Portugal Rejects Increasing Calls for a Bailout

Added by Gary Dunn on January 11, 2011

A struggling Portugal is battling increasing pressure to become the next eurozone economy to be bailed out.

By some seen as a worrying sign, Portugal is putting up much the same resistance as was seen by Ireland days before their £72bn European/International Monetary Fund bailout.

There is reported disagreement between the eurozone nations over the need of a rescue package; Spanish finance minister has shown support of his Portuguese counterpart and argues that no financial help will be required.

However, some argue that France and Germany are pushing for the deal to help ease the pressure on the euro, while both countries reject such claims as “nonsense”.

The issue is reaching a culmination point as Portugal is expected to raise money on the bond markets this coming Wednesday, which is thought to provide a clearer indication of whether Portugal will be able to keep itself afloat or not.

The yield on Portuguese 10-year government bonds has in recent days reached record highs, and similar trends have been shown in Spain, Belgium and Italy as a result of investor concerns and wider contagion.