Honourable Rector,
Professors, Fellows and Students,
Ladies and Gentlemen,

I would like to thank you for the kind invitation to address this distinguished audience. It is for me a great honour to be at the Bosphorus University, renowned for its history, for the quality of its teaching staff and for the large number of its students that have become well-known in economics, in science, in arts or in politics.

When preparing this visit, I thought it would be appropriate to use this opportunity to speak to you about Portugal’s experience regarding European integration. For I believe it makes sense to bring forward the Portuguese experience at a time when Turkey is proceeding with the negotiations for accession to the European Union. An objective – let me be very clear about that – which is not only fully legitimate, but also advantageous for both Turkey and the EU.

I will concentrate on three issues. Firstly, I will approach the rationale behind Portugal’s accession and the negotiation process.

Secondly, I will share my assessment of almost 25 years of my Country’s full integration into the European Union.

Lastly, I will refer to the current main challenges facing European integration.

Portugal is a founding member of NATO and participated in the setting up of the European Free Trade Association - EFTA.

However, it was only after the democratic revolution, in 1974, that it became possible to envisage with realism our accession to the European Communities.

The application was made in 1977 with broad support from the Portuguese people, except for some minority sectors in the extremes of the political spectrum. Still, many Portuguese saw membership as a remote dream, perhaps even unattainable.

The main reason for applying for accession was political. On the one hand, the purpose was to get Portugal anchored to its natural geo-political area, Europe, and to the core values of European identity.

On the other hand, there was a need to consolidate the still incipient democratic regime as well as the option for a market oriented economy and the European social model.

The presence of large Portuguese communities in some European countries, particularly in France and Germany, also weighed in our minds.

Economic and social issues also played a relevant part, since we knew that accession could become, as it did, a key factor to promote economic development and to improve the living standards of the Portuguese.

And how did Europe see Portugal in the mid-seventies? On the one side, it expressed solidarity towards a country which was then fighting to consolidate the democratic regime and fundamental rights and freedoms.

On the other, Europe was aware of Portugal’s geo-strategic value, a sort of European face looking towards the Atlantic, with a platform in mid-ocean, the Azores Islands. Europe also recognized Portugal’s external calling, particularly the close bonds with Africa and Latin America.

It was therefore in Europe’s vital interest to secure Portugal’s involvement in the European construction process.

The negotiations for Portugal’s accession started in 1978 and were not concluded until 1985, which means, more than seven years later. I will not recall all the details of our complex and demanding negotiations, filled with moments of enthusiasm, but also of dismay, of advances, but also of setbacks. I will just recall that agriculture, fisheries, and the free circulation of workers were the most difficult chapters.

Once the negotiations were completed, Portugal became, on the 1st of January 1986, the 11th Member State of the European Communities.

It seems appropriate to recall the persistence and the coherence of the Portuguese negotiators, their strategic sense of purpose as well as the continuity of the political guidance, notwithstanding frequent changes of Government. Politicians, diplomats and public officials converged in their efforts, insisting on the objective of placing Portugal at the core of European integration.

Portugal acceded the European Communities knowing that it was facing both a demanding challenge and an opportunity it could not miss. However, before accession, there were many fears, even among the most pro-Europeans. Fears from those who believed that our national identity, forged through more than eight centuries of History, could be diluted following European integration. Fears from those who thought Portugal risked losing its historical bonds with other regions of the World. Some even went to the point of predicting that Portugal would become a net financial contributor to the European Communities.

Such fears were never confirmed.

In 1986, I was Prime Minister and it was in such capacity that I lived through the first ten years of accession. Therefore, my remarks reflect my experience as leader of the Portuguese Government as well as member of the European Council. That decade corresponded, precisely, to the period when European integration witnessed an unprecedented acceleration.

Portugal’s integration was, no doubt, a case of success, recognized as such by the EU institutions and various independent international organizations.

Politically, Portugal’s accession was a landmark for our democracy and for the consolidation of a market economy.

Portugal used European integration as a lever for reform: opening the economy to the private sector, liberalizing trade, modernizing the tax system and reforming labour market legislation. European Structural funds were used as an instrument to modernize infrastructures, which at the time stood far behind Europe’s, and also to promote vocational training and to support industrial adjustment.

Portugal proved that the opinions of those economists who considered that my Country would not have the capacity to absorb community funds after accession were wrong. The setting up of competent teams to deal with the planning, programming and execution of projects eligible for community funds has proved instrumental to ensure that outcome.

Portugal acceded to the EU with a per capita GDP of about 53% of the Community average. We quickly overtook Greece in the pace of real convergence, which led us to 73% of the community average.

EU financial aid contributed with approximately 0.5pp to the annual growth of the Portuguese economy in the first fifteen years after accession. We reduced the inflation rate to the EU average. Unemployment fell to historically low levels and we managed to gradually up-grade our export structure.

A relevant factor behind this performance was the exponential growth of direct foreign investment in the years following European integration.

Would this have been possible without our acceding to the EU? Obviously not!

I must also tell you that the external projection of Portugal actually increased with European integration. The EU was, in fact, a magnifier of our historical external vocation.

This became particularly evident when we took over the presidencies of the Council of the European Union. For instance, when I presided the EU Council, I promoted the first EU-Mercosur Summit and the EU-Brazil and EU-Macau Agreements were signed. Over the two subsequent Portuguese presidencies, particularly relevant meetings took place and EU agreements with India, China, Brazil and the African Continent were made.

Portugal has thus been fully involved in European construction, contributing to the definition of common interests, sharing initiatives, and helping to find new ways to deepen European integration.

This attitude gave us the necessary credibility within European institutions and with our partners and allowed us to be at the front line of European integration. This was the case with the internal market; with the free circulation of people decided in Schengen, (Portugal being one of the seven founder Countries); and it was also the case with the euro, the single currency, which Portugal has shared since the beginning.

The internal market provided Portugal with full access to the largest market in the world. Its establishment was accompanied by a policy of social and economic cohesion aimed at supporting regions which were structurally unprepared for this competitive challenge. Cohesion policy became a fundamental pillar of European integration.

The free circulation of people has favoured, from the very beginning, the community of Portuguese emigrants in Europe, since they became beneficiaries of a European citizenship status which complemented their national citizenship.

The Economic and Monetary Union is a historic step ahead in European integration.

In 1992, under Portuguese presidency, the Treaty of Maastricht, which set out the creation of the single currency, was signed. An enormous leap in the History of Europe and one with deep political and economic significance.

After a period of transition, a group of 11 countries, which included Portugal, launched in 1999 the European single currency, the euro.

Portugal’s adoption of the euro opened room for the financing of the Portuguese economy in better conditions, favoured the attraction of investments and enhanced the free circulation of people, goods and services.

It is obvious that, with the euro, Portugal became part to a more demanding economic area. More demanding in what regards fiscal discipline; more demanding, as well, regarding competitiveness, since exchange-rate devaluations ceased to be a possible remedy to competitive deficits.

In short, let me emphasize some of most relevant points of Portugal’s experience in European integration:

1. The achievement of credibility, through a coherent and stable European orientation and a good domestic performance, both in terms of democracy and in the functioning of the economy.
2. The political and technical capability to articulate the national interest with the common European interest and thus achieve European solutions for national issues.
3. The domestic reformist stance, in order to conform legislation and administration to EU standards.
4. The extensive and fast capacity to absorb community funds.
5. The intense and frank cooperation with the European Commission, which allowed us to find adequate answers to the issues that were specific to the Portuguese economy. The European Commission, presided today by a fellow countryman, José Manuel Barroso, my Minister for many years, is a key Institution to ensure a successful integration.
6. The strict and systematic coordination of European issues, both at the Government and the Administration levels. This was an aspect to which I attached particular importance when I was leading the Portuguese Government.
7. The commitment of diplomats and government officials regarding European issues. In order to achieve good results it is fundamental to ensure, at all levels, the highest qualifications in national representation.
8. The permanent defence of a Europe open to the world, with deeper links with the areas close to it in geographical or identity terms, such as the Mediterranean, Latin America and the African Continent.

Ladies and Gentlemen,

European integration is not just about the past. It is, above all, about building the future. Portugal endeavours to contribute to that future, as it showed, under its last Presidency, when a compromise about the Lisbon Treaty was achieved.

I would like to finish with a few notes on the future of European integration.

Firstly, I think that the European construction does not confine to economic integration. There is a political dimension that should be progressively deepened. This is the case with the common external policy, indispensable to provide Europe with an influential role in the multilateral and multi-polar world which is emerging. The financial crisis which we are facing demands yet more from European integration. The experience of the European Union can and must inspire the international regulatory system.

In the field of security and defence, also, the European Union must strengthen its capacity to act jointly, in order to be able to defend its fundamental interests. Maastricht pointed to that course in 1992. It must be pursued.

Secondly, I believe that enlargement is part of the DNA of European integration. The European Union is the main guarantor of peace and stability in the European continent.

Europe’s success in the new global world is also dependent upon the enlargement of the European Union. And, for this reason, it has the duty to welcome the European States who are willing to join and have fulfilled the required criteria.

Thirdly, there are several principles which my Country considers vital for the future of European integration. Equality among Member States is one of them. European construction would be at risk if this principle were to be questioned. Solidarity is another one. In reality, solidarity is the founding principle of European integration, as stated in the 1950 Schumann Declaration.

Fourthly, Portugal, in coherence with its geography and its History, defends Euro-Atlantism in the sense of a permanent search for strategic convergence between Europe and the USA. This is important for Europe, the USA and the world. Transatlantic convergence vis-à-vis the great challenges of the world, be they peace, security, respect of human rights, climate change or economic and financial regulation, is more necessary than ever.

Finally, in order that the enlargement and the deepening of European integration run in parallel, in a gradual, consistent and balanced way, it is necessary to enhance the stability of the European institutions, providing them with a more democratic, effective and transparent model. This is the purpose of the Treaty of Lisbon, which I hope may shortly come into force.

European integration, indeed, is the most valuable asset that Europe holds to successfully face the challenges and the changes that the XXI century will bring. It is the duty of European leaders to take full advantage of it.

Thank you once again for your invitation. I wish every success to the Bosphorus University, its faculty and its students.

Thank you very much.