By Gernot Heller and Andrei Khalip

BERLIN/LISBON (Reuters) - German Finance Minister Wolfgang Schaeuble pressed Portugal on Wednesday to stick to its European fiscal targets and said that if it were to apply for a new aid program the terms would be harsh.

Portugal's left-leaning government has set out to reverse its predecessor's austerity policies, aiming to grow its way out of trouble by boosting demand and set an example for other post-bailout euro zone countries.

"Portugal would be making a big mistake if it does not stick to its commitments," Schaeuble told a news conference in Berlin.

"It would have to apply for a new program, which it would get. But the terms would be severe and it is not in Portugal's interests," he added.

Pressed by journalists, Schaeuble stressed that Portugal would not need a new aid program if it sticks to EU rules.

"They (the Portuguese) don't want it (a new package) and they don't need it if they stick to the European rules," he said.

    Portugal insists it will meet this year's budget deficit target of 2.2 percent, which is half last year's gap, and that no new measures will be necessary after solid budget execution in the first five months of the year.

The Portuguese finance ministry said Lisbon was not considering asking for any new bailouts and was working to meet its EU targets and to cut its budget deficit.

"Regarding the remarks made by Wolfgang Schaeuble, although he himself immediately corrected them, the finance ministry clarifies that no new aid program is being considered for Portugal," it said in a statement.

"The ministry reiterates the government's efforts to meet all the commitments to Europe, in parliament and before the Portuguese."

Some Portuguese politicians were quick to criticize Schaeuble's comments.

"It is for this reason and others that, unfortunately, there are more and more European citizens raising their voices against this persistent and senseless arrogance," said Carlos Cesar, president of the ruling Socialist party.

(Writing by Madeline Chambers and Paul Carrel; Editing by Gareth Jones)