Germany says Europe worried by Paraguay instability

BERLIN, June 25 (Reuters) - Germany and its EU partners are watching developments in Paraguay with concern, Berlin said on Monday, after the ousting of the Paraguayan president by Congress last week sparked loud protests, especially by left-leaning South American governments.

The German foreign ministry's comments contradicted the words of a German minister visiting Paraguay, who appeared to back Federico Franco's new government by saying the change of regime had respected the South American country's constitution.

German foreign ministry spokesman Andreas Peschke told reporters in Berlin that International Development Minister Dirk Niebel's comments after meeting Franco in the Paraguayan capital Asuncion had only been based on his "first impression".

"It is quite clear that not just the German government but also the whole European Union are currently concerned about the political developments in Paraguay," said Peschke.

Franco was sworn in last Friday after Congress voted to remove Lugo from office, saying the former Catholic bishop had failed in his duty to maintain social harmony.

Leftist leaders in Argentina, Venezuela, Bolivia and Ecuador have refused to recognize the new administration and threatened to lobby for sanctions against Paraguay, one of South America's poorest countries with a history of political instability.

Franco, whose Liberal Party broke ranks with Lugo, paving the way for his removal, says the change of leadership was carried out in line with Paraguay's constitution.

"In our view and that of our partners, it is important at such a delicate moment, when everything is still in flux, to reach a permanent and sustainable solution to the domestic political struggle in Paraguay," said Peschke in Berlin.

(Reporting by Stephen Brown, editing by Gareth Jones)