Germany says Portugal’s economic reforms ‘encouraging’

German Finance Minister Wolfgang Schaeuble said on Wednesday that the results of Portugal’s crisis-fighting economic reforms were “encouraging” after talks with his Portuguese counterpart.

“The Portuguese economic adjustment is proving to be a demanding and painful process, calling for heavy sacrifices from the people, but the results are encouraging,” a joint statement said.

The reform programme is also taking place “faster than expected”, it noted after Schaeuble’s talks with Portuguese Finance Minister Vitor Gaspar.

“Competitiveness is improving, government expenditures are now under control and the structural budget deficit has declined significantly,” the statement said.

Germany reaffirmed its confidence in Portugal and “strongly encourages the Portuguese authorities to continue addressing challenges and implementing policy conditionality”, it said.

Portugal, which is under an EU-IMF bailout programme, passed a key test of investor confidence on Wednesday with a successful bond auction, raising 2.0 billion euros ($2.6 billion) at sharply lower interest rates.

It was the first auction since the country won an extra year from its lenders to bring its public deficit down to three percent of output.