Portugal requests EU bailout

Portugal has requested an emergency EU bail-out from the European Commission.

Trouble loomed as soon as the Lisbon government’s austerity plans collapsed last month, triggering speculation that a bail-out similar to that given to Greece and Ireland would be inevitable.

But Portugal was told to try again to get an austerity package through Parliament before coming cap-in-hand to Brussels.

Now the country’s caretaker prime minister Jose Socrates – who stood down after his austerity plans failed to get sufficient support – has admitted his country is exposed to too much financial risk to wait any longer.

A massive financial bail-out is now on the cards along the lines of EU rescue deals for Greece and Portugal.

The new economic crisis confronting Europe comes weeks after an EU summit to confirm a new permanent €700bn bail-out facility for eurozone countries in trouble.

The temporary fund has already been used to bail out Ireland, and now Portugal is expected to come calling to prop up its economy and shore up the shaky credibility of the euro.

Tonight a European Commission statement said the request from Portugal for “the activation of the financial support mechanisms” would now be processed as quickly as possible.

It added: “The President of the European Commission reaffirms on this occasion his confidence in Portugal’s capacity to overcome the present difficulties, with the solidarity of its partners.”

UK Independence Party leader Nigel Farage said the UK should refuse to contribute to any bail-out

Mr Farage said: “The full tragic reality of the euro is now being seen. Bailing out Portugal is utterly pointless, it only traps them into a system into which they are totally unsuited. Britain should not contribute a single penny to their bail-out.”