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Good evening,

We were all unexpectedly faced, last week, with a very serious political crisis. The effects were immediately felt in the increase of interest rates and in the deterioration of Portugal’s image abroad.

The Portuguese were able, as such, to note what it means to join a political crisis with the economic and social crisis the Country is going through.

Within such a grievous picture, it is necessary that everyone acts serenely and objectively, ascertaining with good sense and responsibility which are the solutions that, due to credibility and consistency, will better serve the national interest.

This political crisis is different from any other that Portugal knew in the past. It occurs at a moment when Portugal is bound by a demanding Programme of Financial Aid established with the European Union and with the International Monetary Fund, institutions that have been providing the resources required to finance the State.

We assumed the commitment to put into practice, until June 2014, a set of measures targeting the reduction of the imbalance of the public accounts and the adoption of reforms that guarantee the improvement in the competitiveness of national production.

The Programme of Financial Aid is still in force, and it’s being rigidly carried out is an intrinsic condition for our external credibility and to obtain the financing the Country requires.

In the face of the loss of credibility and confidence brought about by last week’s events, several voices, from several quarters, have considered that the current political crisis can only be overcome through the dissolution of Parliament and the calling of early elections at the end of September.

I heard the parliamentary political parties and the social partners, all of which showed very diverse opinions on this issue.

At a moment when Portugal is going through one of the most critical stages in its democratic regime, it is my first and foremost duty to make known to the Portuguese what are the consequences of holding early elections in the environment in which we are living.

The end of the Adjustment Programme to which we are committed with the international institutions and with which we have been complying since June 2011 with telling sacrifices for the Portuguese, will come up in less than one year.

To start an electoral process now could mean a step back in what has already been achieved and require a new programme of financial aid. The sacrifices of the Portuguese could have partly been in vain.

During more than two months we would have a management government limited in its capabilities to take measures and in the defence of national interests. In the last parliamentary elections, there was an 82 day delay between the announcement of the dissolution of Parliament and the new Government being empowered.

On another hand, the Portuguese must be made aware that carrying out early elections, even if such should occur in the month of September, the State Budget would only come into force, at best, at the end of March of next year.

The 2014 State Budget and the moment of its coming into force are determining factors in order that Portugal may return to the markets and obtain the indispensable financial means for the financing of its and the State’s economy and to successfully close down the current Adjustment Programme.

The lack of a State Budget would significantly worsen the risk of Portugal requiring a new financial aid programme. Such a new programme would probably be more demanding and would have more grievous conditions than that which is currently in force, with direct – and dramatic – effects on the day-to-day living of the Country’s families. In addition, there is even no guarantee that the national parliaments of the several European States would approve this second financial rescue.

One other reason exists, which the majority of the Portuguese are probably not aware of, which would dissuade carrying out early elections in the near future. The medium and long term loans which we contracted earlier, totalling 14 billion euros, will become due in 2014. It happens that one of our creditors, the International Monetary Fund, demands a rule in these circumstances: the debtor State must have available the means required to reimburse the loans one year in advance of these becoming due. Very simply, Portugal has to ensure, in the coming months, the total financial means to pay the loans which will become due in 2014.

On another hand, the immediate carrying out of early elections could compromise the positive completion of the 8th and 9th assessments of the Programme’s execution, estimated to take place in this month of July and at the end of September, which could lead to suspending the transfer to Portugal of those parcels of the loans that were granted to us.

A scenario of legislative elections, in the current context, would be extremely negative for the national interest. If held in the near future, the elections would take place in a very unstable financial climate, and the degree of uncertainty and lack of confidence of the economic agents and the markets in our Country would be extremely high.

The recent signs of economic recovery would recede and investment, which is so decisive for the recovery of economic growth and employment, would continue deferred.

With the increased uncertainty of an electoral act in this environment, it would be difficult to regain the markets’ confidence and to successfully complete the Readjustment Programme in June 2014.

The risk of having to request a new financial rescue is very considerable. In the case of a second bail out, Portugal’s position would become extremely devalued both in the European Union and other countries with which we maintain an intense economic relationship.

In addition to these economic and financial reasons, there are other political reasons that dissuade the immediate carrying out of early elections.

Elections, if carried out in the month of September next, would be held in the midst of a very tense and brittle climate amongst the various political factions, as the Portuguese have been able to assess. This would cause great difficulty in the setting up, after the electoral act, of a consistent and solid government.
In the current climate, early legislative elections have the serious risk of not clarifying the political situation and could, on the contrary, contribute to confuse it still further and create greater precariousness and instability.

It would be extremely important that political parties should immediately adopt an attitude of wide openness to compromise and to the need to work jointly towards the resolution of the complex issues that Portugal will have to face in the future.

Portuguese,

Having advised the Country what I believe is the current situation and the reasons why I consider undesirable the immediate holding of legislative elections, I now want to put forward my understanding of the solution which would best serve the national interest.

In the context of the financial restrictions which we face, the recent political crisis clearly showed that the Country urgently requires a medium term agreement between the parties that subscribed the Memorandum of Understanding with the European Union and the International Monetary Fund, PSD, PS and CDS.

This is the path that we must jointly tread. I will provide my firm support to such an agreement which, in the current environment of emergency, will truly represent a commitment for national deliverance.

The President of the Republic cannot compel the parties to accept this, obviously because such a far reaching agreement would only have any consistency and solidity if it could count upon the voluntary, firm and responsible adhesion of the involved political forces.

The political parties will have to arrive at an understanding and conclude that this is the solution that best serves the interests of the Portuguese, now and for the future.

With the maximum clarity and all transparency, I assert that this compromise must be based upon three fundamental pillars.

Firstly, the agreement will have to establish the most adequate timetable for the holding of early elections. The opening of the procedure leading to the elections being held must be coincident with the end of the Programme of Financial Aid, in June of next year.

Secondly, the compromise for national deliverance must involve the three parties that subscribed the Memorandum of Understanding, guaranteeing support to the measures that must be taken in order that Portugal may return to the markets immediately after the beginning of 2014 and so that the Adjustment Programme to which we are committed with our creditors may be successfully completed.

The Portuguese negotiating position would be strengthened, avoiding new and more lasting sacrifices for the Portuguese.

Thirdly, it must be a medium term agreement that immediately ensures that the Government resulting from the following elections may have the backing of a commitment between the three parties that ensures the Country’s governance, the sustainability of the public debt, the control of the external accounts, the improvement in the competitiveness of our economy and the creation of employment.

It is essential that we remove from our view of the future the risk of going back to the situation which we are currently living.

I am well aware of the political difficulties to achieve this agreement, and I recognize the enormous effort that the party leaders will have to render for the purpose, but I have no doubts that this is the solution that better serves the national interest and that guarantees, to any government, the conditions necessary to face the issues that challenge the Country.

Should the will and the spirit of cooperation between the parties that subscribed the Memorandum of Understanding exist, from the start, and should these be able to place national interest above their own, I believe that it will not be difficult to materially determine the contents of such an agreement. Moreover, such an agreement will be bereft of great technical complexity and could be reached at an early date with recourse, if necessary, to a prestigious individuality that would promote and facilitate the necessary dialogue.

I will give all my support to this patriotic commitment, convinced that it will decisively contribute to external and internal confidence and will be a cause of hope for all the Portuguese.

I will now hold contacts with the responsible heads of the parties that subscribed the Memorandum of Understanding in order to discuss my proposed solution.

Portuguese,

The hour of responsibility of the politicians has now arrived. The decisions to be taken in the next few days will determine the future of the Portuguese over the several coming years.

The coming issue is much too grievous and greatly relevant. A medium term compromise is the solution that best serves both the national interest and that of all parties concerned, who may then prepare themselves for the coming political cycle, having shown the Portuguese their sense of responsibility.

Without this agreement, there will naturally exist other solutions within our juridical and constitutional system.

However, should this compromise not be reached, the Portuguese will be able to infer their opinions regarding the politicians that govern them and that aspire to become a government.

My assertion is that the current Government continues fully in office and that, in the terms of the Constitution, as I stated before, solutions are always available for the current political crisis. The Portuguese must be conscious, however, that none of those solutions will provide the same guarantees of stability that allow viewing the future with such confidence as that resulting from the proposal that I have now put forward.

After so many sacrifices to which they have been subjected, after having shown an admirable sense of responsibility, the Portuguese have the right to demand that the politicians are prepared to face this hour of national emergency.

I believe that the political forces will be able to place national interests above their party political interests, especially because they must all be conscious of the extreme grievousness of the situation in which we are found.

I thus wish to end by placing my trust in the patriotic spirit of the political forces and, above all, in my hope for a better future for all the Portuguese.

Good evening.