Portuguese Prime Minister Pedro Passos Coelho joined his counterparts from Sweden and Austria last night in Berlin for “informal” talks on the EU crisis with German Chancellor Angela Merkel on a four-way dinner meeting at Meseberg Palace about the union’s future.

The union’s deficit and debt crises and other issues, like implementation of the planned increase of budgetary discipline, were on the agenda for the three-hour dinner. According to the Portuguese news agency Lusa, the informal meeting was held at Meseberg Palace, the official German state guesthouse, ending without any statement to journalists. The informal meeting focused mainly on the preparation for the European Council scheduled for March in Brussels, where the new budget pact –  a tough pact on budgetary discipline, which Germany and France want to see approved then - should be definitively approved.

An EU source told news agency Lusa that Merkel and Passos Coelho were in general agreement on how to deal with eurozone debts and on bailout mechanisms for weaker members, including Portugal.

The major difference separating Lisbon and Berlin, the official added then, was on the role of EU institutions in overseeing the budget pact in March.

Berlin wants a stronger role for the European Court of Justice, while Lisbon backs a greater weight for the European Commission, which is currently chaired by former Portuguese prime minister José Manuel Durão Barroso.

Gaspar: “Turning point” ahead with measures, says minister of finance

As the European answer to the crisis unfolded between the eurozone leaders behind the curtains, the Portuguese Minister of Finance Vítor Gaspar shed a brighter light over the Portuguese perspectives, saying the country “could be approaching a turning point“.

According to news agency Lusa, which quoted a written statement after a closed door meeting between troika officials, businessmen representatives and economic and financial specialists, Gaspar said that “the uncertainty about the sucess of the Portuguese adjustment was substantially reduced” after yesterday’s auction of 11-month T-bills for “the first time since april 2011″.

The positive results of the debt auction were mainly due to the “the high demand in all maturities” and the “significant participation” of international investors, said the minister.

However, the online edition of Expresso says that markets seem immune to Gaspar’s optimism: quoting data from Bloomberg, the Portuguese yields of the 10-year debt hit 14.58% on the secondary market on Thursday’s close, a record high in the euro era, from 14.54% on Wednesday’s session end. The newspaper adds that the Portuguese risk of default over sovereign debt rose to 66.62% Thursday, according to data from CMA DataVision, as the Greek crisis and the bumpy negotiations between the private debt holders and the Greek government unfold to alleviate the country’s debt burden.

with PDV

(Photography: Thomas Peter/Pool/EPA/Lusa)