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As their borrowing costs skyrocket, Portugal along with Spain are heavily lobbying Ireland to take an EU bailout.
They fear "contagion" from the retreat of investor confidence.
The Irish government admitted that it had been in talks with EU officials over its debts but reports are that it is very reluctant to accept help at this time.
Portugal's Finance Minister Fernando Teixeira dos Santos (pictured) said: “If things are getting worse in Ireland, for instance, that will have a contagion impact on the other euro zone economies and particularly on those that are under closer scrutiny of markets, like Portugal,” he said. Asked if Ireland should accept a bailout to stem the contagion, Teixeira dos Santos said, “It’s not up to me to make that assessment.”
Portugal especially worries investors because it has lagged Spain and even Greece in proposing new "austerity" measures.
Many economists believe it inevitable that Ireland will tap into and may need ALL of a €60bn EU rescue fund set up in May... just to shore up its ailing banks.
UPDATE and ANALYSIS/ NYTIMES/ 17 NOV:
Are Irish pride and national politics holding-up an agreement? An political observer said that Ireland's PM Cowen was correct “in playing coy and cautious until absolutely certain what the situation is and what’s on the table, to get the strongest deal he can.” But “pride cometh before a fall. We’re in serious danger of falling off a cliff.” Plus, Germany wants Ireland's corporate tax raised. Experts estimate Irish banks may need $100 billion euros bailout. Austria is even holding up its contribution to the Greek bailout fund because “If Greece doesn’t fulfill certain things, we have the need for discussion,” its finance minister said. Greece was “not 100 percent on track."
