Portugal

Portugal’s caretaker government has said it will submit a formal written request for a financial rescue package to the European Commission on Thursday, becoming the third eurozone country to seek a bail-out after Greece and Ireland, the Financial Times reported. Pedro Silva Pereira, minister for the cabinet, said the request would take into account the fact that Portugal was being administered by a caretaker government until a general election on June 5.

Portugal’s caretaker government gave in to market pressures on Wednesday and joined Greece and Ireland in seeking an emergency bailout. The decision came after the government was forced to pay much higher rates to sell more debt, the International Herald Tribune reported. José Sócrates, Portugal’s prime minister, said in a televised address Wednesday night that he had requested aid from the European Commission after recognizing that borrowing costs had become unsustainable. “I had always considered outside aid as a last recourse scenario,” he said.

Portugal is holding talks with the European Union on how to meet its immediate borrowing needs as its banks press Lisbon to seek a bridging loan until a new government can negotiate a bail-out deal, the Financial Times reported. Portuguese banks have been the biggest purchasers of the government’s bonds in recent months, but bankers said some lenders were now reluctant to buy more sovereign debt. The country’s long-term credit rating was downgraded by Moody’s by one notch to Baa1 on Tuesday.

It's going to be a nail-biter. In the latest twist in the euro zone's struggle to repair its battered public finances, there are two desirable outcomes that may not be compatible, The Wall Street Journal reported. Portugal's government looks likely to run out of money within the next three months—according to most bond market analysts, it has enough cash to repay bonds that mature in April, but not those that mature in June. That would suggest that the government needs to go to its European Union partners and the International Monetary Fund for help, and now.

Standard & Poor’s said Tuesday that it had cut its sovereign credit ratings for Portugal and Greece, piling further pressure on the two countries with heavy debt loads, weak economies and moribund banks, the International Herald Tribune reported. S.& P. cut Portugal’s rating to BBB– from BBB, with a negative outlook, the agency’s second downgrade of the country since Friday. BBB- is the agency’s lowest investment grade rating and is just one notch above junk.

Faced with the collapse of the government of debt-troubled Portugal, European leaders on Friday called on competing political parties in Lisbon to commit to tough financial targets, while Spain sought to protect itself from contagion by announcing new economic policies, the International Herald Tribune reported. The moves followed a two-day meeting in Brussels, which was originally intended to put a capstone on the euro debt crisis but ended up being overshadowed by the resignation of the Portuguese prime minister, José Sócrates, who lost a parliamentary vote Wednesday.

Prime Minister Jose Socrates' resignation has left legal experts in debt-laden Portugal debating whether a caretaker government has the power to request an international bailout if its economic woes deepen, Reuters reported. Opposition parties on Thursday rejected Socrates' latest austerity measures, forcing him to resign and most likely lead a government with limited powers until a snap election expected to take place in late May at the earliest. President Anibal Cavaco Silva will meet leaders of political parties on Friday as he weighs whether to call such a poll.

Portugal’s borrowing costs climbed to a record Thursday, a day after the collapse of the government in Lisbon raised expectations that the country would be forced to seek an international bailout, the International Herald Tribune reported. The prime minister José Sócrates offered his resignation late Wednesday after his minority Socialist government failed to win parliamentary backing for its latest package of austerity measures, which were designed to bring down the country’s high budget deficit.

The future of Portuguese Prime Minister José Socrates hangs in the balance, as the outcome of an austerity vote could lead to his resignation and push the government closer to a financial bailout by the European Union and International Monetary Fund, The Wall Street Journal reported. Legislators will vote Wednesday on a series of new austerity measures unveiled earlier this month by the government, which said the plan is needed to cut the budget deficit and regain the confidence of bond investors. The main opposition parties plan to vote against those measures. Mr.

Euro zone leaders are set to agree a "competitiveness pact" at a summit on Friday and will push Portugal to announce new reforms to increase market confidence as they seek to draw a line under the debt crisis, Reuters reported. Germany has lowered expectations for a major breakthrough at the summit, saying the best that can be hoped for is an agreement on competitiveness. Bigger decisions to tackle the crisis -- such as whether to strengthen the euro zone bailout fund -- will be handled at an end-March summit.