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Merkel 'regrets' rejection of Portugal austerity plan

The Local · 24 Mar 2011, 15:58

Published: 24 Mar 2011 15:58 GMT+01:00

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"Portugal has presented a very courageous programme ... it was appropriate. I deeply regret that a majority was not found in parliament (on Wednesday)," Merkel told reporters.

"It is very, very important that all those who speak in Portugal's name state clearly their attachment to the objectives of this programme," she said ahead of a summit of EU leaders rocked by Portugal's political and debt crisis.

"This is not only important for Portugal, but also for all of Europe and in particular for members of the eurozone," she said.

All five opposition parties voted Wednesday against the government's fourth cost-cutting plan in a year, increasing the chances that Portugal will follow Greece and Ireland in requiring a bailout worth billions of euros. The rejection prompted Prime Minister Jose Socrates to resign.

EU leaders plan to replace an emergency bailout fund in 2013 with a permanent war chest underpinned by stringent budgetary discipline and closer cooperation in economic policy among the 17 nations sharing the euro.

Merkel also confirmed that she would press at the summit for Berlin's contribution to the €80-billion ($113-billion) cash element of the new €700-billion permanent bailout fund from 2013 to be staggered over five years.

Originally, Germany was to provide half of its €22-billion portion in 2013 and the rest in three installments over three years, but now Merkel wants to pay five chunks of €4.4 billion over five years.

"In the talks I intend to press for the contributions being made over five years," she said.

This has drawn criticism, for example from Jean-Claude Juncker, Luxembourg's prime minister and head of the Eurogroup, who said that delaying payments could rob the rescue fund of its top AAA credit rating. The remainder of the rescue fund consists of loan guarantees.

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"What we are doing with this package is drawing the lessons from the debt crisis," she said.

"The basic principle for me ... is that no country in Europe will be abandoned or left to fall, because Europe only succeeds when we are one."

AFP/The Local/mry

The Local (news@thelocal.de)

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Your comments about this article

17:04 March 24, 2011 by derExDeutsche
Albert Einstein once said "The definition of insanity is doing the same thing over and over again and expecting different results".

In order to succeed, Dr. Merkel, one first needs to know what it is to fail. You, however, are intent on enabling the same behaviour that brought us here in the first place.

Well, I'm just glad the Germans will be paying for all this.

Now get back to WORK, you Lazy Krauts!
18:10 March 24, 2011 by amaticc
And where is a news about large protest in Brussels before this EU meeting?

"The European Commission's annual examination of growth as well as the competitiveness pact launched by German Chancellor Angela Merkel and French President Nicolas Sarkozy will drag wages and social rights down to dangerous levels," Belgium's CES union said in a statement."
18:28 March 24, 2011 by lecturenotes2009
and with this Euro problem arises, can you imagine if we would agree to support attack on Libya?

for sure, another taxpayers' money are WASTED here in a big big big amount...
18:53 March 24, 2011 by DinhoPilot
Well gotta work, work, work people.
23:43 March 24, 2011 by cobalisk

This has nothing to do with being lazy or not being lazy. How about ppl stop always reading Bild and actually explore the issues.

The issue in Portugal is bank debt brought about by lax borrowing rules in many countries in the western world in particular the United States which is having its own crises, both at the federal level but also on a state by state business.

In the US you do not hear of people arguing to toss states out of the union, so why should ppl be claiming the same nonsense here?

Of course there must be a fund and countries pay into it and countries take out of it, the purpose of the fund is to prevent a collapse of a very effective union. Sure its sucks but it beats the alternative of turning the clock in Europe back 50 years.
07:33 March 25, 2011 by derExDeutsche

WHat does Portugal produce, cobalisk? Bild? are you an idiot? Lax borrowing debt? United States? Are you suggesting to 'prevent a collapse of a very effective union.'

we create more debt? that can't be paid back?

The United States is 1 country. Europe is not. In Europe every country votes for their own representation, to decide if the money being sent to them by Germany is enough. SO far 1 thing is for certain... Germany is not sending enough to anybody.....

so... the joke is..... you are lazy... when i fact, you are the ONLY ONE WORKING.
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