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End of single currency would be “terrible”

Portugal’s President Aníbal Cavaco Silva has voiced his fears that the end of the single currency in Europe would be “terrible”.

In an interview with a Dutch daily newspaper, the president admitted that the Portuguese have had “an easy life” since the introduction of the Euro.

He regretted the way in which the country closed its eyes to the consequences of not having to take into account an exchange rate policy.

“We were, therefore, too negligent,” the president said in the interview with the economic daily newspaper Financieele Dagblad, which was published recently.

He insisted that a “certain equality and balanced distribution in bearing the consequences of the crisis” needed to be found.

Referring to austerity measures that the Government was currently implementing and stressing the “great patriotic responsibility” that the Portuguese had been showing, he said: “Obviously the Portuguese aren’t satisfied. But now it’s time to put right our mistakes.”

The president said he was “very worried about social unrest” but he disagreed with the negative prognosis that Portugal would not be able to overcome the crisis.

Cavaco Silva stated that he was doing everything to limit the social consequences of the crisis, insisting that dialogue between the PSD and PS was important.

“The crisis will be felt for some time; we have to break a vicious cycle. We’re in recession and unemployment has risen dramatically. Our resistance will be seriously put to the test in 2012,” he added.

When asked about the possibility of the end of the Euro, the president said that that scenario would be “truly disastrous” because it would imply a return to protectionism.

“Europe would become a fragile bloc against China and the United States. Portugal wants to maintain the Euro, and there’s no doubt about that. It would be a terrible disaster if the Euro disappeared,” he stressed.

In order to avoid that, Cavaco Silva argues for the need for a “new attitude” in Europe and that didn’t mean just talking about “sanctions and cuts”.

There needed to be a strategy that favoured growth in Portugal and Europe and if there wasn’t, the burdens would be “unbearable”.

“The European states should not just talk about responsibility but also solidarity and I feel that this is missing in the European Council,” said the president.