News out of Der Spiegel via Reuters saying that Germany and France are urging Portugal to accept a bailout. The market have clearly pushed the issue as Portuguese yields surge. With Portugal likely to accept some sort of package as bond market press on them it will be interesting to see how the situation in Spain unfolds in the coming months:
“Germany and France want Portugal to accept an international bailout as soon as possible in order to prevent its debt crisis spreading to other countries, German magazine Der Spiegel reported on Saturday.
Without citing its sources, the magazine said government experts from both European heavyweights were concerned Lisbon will soon not be able to finance its debt at reasonable rates, after its borrowing costs rose at the end of last year.
Berlin and Paris also want euro zone countries to publicly commit to do whatever it takes to protect the bloc’s single currency, including topping up a 750 billion euro ($968 billion) rescue fund if necessary.
Portugal is viewed by many economists as the peripheral euro zone country that is most likely to follow Ireland and Greece to seek an international bailout as it grapples to cut its debts and borrowing costs. It holds its first bond auction of the year next week.”