By Axel Bugge and Andrei Khalip
LISBON (Reuters) - Eurogroup chairman Jeroen Dijsselbloem rejected calls for his resignation led by Portugal's prime minister on Wednesday, but said he regretted comments suggesting southern European countries had squandered their money on "booze and women."
Prime Minister Antonio Costa described Dijsselbloem's remarks as "racist, xenophobic and sexist" and said Europe would lose credibility if the Dutchman did not step down.
The spat has reawakened simmering anger in southern Europe over the harsh austerity some of their countries went through under bailouts during the euro zone debt crisis, pitting creditor nations in the north against the poorer indebted south.
"Europe will only be credible as a common project on the day when Mr. Dijsselbloem stops being head of the Eurogroup and apologizes clearly to all the countries and peoples that were profoundly offended by his remarks," Costa said.
Former Italian prime minister Matteo Renzi and a Spanish lawmaker in the European Parliament, Esteban Gonzalez Pons, echoed Costa. The Spanish legislator called the remarks "a racist and male-chauvinist insult to the southern countries, and their women".
Renzi said: "If he wants to offend Italy he should do it at the sports bar under his house, not in his institutional role."
In the weekend interview, Dijsselbloem said that wealthier northern European countries had showed solidarity with the south during the euro zone crisis by giving them financial aid.
"But whoever demands it, also has obligations. I can’t spend all my money on booze and women and then ask you for your support. This principle holds at personal ... and even European levels," he was quoted as saying.
Dijsselbloem said on Wednesday that he had no intention of quitting. He said that he regretted any offense caused by the comments but they could be explained by "strict Dutch, Calvinistic culture, with Dutch directness."
"I understand that this is not always well understood and appreciated, elsewhere in Europe," Dijsselbloem said. "That is another lesson I take on board."
Dijsselbloem has been Eurogroup head since 2013 and his term ends in January next year.
Euro zone finance ministers are however due to discuss whether he should stay in the post until then after his center-left party suffered heavily in this month's Dutch elections. A new formal coalition is yet to be appointed and he could lose his job as finance minister.
A senior ally of Dutch Prime Minister Mark Rutte said Dijsselbloem still had the government's backing.
A spokeswoman for German Finance Minister Wolfgang Schaeuble sought to play down the remarks.
"We expect, so long as this (Dutch) government is in office, that we will have a fully functioning Eurogroup chair," she said, adding: "I don't award marks for style in interviews."
Europe's debt crisis started with a bailout for Greece in 2010. Portugal, Cyprus and Ireland also received emergency loans, while Spain sought rescue funds for its banks. Greece has still not recovered and is currently seeking new loans.
Greek government spokesman Dimitris Tzanakopoulos said the comment was "completely misguided, it adopts stereotypes that widen the chasm between north and south and lays out the carpet for extremist views, not to mention sexist overtones."
European Competition Commissioner Margrethe Vestager said Dijsselbloem's comments were "wrong."
Austerity measures unleashed anger and frequent protests in southern Europe during the crisis, often directed at Germany and Chancellor Angela Merkel. In Greece this week several booby-trapped packages, intended for euro zone officials including Dijsselbloem, were intercepted by authorities.
Dijsselbloem has been in trouble previously for his outspoken comments. In 2014, he called European Commission head Jean-Claude Juncker a heavy drinker and smoker.
He also spooked markets in 2013 when he said the Cypriot bank rescue plan, in which depositors with more than 100,000 euros faced losses along with shareholders and bondholders, would be the new template for euro zone bank rescues.
(Reporting by Andrei Khalip and Axel Bugge, additional reporting by Jan Strupczewski in Brussels, Karolina Tagaris in Athens, Paul Carrel in Berlin; Editing by Richard Lough)