Germany will support Portugal in its forthcoming decision on how to exit its bailout program, Chancellor Angela Merkel said on Tuesday, adding that she expected a decision from Lisbon soon partly because confidence in the euro zone was growing.

"It is a decision for the Portuguese government," Merkel said at a news conference in Berlin with Portugal's Prime Minister Pedro Passos Coelho.

"I completely understand it when the Portuguese Prime Minister says he will take the decision when it needs to be taken and Germany will support any decision.. We have stood by Portugal and we will continue to do so," she said.

Some economists fear that Portugal may need a further loan from creditors after it exits the bailout. Passos Coelho said Portugal had not yet decided how to exit the bailout.

"I took the opportunity to tell Chancellor Merkel that the Portuguese government has not yet taken a decision about when we will exit the programme," he said, adding that the most important thing was that Portugal was discussing "how to exit rather than whether we need another programme".

Merkel also said it would be important if Europe agrees to a banking union in the next few days.