A luke-warm welcome

In addition to her talks with Portuguese government officials, Merkel is expected to give a speech to German and Portuguese business leaders on Monday.

Although Merkel made an unexpected trip to Portugal in April 2010 when her plane from the US was diverted to Lisbon because of the ash cloud from a volcanic eruption in Iceland, it is her first official visit to the country.

Some Portuguese, hit hard by the cuts the government was forced to make in order to receive a bailout under the European, draped statues in Lisbon with black sashes as a sign of mourning because of the austerity measures.

Merkel's 'welcome'

Protests were planned to coincide with Merkel's arrival, and one newspaper ran a headline Monday morning that said Merkel had made an "economic Frankenstein" of Portugal. However, Monday's demonstrations are not expected to escalate to the level they did when Merkel visited Athens, where riot police had to be called to deal with out-of-hand crowds.

Unemployment in Portugal has increased since the cuts. Poverty has also risen, leading some in Portugal to place the blame at Merkel's feet.

A day before leaving for Lisbon, an interview with Merkel aired on Portuguese television station RTP, where she praised Portugal for implementing the saving measures "well."

She also conceded that the cuts had been painful for the country, but added that she "was not exactly the one to invent them." Merkel said she does not think Portugal will require a second bailout.

Coelho has defended the decision to cut spending, saying the debt crisis in Portugal is from overspending by past governments.

"Today, we would be living through far, far greater difficulties if our European partners, including Germany, had not helped with the loans we have received," he said last week.

mz/kms (dpa, AFP, Reuters)