German Chancellor Merkel makes her first state visit to Portugal since the start of the debt crisis. Activists have called for protests but the wrath of the Portuguese is aimed primarily against their own government.
Rossio Square, in the heart of Lisbon's Old Town, has been a meeting place for centuries. It has seen the execution of alleged heretics in the Middle Ages, unions organizing their demonstrations and, a year ago, the protest movement of the "indignados", or "indignants", that camped here for days.
A large black cloth hangs over the statue of Portugal's former king Pedro IV, fluttering in the autumn breeze. A group of activists has called on the Portuguese to drape their monuments, balconies and building facades in black.
"Merkel is a symbol of all the political mistakes that have affected our country," said Joao Camargo, an activist who studied economics at the London School of Economics. "Of course, debt is a big problem for Portugal and many European countries. But Angela Merkel's policies are not only a threat to Portugal, Spain and Greece, but for all of Europe."
The chancellor's schedule includes meetings with President Anibal Cavaco Silva and Prime Minister Pedro Passos Coelho as well as talks with Portuguese and German companies in the district of Belem, in Lisbon.
Traveling with Merkel are some 100 representatives of German businesses. The message is clear: Germany wants to help get the Portuguese economy, which has been stuck in a deep recession since late 2011, back up and running with targeted cooperation projects.
Strong criticism for austerity plan
A group of protest movements and Portugal's biggest umbrella union, the CGTP, have called for mass demonstrations to greet the chancellor. But the anger of many Portuguese is aimed primarily against their own Conservative government.
Coelho's plan for the 2013 budget, already submitted to Parliament, proposes drastic austerity measures that an overwhelming majority of Portuguese analysts and economic experts have warned against. Economist Pedro Lains, of the Lisbon-based Institute of Social Sciences (ICS), has no doubt that the Portuguese government intends to transform the country into a second Greece.
"The real question is not whether or not we need to save, but how much. This excessive austerity program will have serious consequences for Europe: the economies in weaker countries are becoming more unstable and vulnerable, and they will find it difficult to remain in the EU economic zone. In addition, the political consequences are disastrous, as anti-European sentiment is on the rise in these countries."
Model country: Portugal?
In recent months, Portugal has repeatedly been cited as a prime example that a hard austerity program can be successfully implemented in Southern Europe. But this ideal image has developed deep cracks: due to the ongoing severe economic crisis, tax revenues have fallen significantly, rising unemployment has lead to increased social spending and reforms in key areas, such as public administration, are faltering.
The troika of lenders, made up of the European Union, the International Monetary Fund and the European Central Bank, have given the government one more year to reduce its deficit to 3 percent by 2014. But more and more voices are calling for a renegotiation of the reform and austerity program. The Economic and Social Council, run by a former Minister of Social Affairs with strong ties to the current government, has requested a reduction in the interest rates that Portugal is paying for the troika's 78-billion-euro ($99 billion) aid package.
Many Portuguese are critical of the close relationship between the Portuguese government and Merkel. Coelho's supposedly submissive behavior when dealing with the chancellor is a popular subject of graffiti and protest signs.
At a recent demonstration, Sofia Lima, a 32-year-doctor, was holding a sign written in somewhat awkward German: "Stop stealing from workers and the state."
"If our government does not listen to us because we speak in Portuguese, then perhaps it is better to use the language that is currently determining the political course," said Lima.
The Eurozone insists Greece's 'no' vote in the referendum has made negotiations about further aid for Greece more difficult. But rhetoric alleging a 'no' vote would also mean 'no' to Europe appears scaled down.
The European Union and Greece must do everything they can to reconcile their differences. Athens needs Brussels now more than ever, writes former Greek President Karolos Papoulias.
The German media may still blame the Greek government, rather than their chancellor, for the euro crisis. But the referendum has put Angela Merkel under pressure to be more proactive, and exposed her shortcomings.
The controversial "San Fermin" festival has kicked off in the northern Spanish city of Pamplona. For eight days bulls are driven through the old town, inevitably leading to serious injuries each year.