Portugal Does Not Need International Bailout – PM Jose Socrates

Portuguese Prime Minister Jose Socrates says his country can solve its financial problems by itself and does not need an international bailout.

In an interview published Saturday, Mr. Socrates said Portugal does not “have any problem” that would require it to ask the International Monetary Fund for assistance like Greece and Ireland already have done this year.

European financial analysts and policy makers have voiced fears that Portugal and Spain, because of their government budget deficits, may be the next countries that will be forced to seek aid from their European counterparts and the IMF. As a result, the borrowing costs for the two governments have risen sharply.

But Mr. Socrates said that financial markets will eventually realize that Portugal is taking sufficient steps to control its deficit.

Like some other European countries, Portugal has adopted various austerity measures for 2011. It has increased taxes and cut the salaries of civil servants by 5 percent.

The Portuguese austerity measures are aimed at cutting its budget deficit from 7.3 percent of its overall economic production this year to 4.6 percent next year.

But the cuts in spending could also curb economic growth and increase the nation's 10.9 percent unemployment rate.

Greek and Irish officials also said they did not need outside financial assistance before relenting and accepting the aid. But Mr. Socrates said his government “doesn't need this.”

He said Portugal does not “need anybody to come and tell us what we should do.” voa

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