Germany’s Schaeuble presses Portugal to stick to fiscal commitments
BY GERNOT HELLER AND ANDREI KHALIP
German Finance Minister Wolfgang Schaeuble pressed Portugal on Wednesday to stick to its European fiscal targets and said that if it were to apply for a new aid programme the terms would be harsh.
Portugal’s left-leaning government has set out to reverse its predecessor’s austerity policies, aiming to grow its way out of trouble by boosting demand and set an example for other post-bailout euro zone countries.
“Portugal would be making a big mistake if it does not stick to its commitments,” Schaeuble told a news conference in Berlin.
“It would have to apply for a new programme, which it would get. But the terms would be severe and it is not in Portugal’s interests,” he added.
Wolfgang Schäuble to Portugal: Listen to EU warnings
By IVO OLIVEIRA
Portugal should heed European Union warnings about its financial stability, German Finance Minister Wolfgang Schäuble said Monday, as fears grow that the country could need another bailout.
“Portugal must listen to the European Union warnings with regard to public policies,” Schäuble said on his way into a meeting of the Eurogroup of eurozone finance ministers in Brussels.
His advice comes as the German government and the European Commission fear that Lisbon is edging perilously close to needing another rescue package from the EU, Der Spiegel reported Friday.
Portugal one step closer to requesting EU bailout
Germany has said it will help finance a Portuguese bailout as consensus builds that Portugal will be the third eurozone country to seek a loan from the European Union and the International Monetary Fund.
German Finance Minister Wolfgang Schaeuble signaled readiness to support Portugal if it faces difficulty in funding itself in financial markets, although he said it is not in a state of emergency, Japan’s Nikkei business daily reported.
Germany’s AAA credit rating has shouldered the greatest burden of EU bailouts and its government has recently tried to lay down stricter conditions attached to loans provided by the European Financial Stability Facility (EFSF), such as lower corporation tax and higher pension ages.
Expectations for a Portuguese bailout peaked today as bond yields rose to and stayed at 7% for 10 straight days, mimicking the same high yields that led to a Greek and Irish bailout in 2010.
A senior eurozone source alleges that the situation signals a Portugese bailout by April at the latest.