By Stefan J. Bos, Chief International Correspondent reporting from Budapest
BUDAPEST, HUNGARY (BosNewsLife)– European Union finance ministers warned Portugal on Saturday, April 9, that it will have to introduce tough reforms, including austerity measures, if the country wants to receive massive rescue loans, but tens of thousands of people demonstrated against spending cuts.
Ministers and central bankers from the 27-nation EU met in the Royal Palace of the Hungarian town of Godollo, near Budapest, to discuss a response to the euro zone debt crisis.
Portugal has become the third domino within the eurozone to almost fall under the weight of debt after Greece and Ireland also needed billions of euros in financial assistance.
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EU ministers said Portugal could receive an estimated 80 billion euros, some 114 billion dollars, over three years, under strict conditions.
German Finance Minister Wolfgang Schäuble made clear that Lisbon would have to commit to bring down its budget deficit and debt. “Whoever needs assistance by other European member states and member states of the eurozone, he has to deliver sustainable methods for reducing the deficits,” he said adding that “The deficits are the reason why they need help…”
SPAIN NEXT?
Schäuble said he did not yet expect Spain to ask for assistance, despite concerns it may be next to require an international bailout. “I think Spain is in a good condition and the international markets are on the same judgment.”
The reforms the EU demands from Portugal are to include tough austerity measures. But as ministers gathered some 30,000 people from all over Europe marched Saturday in central Budapest in protest against spending cuts at a rally organized by the European Trade Union Confederation (ETUC).
The ETUC General Secretary John Monks told reporters they came to Budapest to send a clear message to the Europe. “Austerity, cutting on public expenditures, makes the recession worse,” he said. “We are showing opposition to workers paying the price for a crisis that was born in financial markets.”
Monks urged the EU to “Take some pressure of Ireland, Portugal and Greece. Work on growth proposals, not just how to restrict demand and pay.”
DEFICIT REDUCTION
Europe’s top financial officials made it clear that while they understood these concerns growth and deficit reduction were essential to ensure governments could keep funding the welfare state.
“A lot of things have been done, a lot of things have to be done now,” summarized European Central Bank President Jean-Claude Trichet the meeting. “This is no time for complacency in any respect.”
But in the streets of Budapest protesters said the measures proposed by the EU officials will make workers in Europe poorer and that a helping hand, not a punch, was needed. (BosNewsLife’s NEWS WATCH is a regular look at key news developments impacting the Church and/or compassionate professionals, especially in (former) Communist and other autocratic countries).
