EU finance ministers Saturday urged Portugal to commit to structural reform and defended the region's austerity steps, as thousands of European workers gathered in Budapest to protest against spending cuts.
Finance ministers and central bankers from the 27-nation bloc held a second day of informal talks outside the Hungarian capital on their response to the euro zone debt crisis after Portugal Wednesday became the third euro zone country to ask for EU and IMF financial aid.
EU ministers said that in return for an estimated 80 billion euros in emergency loans over three years, Lisbon would have to commit to further structural reforms to bring down its budget deficit and debt in a sustainable way.
The rules are very clear. Whoever needs assistance by other European member states and member states of the euro zone, he has to deliver sustainable measures for reducing the deficits because the deficits are the reason why they need help, German Finance Minister Wolfgang Schaeuble told reporters.
The European Trade Union Confederation (ETUC) expects some 30,000 people from all over Europe to march in central Budapest later Saturday in protest against austerity policies imposed in most EU countries, which ETUC believes are not necessary.
Schaeuble said the protests were wrong and that austerity was needed to ensure sustainable economic growth.
I can understand, but I think it's wrong because what we are doing is to work for a sustainable framework for growth and for sustainable growth a stable currency is a pre-condition, and stable budgets are a pre-condition -- if we run too high deficits (we are not upholding) our responsibility to future generations, he said.
The ETUC said on its website that the austerity plans exerted pressure to reduce wages and interfered with the independence of collective bargaining.
These social regression measures are taken whilst scandalous bonuses continue to be paid, the ETUC said. The European trade unions are against these policy choices.
European Union leaders agreed last month that all EU countries would start consolidating their budgets this year as Europe seeks to reassure financial markets that its fiscal policies are sustainable and draw a line under the year-long debt crisis.
We know that the decisions that are being taken assume efforts and are difficult. But (these decisions) are necessary because we need to grow and we need to reduce our deficit to keep funding the welfare state, Spanish Economy Minister Elena Salgado told reporters.
So, we understand their position (of trade unions) but we would also like that they understand ours, she said.
(Reporting by Ecofin team, writing by Jan Strupczewski, editing by Susan Fenton)