Angela Merkel flies in to bolster Portugal’s austerity cuts

German Chancellor Angela Merkel was today flying to Lisbon to personally back the Portuguese austerity programme.

Portugal, suffering its deepest slump since the Seventies, is struggling to reduce its debt under the terms of a £62 billion German-backed European Union bailout.

In her first direct meeting with Portuguese ministers since she took office seven years ago, Mrs Merkel will see for herself how eurozone rescue funds are being put to use.

She told a Portuguese broadcaster: “Portugal is meeting the commitments it has assumed very well.” Her visit was expected to be met by public protests over the spending cuts and tax rises that are part of the programme, and police reinforcements were drafted in for the meetings.

A government proposal to raise social security contributions recently prompted Portugal’s biggest demonstrations for years. However, today’s protests were not anticipated to be as serious as the violence seen in the streets of Athens when Mrs Merkel visited a month ago to talk about Greece’s austerity measures.

Portuguese prime minister Pedro Passos Coelho is urging further cuts, saying his country’s debt crisis is due to overspending by previous governments and the only option now is to keep to budget goals set under the bailout deal. “We would be living through far, far greater difficulties if our European partners, including Germany, had not helped with the loans we have received,” he said.

In Athens yesterday, 10,000 people protested outside parliament after Greek MPs approved new spending cuts in next year’s budget — a pre-condition for Greece to be granted a £25 billion EU/International Monetary Fund loan to stave off bankruptcy.

Eurozone finance ministers are due to discuss the Greek crisis at a meeting in Brussels. Greek prime minister Antonis Samaras has warned that without the new loan, Athens will start running out of money in days.