to an eventual lack of approval of the Budget.

 

 

Resulting from this I immediately held meetings with the political parties represented in Parliament. Further, with the discretion required in such circumstances, I kept in close and permanent contact with the Government and political party leaders.

I alerted them all to the grievous consequences of a political crisis, and very clearly underlined the need, on behalf of the highest national interest, to undertake a special effort in terms of negotiation to reach a compromise that would allow the State Budget to be achieved.

I also made clear to the political parties and their leaders that, since in the terms of the Constitution the President of the Republic cannot currently dissolve Parliament and call new elections, a political crisis could not be resolved before a deep worsening of our current economical situation occurred, which would grievously affect the lives of all our people and their families.

As publicly known, negotiations between the Government and the largest opposition party commenced last Saturday; these, however, reached a deadlock in the middle of this week.

I immediately decided to hear the members of the Council of State, whose stated opinions were that the Government and the political parties represented in Parliament should make an additional effort to arrive at a compromise as quickly as possible and before next Wednesday, when the general vote on the Budget for 2011 will be held.

Today, both the Government and the largest opposition party showed their willingness to achieve the desirable understanding towards the approval of the Budget.

In democracy, a Government without a Parliamentary majority must find the required understandings to ensure the governance of the Country. To the opposition parties, in turn, willingness to compromise is demanded.

Whilst President of the Republic, I have the duty to once again clearly state to the Portuguese that the current financial situation of the Country is extremely serious and cannot endure attitudes that lead to the opening of a political crisis.

At a time such as that in which we live, in which so many sacrifices are demanded from the Portuguese, nobody can resign his responsibilities.

I trust the Government’s and the opposition’s sense of responsibility. For this reason, I confidently hope that an understanding will be reached that will allow the approval, in Parliament, of the State Budget for 2011.

Good evening. "