Merkel, in anxious Lisbon, hails austerity drive

Mon Nov 12, 2012 2:25pm EST
 

By Axel Bugge and Daniel Alvarenga

LISBON (Reuters) - Angela Merkel faced scattered protests on Monday in Lisbon, where she delivered German endorsement of a government austerity drive designed to honor a bailout loan but which critics fear may only deepen the slump.

"The situation is difficult but what Portugal is doing, it is for the future," the chancellor told a joint news conference with Prime Minister Pedro Passos Coelho, who has seen popular patience and political consensus begin to fray in recent weeks.

"This visit is an opportunity to know the country better and to bring hope."

Speaking for both himself and his fellow conservative Merkel, the Portuguese premier dismissed criticism such as that in a leading business newspaper which accused the chancellor of pursuing "Frankenstein experiments" with Portugal's economy; Passos Coelho insisted: "We think this is the only way forward."

Though at least one of the few hundred demonstrators in Lisbon carried a placard showing Merkel with a Hitler moustache and the slogan "Not again!", there was little violence and much less anti-German fury than when she visited Athens a month ago.

About 300 hundred protesters burned an effigy of Merkel outside a German-Portuguese business conference, holding up a billboard with the words "Die Merkel" on it and the flags of Spain, Portugal, Greece and Italy in the background.

Passos Coelho is anxious to mark out Portugal's differences from troubled debtor Greece. He is clearly pleased Merkel and German business leaders have hailed Portugal as model for the kind of deficit cuts and economic reforms they see as necessary to restore investment, revive growth and repay creditors.

While encouraging the Lisbon government to stick with its program in the face of opposition, Merkel may also hope her visit can reassure Germans, who will vote next year, that the billions they grudgingly lent are being well used.   Continued...

 
Police officers clash with protesters during a demonstration against German Chancellor Angela Merkel in central Lisbon November 12, 2012. Merkel faced scattered protests on Monday in Lisbon, where she delivered German endorsement of a government austerity drive designed to honour a bailout loan but which critics fear may only deepen the slump. REUTERS/Hugo Correia