Crisis in Portugal worsens

PORTUGAL’S financial plight has deepened after official figures showed its budget deficit last year was 8.6% of GDP — way above the government target of 7.3% intended to ease market fears.

The estimate by the National Statistics Institute was another setback for Portugal’s struggle to avoid taking a bailout, like those Greece and Ireland accepted last year, as it faces two months without a government and debt repayments it cannot afford.

The deficit figure is far above the eurozone’s limit of 3%, though the statistics institute noted its measurements were based on new EU accounting rules which include the cost of helping banks and state companies.