After months of speculation, denials, finger-pointing and debate, it has been confirmed that Portugal is ready to accept a financial bailout from the European Union. It now is the third of the so-called “PIIGS” nations (Portugal, Italy, Ireland, Greece, Spain) to accept a bailout in less than one year amid crushing debt loads. Greece was the first, followed by Ireland.
The European Union issued the following brief comment on the matter Thursday:
“The Portuguese Prime-Minister, José Sócrates, today informed the President of the European Commission, José Manuel Durão Barroso, of the intention of Portugal to ask for the activation of the financial support mechanisms. The president of the European Commission assured that this request will be processed in the swiftest possible manner, according to the rules applicable. 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.”
It has been speculated that such a bailout could reach upwards of $120 billion (USD) and almost certainly will come with forced austerity measures. Again, European economic stalwarts Germany and France are expected to do most of the heavy-lifting, so to speak, in footing the bill for the bailout.
Brian Shappell, NACM staff writer