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The EU announced that it will negotiate a bailout deal with Portugal's current caretaker government.
No exact bailout amount has been announced but observers believe loans could total 90bn euros/$129 bn usd, or more than half of its 2010 GDP.
After months of denials...strongly "encouraged" by ECB President Jean-Claude Trichet...lame-duck PM Jose Socrates finally agreed to the aid.
Portugal's banks, big purchasers of government debt, recently announced their reluctance to buy any more of its debt.
Portugal only holds about $2 bn euros...but will have debts of $10 bn euros/ $14 bn usd maturing in June.
Investors have been dumping the nation's debt...and demanding interest rates as high as 5.1% for 6-month bonds.
Despite the fall of the Socrates government because of proposed austerity measures, the EU will continue to demand more austerity measures in exchange for its help.
AND: COMMENTARY: M. BURKE: On "the Tony Soprano bailout."
For Ireland and Greece, an EU bailout is..." like a mobster's embrace." Get ready Portugal!
http://www.guardian.co.uk/commentisfree/2011/apr/07/portugal-bailout-european-commission
