Portugal calls German finance minister 'pyromaniac' for his austerity affection
According to Schaeuble, the country had been successful until socialists came to power in 2015, declaring they would "not respect what the former government had agreed."
Portugal's socialist leader was quick to respond.
"As everyone knows, the German finance minister is a pyromaniac who tries to present himself as a firefighter. His compatriots do not think like him,” Cesar told news radio TSF, referring to German businesses investing in the country.
"They understand the Portuguese economy has potential, that political and social stability is a factor that they value, and that Portugal is in a position to make progress with our policy," added Cesar.
The ruling socialist party has cut taxes for the poorer class and reduced austerity measures implemented by its predecessors in return for a €78 billion bailout during 2011-2014.
Last week, Lisbon said it will re-open some public services in rural areas that were shut down to save money.
“It is possible and necessary to continue to boost family incomes, through pensions, salaries and taxes,” said Prime Minister Antonio Costa in October.
Costa dismissed Schaeuble’s comments, saying he "pays attention mainly to Germans who know Portugal, and as a result, know what they are talking about."
"I usually only talk about what I know and I never talk about other countries about which I know nothing, based on prejudices," he added.
After posting the EU’s third-biggest budget deficit of 4.4 percent last year, Portugal sees the budget hole shrinking to 2.4 percent this year and 1.6 percent in 2017.
The government aims to curb the deficit by increasing taxes on alcohol and tobacco, high-value real estate, vehicles and vacation rentals as well as introducing a “sugar tax” on sodas.
Schaeuble is known for his hard-line views on austerity. During negotiations over Greece’s €86 billion bailout, the Greek Avgi (The Dawn) newspaper published a cartoon, depicting him in Nazi uniform, with the caption "we insist on soap from your fat," and "we are discussing fertilizer from your ashes." Berlin condemned the publication.