EU hold crisis talks as Portugal seeks bailout

BUDAPEST — European finance ministers face a point of no return as they gather in Hungary on Thursday for talks derailed by Portugal's sudden admission it needs an emergency bailout.An abrupt Lisbon U-turn, after insisting for weeks it did not need the external financial aid experts deemed inevitable, radically changed the mood going into a supposedly informal meeting lasting until Saturday.Portugal's shock announcement put an immediate spotlight on its wealthier neighbour, Spain, which has scrambled to slash spending to reassure markets that it will not be the next domino to fall after Athens, Dublin and Lisbon.Instead of pressure-free talks on the long-term needs of the debt-struck eurozone, the budgetary woes of bailed-out Greece and Ireland's bid to loosen its own rescue loan terms, ministers will have to answer unforgiving markets."Procrastination is no longer an option," Sony Kapoor, head of the Re-Define financial think tank, told AFP.After Portugal, "Europe has to arrest the spiral of bad news and inadequate action before it becomes a black hole, but there are no easy, obvious solutions any more," he said.Outgoing Portuguese Prime Minister Jose Socrates said a bailout became inevitable when lawmakers rejected new austerity measures presented as the last-chance saloon."I believe it is necessary to have recourse to the financing mechanisms which are available within the European context," Finance Minister Fernando Teixeira dos Santos said.Spanish Finance Minister Elena Salgado denied that her country was at risk of a similar bailout, insisting that her government's economic reforms are "deeper" and carried out "at a faster pace" than in Lisbon. Governments must now grapple with the size of loans required -- Luxembourg Prime Minister Jean-Claude Juncker, who heads the Eurogroup of finance ministers, has suggested 75 billion euros ($107.4 billion). Just as importantly, they also have to try and address the sense that underlying problems of solvency for governments that share a currency, but not econom

Add comment

Nick
Content

Submit