Even as finance ministers from the 17 euro zone countries gathered in Brussels to consider the release of €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 €78 billion from the troika. The government is predicting a third straight year of recession in 2013, with unemployment reaching nearly 16 percent, and more than twice as many young people out of work.
“I know that it’s very hard for some people. Unemployment is high, especially among young people,” Ms. Merkel said. “Consequently, Germany in particular wants to support Portugal through professional training for young people.”
Traveling with Ms. Merkel was a business delegation from Germany that held talks with Portuguese executives to identify specific areas where improved cooperation could foster growth. The German business leaders praised Portugal’s efforts, but warned that more was needed before investors’ confidence could be won back.
“Portugal has so far fulfilled all its savings duties,” Paul Bauwens-Adenauer, of the German business forum DIHK, said in a statement. “The path of reforms it has started out on deserves recognition, but it must continue to be seriously implemented.”
In Greece, most members of the governing coalition voted for the budget, which calls for €9.4 billion in cuts to salaries, pensions and social benefits, raises the retirement age to 67 from 65 and imposes higher taxes. Addressing lawmakers before the vote, Prime Minister Antonis Samaras said the new cuts would be the last and he appealed to the troika to support his country.
The budget vote was regarded as a test of confidence in Greece’s shaky coalition after a vote last week on a €17 billion package of austerity measures and fiscal overhauls for the next four years.
“Greece has done its part,” Mr. Samaras said. “Now it’s the turn of the lenders.”
In Brussels, euro zone finance ministers were unlikely to sign off on a long-delayed tranche of aid for Greece ahead of a final report by the troika on reforms Athens agreed to make as a condition of receiving two bailout packages totaling €240 billion.
Greece is also wrestling with the troika over how best to make sustainable the country’s huge debt burden, estimated at 175 percent of gross domestic product this year and 189 percent for 2013.
Niki Kitsantonis reported from Athens.
Article source: http://www.nytimes.com/2012/11/13/business/global/merkel-vows-support-for-portugal.html?partner=rss&emc=rss