Newspaper article International Herald Tribune

Merkel Vows Support for Portugal's Reform Effort ; Chancellor Seeks to Show European Partners That Austerity Will Pay Off

Newspaper article International Herald Tribune

Merkel Vows Support for Portugal's Reform Effort ; Chancellor Seeks to Show European Partners That Austerity Will Pay Off

Article excerpt

The German chancellor sought to reassure a European partner that fiscal overhauls would be rewarded with long-term growth and stability.

Chancellor Angela Merkel of Germany vowed continued support for Portugal on Monday, seeking to reassure a European partner that fiscal overhauls would be rewarded with long-term growth and stability.

Even as finance ministers from the 17 euro zone countries gathered in Brussels to consider the release of EUR 31.5 billion, or $40.1 billion, in aid for Greece, Ms. Merkel expressed confidence that the troika of international lenders that has bailed out both Greece and Portugal would issue a favorable report on Lisbon's efforts at reforming its economy.

As Ms. Merkel arrived in Lisbon for a six-hour visit with Portuguese leaders, she was greeted by statues shrouded in black mourning cloth and shouts of "Merkel out!" from hundreds of protesters, who were largely outnumbered by the police. She received an even harsher reception when she visited Athens last month.

Earlier Monday, the Greek government pushed through Parliament a tough budget for 2013 with a raft of spending cuts and tax increases, moving the country closer to unlocking the next installment of aid from the troika of international lenders: the European Commission, the European Central Bank and the International Monetary Fund.

More than any other public figure, the German chancellor has been made the scapegoat of Europeans battered by the three-year-old sovereign debt crisis and the austerity measures governments have imposed to combat it. But she responded to Portuguese protesters with sympathy and optimism, similar to her soothing words to 40,000 angry demonstrators last month in Greece.

"I feel a great sense of determination here in Portugal to overcome this difficult phase," Ms. Merkel said at a news conference in Lisbon, carried live on German television, after holding talks with Prime Minister Pedro Passos Coelho.

Public anger in Portugal, for years regarded as Europe's model bailout recipient, has swelled in recent weeks as Mr. Coelho's center-right coalition government has raised taxes and reduced spending in return for a bailout of EUR 78 billion from the troika. …

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