Government refutes criticisms that it behaved “more German than Germany” over Greek debt extension negotiations

An increasingly-worn looking prime minister Pedro Passos Coelho has rejected as “absurd” the story doing the rounds in the Portuguese and international press today that Portugal – along with Spain – acted “more German than Germany” in Eurogroup discussions over Greece and its request for a four-month loan extension.

Equally adamant that Portugal had simply taken a “constructive position” in the crucial talks that eventually agreed to give Greece extra money depending on a list of reforms due to be presented in Brussels today was Portugal’s Finance Minister Maria Luis Albuquerque.

But no one appears to believe either of them.

The story gained traction after Greek “Bruce-Willis-look-alike” finance minister Yanis Varoufakis more or less admitted it himself.

Asked on camera whether Portugal and Spain had been among the countries opposed to a compromise with Greece, he said: “You are making it very hard for me now, as I promised to tell the truth. But at the very same time, there is something called good manners. The Portuguese and Spanish finance ministers are my colleagues. I recognise that they have their own political prerogatives, and it was clear from their position that they were motivated by those prerogatives. I respect that.

“It is also true that I need to maintain an excellent working relationship with my colleagues from Portugal and Spain, and therefore you will allow me to discontinue the answer (to this question) at this very point”.

The US Fortune website explains the dilemma faced by Portugal and indeed Spain. It has everything to do with both countries’ fears of contagion (see:

As economist James Galbraith told Fortune: “The camp strongly opposed to compromise includes Spain, Portugal and Finland. Their leaders are all facing elections with rising opposition. They are terrified that their opponents will take heart from the Greek position”.

Fortune adds: “Hence surviving in office means more than saving the Eurozone”.

But what would fragmentation of Europe mean? And would it involve Greece leaving the Euro, or Germany?

These are the questions not being aired as politicians simply throw party-political mud at each other.

As Passos Coelho and Albuquerque deny they had taken any kind of opposing position over Greece, leader writers have had a field day – still fired up by the prime minister’s remarks that the troika had not “sinned against the dignity of the Portuguese people” (see:

Former PJ inspector and mayor of Santarém Francisco Moita Flores wrote on Sunday: “The severity of suffering imposed on the population was so brutal, from the cuts in pensions to the reducing of schools, health and increasing of unemployment, that poverty went through the roof, emigration accelerated and large state businesses fell into the hands of foreigners. Banks, after all the scandals, are going the same way. Sovereign power has fallen into the hands of (Angela) Merkel, albeit under the cloak of the European Union.”

Socialist leader António Costa – now seeing his party’s popularity grow in the pre-election opinion polls – said over the weekend that any Portuguese would be “perplexed” to see its government seeking “to aggravate austerity for others”.
Talking as he left a conference of Socialist leaders in Madrid, he used the word “absurd” to describe the government’s stance over Greece.

“Any Portuguese would be perplexed when they saw the news at the end of the Eurogroup (meeting) and realised that the Portuguese government wanted to increase the agony of austerity for others, instead of wanting the Portuguese and the Portuguese economy to benefit from any flexibility”.

Meantime an opinion poll taken by CM/ Aximage has revealed that almost half the Portuguese people questioned applaud the victory of anti-austerity party Syriza in Greece.

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