It is a great honour and pleasure to have this opportunity to address the IEA Congress and its distinguished participants.

Portugal cordially welcomes you and I hope that the intense week of work and discussions ahead will be a memorable experience for you all.

For my part, I look forward to receive a full account of your work and for that I can count on the competence and diligence of Professor António Simões Lopes.

Your Congress takes place at a time of enormous uncertainty in the economies and societies of the entire world.

If recent events show how complex our world is and why human nature makes it much easier for economists to explain events past than to predict or influence the future, they also help in the process of re-thinking the role of economics and economists.

As always, the growth and prosperity of large areas of the developed world during the last few years have generated their own breed of myths and free riders, illusions of instant success and the overruling of established economic wisdom.

In the recent developments of financial markets, common sense - even before economic sense - warned over "bubbles" and other illusions. But, if anything, the vanishing myths and the ensuing card deck of corporate malpractice cases have helped to show us how it is necessary, for the public good, to re-design and reinforce many regulatory mechanisms and to put back the people and human needs at the centre-stage of policy making.

The extraordinary technological progress of the last few decades has created enormous challenges to policy-makers concerned with the functioning of markets and the flow of information. Economic regulation has to be much more agile and selective and to bear in mind that financial markets do not create wealth but can have dramatic effects in its redistribution, at an unprecedented scale.

The social dimensions of economic growth and the current debate over the sustainability of development call our attention to the formidable tasks of policy-makers in designing models of greater social cohesion, and I know that you will also discuss these themes.

There is also certainly much to be clarified in the discussions around globalisation and competitiveness, well beyond the narrow and simplistic assumptions of current debates, under which national economies (and societies) would be, and should be, managed as if they were corporations and businesses in the global marketplace. The determinants of productivity - infrastructures, education, research - and the policy choices about taxing and spending within the context of the functions of the State are not single-axis or unidimensional realities and cannot be discussed without reference to the goals and preferences of citizens in democratic societies.

On the other hand, we should keep in mind that the vast majority of the world population still suffers from very low standards of living, with basic health, nutrition and shelter needs unfulfilled. The trend towards a more integrated and globalised world cannot and ought not to proceed without renewed efforts to close the gap between rich and poor - which, in the end, also makes economic sense.

Economics has developed itself into an extraordinary and powerful area of knowledge with recourse to methods and instruments that shed light into the explanation of the inner-workings of human societies. But these societies are very complex entities with many economic but also non-economic objectives, and with a rich social diversity. To recognise the resulting inescapable trade-offs is inherent to the good economists' thinking and can help enormously in educating policy-makers, political leaders and citizens.

The European themes, and appropriately so, will be at the heart of many of the discussions of your Congress. Here, too, I am sure that you will evaluate lessons learned from the extraordinary saga of the process of European integration, explaining and measuring its effects and discussing its complexities and difficulties.

Europe is an immense and diverse mosaic of cultures and historical and social realities that has made the formidable and challenging leap from conflict to integration in one generation. It was done through a complex process that is not always straightforward and where higher civilizational and societal goals have conditioned the outcomes of free competition, but without jeopardising the main lessons of economic science.

As this process consolidates - and I don't dare to ask how many of you would, five or ten years ago, bet on the existence of the Euro… - and moves east, new and formidable challenges face governments, institutions, companies and individuals. It can only be desired that economists will play their part in describing and explaining the realities and mechanisms at work, and thus help in clarifying the political choices that informed citizens will continue to be called to make.

In closing these brief remarks, I know that you will put your knowledge and thinking forward, exchanging different views with clarity and not letting your thoughts to be invoked in vain!