Merkel: Portugal meeting commitments

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AngelMerkel123 REUTERS A man walks past a graffiti depicting German Chancellor Angela Merkel handling Portuguese Prime Minister Passos Coelho and Portugal's Foreign Minister Paulo Portas as if they were string puppets, in Lisbon October 23, 2012. Merkel will hear a reassuring message when she visits Portugal on Monday -- a likeminded, center-right leader will tell her he believes deeply in the tough reforms his country is undertaking under a 78-billion-euro bailout.

German Chancellor Angela Merkel said on Sunday Portugal has fully met all the goals it set in its 78-billion-euro bailout, adding the Iberian country does not need new financial help.

“Portugal is meeting the commitments it has taken on very well,” Merkel told Portuguese broadcaster RTP, a day before making a trip to Lisbon.

When asked if Portugal needs a new bailout, as some economists have argued, Merkel said: “I don't have this view.”

Portugal's lenders, the European Union and IMF, have approved all reviews of the economy so far but they agreed this summer to relax Lisbon's budget goals after tax revenues fell short due to a deep recession.

The country entered its deepest economic slump since the 1970s this year, when the economy is expected to contract 3 percent. Unemployment is at record highs above 15 percent and is seen rising further in 2013.

Merkel said Portugal's reforms would take time but that at the end of the process they would pay off, pointing to reforms adopted by Germany which took many years to translate into economic gains.

Portugal's centre-right government is hoping to win renewed support from Europe's biggest creditor during Merkel's visit.

Prime Minister Pedro Passos Coelho has stressed that his country's only option is to fully meet the terms of its bailout in the hope of emulating the recovery of fellow bailout victim Ireland rather than Greece's crisis. - Reuters


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