EU dismisses reports of Portugal seeking bailout

| November 26, 2010 | 0 Comments
EU dismisses reports of Portugal seeking bailout

Speculation has been mounting that Portugal is under pressure to seek a bailout from the EU rescue fund – however, the country continues to strongly deny the claims.

European Commission President, Jose Manuel Barroso, has today also denied reports that the country is looking for a financial rescue package.

Mr Barroso said the reports were “absolutely false, completely false”.

Today, Portugal approved its 2011 budget. The Government has introduced massive spending cuts and tax hikes aimed at bringing the budget deficit down to 4.6% next year, from the current 7.3% of GDP.

Portuguese Prime Minister, Jose Socrates, said the country had “no alternative at all” to reducing its budget.

However, there have been reports that the country will be forced to turn to the EU for a bailout package after yields on 10-year bonds have risen to dangerous levels – mimicking what happened in Greece and Ireland – just before they were forced to seek emergency aid.

This week, there has also been fears for the single currency after the euro fell as low as $1.32 for the first time in over two months.

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