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Portugal admits 'high risk' of needing a bailout

The country’s finance minister admits Portugal may ask for assistance – and implies that it could be Ireland’s fault.

Fernando Teixeira Dos Santos: the Portuguese finance minister has said pressure in the Eurozone has forced his country to the brink of seeking a bailout.
Fernando Teixeira Dos Santos: the Portuguese finance minister has said pressure in the Eurozone has forced his country to the brink of seeking a bailout.
Image: Francisco Seco/AP

PORTUGAL’S FINANCE MINISTER has admitted there is a ‘high risk’ that the country will be forced to ask for overseas assistance because of the continuing fears that the debt crisis in eurozone countries will spread – and has implied that Ireland is to blame.

Fernando Teixeira dos Santos said, the Financial Times (subscription needed) reports, that the “risk is high because we are not facing only a national or country problem”.

“It is the problems of Greece, Portugal and Ireland. This is not only a problem of this country,” he said, essentially placing more pressure on Ireland to make clear its medium term fiscal strategy by announcing its four-year budget strategy.

“This has to do with the eurozone and the stability of the eurozone, and that is why contagion in this framework is more likely,” Teixeira dos Santos said. “Markets look at these economies together because we are all in this together in the eurozone.

“Suppose we were not in the eurozone, the risk of contagion could be lower,” he added.

The cost of borrowing for Portugal has wavered today, though it has remained largely unchanged from its opening price of about 6.75% for ten-year bonds.

The remarks were made shortly before Ewald Nowotny, considered a senior policy advisor at the European Central Bank, said European authorities were looking for a quick solution to the funding problems facing Europe’s weaker nations.

Asked in a radio interview if Portugal and Spain would take aid if Ireland had already done so, Nowotny – the governor of the Austrian central bank – said the EU wanted a “quick, good solution to Ireland, so that there will be no spill-over”.

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Gavan Reilly

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