Euro zone nations and its central bank are urging Portugal to apply for a financial bailout from a European rescue fund, Financial Times Deutschland reported on Friday
Without revealing its sources, the paper said a majority of euro zone countries and the European Central Bank were putting pressure on Portugal to follow Ireland and Greece and seek aid in order to save Spain – European Union’s fifth-largest economy – from having to do the same.
If Portugal were to use the fund, it would be good for Spain, because the country is heavily exposed to Portugal.
he German Finance Ministry could not immediately be reached for comment on the report which suggested that despite public displays of confidence, euro area leaders were alarmed at the prospect of the debt crisis engulfing ever more of its members.
German Chancellor Angela Merkel, who unsettled markets by her comment this week that the euro was in an „exceptionally serious” situation, said she was confident the euro area would emerge stronger from the crisis.
Some economists and commentators, mostly in Britain and the United States, have suggested the bloc launched in 1999 could split because of high debts and deficits of nations on its periphery and their inability to compete with Germany.
Greece received a three-year 110-billion-euro EU/IMF bailout in May, leading to the creation of the EFSF, which Ireland has now applied to tap to cope with the enormous cost of bailing out its banks.