–Adds Bundestag Vote To Story Sent At 08:42 GMT

BERLIN (MNI) – Portugal’s austerity and structural reform package
to overcome its public debt crisis is “ambitious but do-able,” German
Finance Minister Wolfgang Schaeuble said Thursday.

Thus, “it is justifiable and correct” that the EU and the IMF
provide Lisbon E78 billion in financial aid, Schaeuble said in a speech
in the Bundestag.

Subsequently, the lower house approved a motion saying that it
supports the aid measures for Portugal.

Parliamentary support was never endangered, given that the
center-left Social Democrats, the largest opposition party, and the
smaller opposition ecological Greens announced that they also supported
the Portugal aid package. The parliamentary budget committee had
approved the aid Wednesday evening.

Schaeuble argued that Portugal’s problems showed “how serious we
have to take the danger of contagion effects in the Eurozone.” He noted
that Portugal has less debt than some other Eurozone states and does not
have an oversized banking sector such as Ireland. “And still, a dramatic
worsening of [Portuguese] refinancing conditions has occurred.”

With regard to Greece, which is expected to have trouble making
some E30 billion worth of debt payments next year, Schaeuble said no
decisions could be made before the next joint review of the current
Greek programme by the EU, IMF and ECB, scheduled to be released in
June.

If the report shows that Athens cannot return to financial markets
next year “then one has to discuss which additional measures Greece can
undertake itself to solve the problem,” Schaeuble stressed. “We will not
agree on additional [aid] measures without clear conditions.”

Schaeuble also said investors cannot expect only to profit from
their investments while saddling taxpayers with all the risks. Private
creditors must shoulder some of the burden in a way that does not
endanger the confidence of financial markets, he said.

“We will pay attention to this in the case of Greece and also the
[future] European Stability Mechanism,” he said.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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