EU finance ministers on Saturday urged Portugal to commit to reforms and defended the region's austerity steps as tens of thousands of European workers protested in Budapest 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 on 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.
Some 30,000 people from all over Europe marched in central Budapest in protest against austerity measures at a rally organized by the European Trade Union Confederation (ETUC).
Demonstrators blew horns and chanted slogans, one of which read: We want jobs! Create, do not abolish (jobs)!
One of the demonstrators, Christian Guldentops from CNE, the Christian Belgian trade union, told Reuters: We are coming here to say no to the plan of Angela Merkel, Nicolas Sarkozy, and to the EU 's austerity plan.
John Monks, General Secretary of ETUC, said Europe should not panic over high debts and said the cost of paying back the debt for countries like Greece and Ireland was too high.
If we're all in it together, then what are the banks, what are the financial markets, what are the rich and comfortable doing? We want the broadest shoulders to bear the heaviest burden, not for the whole weight of the adjustment to fall on the poor, the low paid, the unemployed ...
FUTURE GROWTH IN FOCUS
European Union leaders agreed last month that all EU countries would start consolidating 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.
Olli Rehn, the EU's Economic and Monetary Affairs Commissioner told a news conference on Saturday that reducing the debt burden was essential for future economic growth.
In many countries we have unsustainable debt burdens and therefore it is important also for the sake of economic growth and economic dynamism to ensure that this consolidation can be achieved with full determination and concrete results, he said.
Spanish Economy Minister Elena Salgado said growth and deficit reduction were essential to ensure governments could keep funding the welfare state.
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, Salgado told reporters.
So, we understand their position (of trade unions) but we would also like that they understand ours, she said.
But in the streets of Budapest protesters said the measures devised by EU leaders would make workers in Europe poorer instead of leading economies out of the crisis.
These measures will take us back to the 1930s. They will cut masses of people out of work -- the rich will become richer, the poor will become poorer, said Fritz Keller from the Austrian trade unions.
(Reporting by Ecofin team, writing by Jan Strupczewski, editing by Susan Fenton)