strong anti - euro movement in portugal, there is a growing current of opinion which says, : “ ok, we made all these political and economic efforts but are still paying high interest rates. it is very difficult to see where all this will end so perhaps it would be easier to leave the euro ”. a – sure, i understand. but i ’ m not sure it would be easier. the omt was an instrument created to address what we call “ the break - up fear. ” q – do you think the break - up fear has disappeared? a – yes, absolutely. i think the break - up fear has disappeared, which is a very positive result. what is now important is the credibility of reforms. i think portugal is on the right track. of course the risk premium remains high, because the risk is still high. but i think that this domestic adjustment must – to the extent possible – continue in a balanced way. bis central bankers ’ speeches q – when we look at europe – and we will have european elections in may – we can easily see that some political parties in greece, italy or even the uk or germany and the netherlands – not in portugal, but... – there are anti - euro politicians who are doing well in the polls. a – what we learned from the crisis is that we have an unfinished monetary union. a monetary union that seemed to work well in good times, but in harsh times we saw that the institutional mechanisms didn ’ t work well. there was no crisis preparation, no good crisis management, no joint supervision – many things were not in place before the crisis. that ’ s what we ’ re doing now. so the solution, if i may say so, is not less europe – this would have drastic consequences on the domestic market – but the opposite : what we need is more europe. the crisis showed that what failed were the unfinished institutions within the monetary union. that ’ s what we ’ re building. the banking union is an example. for portugal in particular, i think that it is very good news that we are talking about the end of the current adjustment programme, with or without a precautionary programme. the key is to convey this message of credibility that portuguese politicians – not just the government – continue to support reform. i know it ’ s not easy and i know that the european elections may have to deal with anti - european movements. nevertheless, i think that the vast majority of european parties have come to

peter praet : interview in expresso interview with mr peter praet, member of the executive board of the european central bank, in expresso, conducted by mr joao silvestre and mr ricardo costa and published on 18 february 2014. * * * q – the main discussion today is whether portugal should seek a “ clean ” exit or opt for a precautionary programme. what do you think would be better? a – the eleventh review of the assistance programme began this week and will carry out its regular evaluation. as far as we know, the results have been impressive. while a contraction in gdp was underestimated at the beginning of the programme, we are currently surprised on the upside. but we need to wait for the outcome of the technical discussions at the eleventh review. i cannot anticipate any decision. q – but we are in february and the troika will leave portugal in may. a – we have a few months. there are pros and cons to the different options. what is important is that the government can convince markets and other euro area countries and the european union that the programme will continue without hesitation. growth in portugal has started to become sustainable, which is new. the main question is whether there will be any doubts about the continuity of the reform programme. the precautionary programme would certainly help to dissipate doubts. in a clean exit scenario, the government should make a credible commitment to continuing the reform process. ultimately, what matters is credibility. but it is the government ’ s decision. q – you mean that the ecb does not need to have a defined position? a – my point is that for portugal, independently of the options available, what is essential is being able to convince the markets and euro area partners that reforms will continue to be implemented. i think the government is right to wait a little longer before deciding on the post - programme options. everything depends on the credibility of the reform process. imbalances created over many years cannot be resolved in three years. q – is there a risk that, without the precautionary programme, portugal would not proceed with reforms? a – there is obviously conditionality associated with the precautionary programme. q – and there is not with a clean exit. that ’ s the problem. a – a clean exit has no formal conditionality attached to it. for the government, the eccl has a political price, due to conditionality, but