* Says Portugal has to show can solve its problems
* Rally in Lisbon against austerity
LISBON, Nov 12 (Reuters) - The European Central Bank should not print money to pay the debts of countries that have failed to keep budget discipline, Portuguese Prime Minister Pedro Passos Coelho said on Saturday, assuring that his country can put its finances in order.
“If the ECB had to solve the problems of undisciplined countries, printing more euros, this would be, purely and simply, a terrible signal to everyone,” Passos Coelho said in televised remarks.
Portugal earlier this year became the third euro zone country after Greece and Ireland to get a bailout. It is now enacting painful and unpopular austerity measures to meet the targets of its 78-billion euro EU/IMF bailout.
“We have to demonstrate confidence, show that we can put our finances in order, and this cannot be done by saying: ‘I don’t want to pay, the ECB is going to pay’. I cannot embark on this simplistic talk that ECB has to pay Portugal’s debts,” he said.
The ECB has been buying bonds of struggling euro zone governments on and off for more than a year but many economists suspect the crisis can now only be solved by broader and more aggressive action involving the bank — something that is firmly opposed by Germany.
Earlier, Portuguese President Anibal Cavaco Silva, who has a largely ceremonial role, was quoted as saying during a visit to the United States that “at this stage, there is a clear solution (to Europe’s sovereign debt problems) - the European Central Bank”.
Passos Coelho also said it was impossible for the government to accept the opposition’s proposals to avoid scrapping bonus payments for civil servants in next year’s budget as this would have a heavy impact on the state’s strained finances, but it remained open to a dialogue on measures if they have a neutral net impact on the deficit.
Parliament, where the government has a solid majority, on Friday approved the 2012 budget bill in its first reading . Under the terms of the bailout, Portugal has to cut next year’s deficit to 4.5 percent of gross domestic product from this year’s projected 5.9 percent.
The budget includes spending cuts, including civil servants’ pay, tax hikes and other measures that have upset many Portuguese.
Thousands of civil servants, including police and retired military, marched in Lisbon on Saturday in protest against austerity, while the country’s two main unions have called a general strike on Nov. 24.