Portugal's government is scrambling to convince investors and fellow European Union member states that it will not need a financial bailout like the ones Greece and Ireland received. Prime Minister José Sócrates went so far as to declare that his country "won't ask for any financial help because it's not necessary." But some analysts say Portugal's anemic growth, high private-sector debt, and sizable government deficit make an EU bailout all but inevitable. Will Portugal be the next domino to topple in Europe's sovereign debt crisis? (Watch a Russia Today report about Portugal's position)
This is like Ireland and Greece all over again: If recent history is any indication, Sócrates' denial "means Portugal is probably going to be asking for help in a matter of days," says Stephen L. Bernard in The Wall Street Journal. It took less than a week for Greek and Irish leaders to go from eerily similar go-it-alone pledges to asking for EU and IMF help. Investors are betting, with reason, that a Portuguese change of heart is imminent, too.
"Portugal bailout denial: Sure sign one is coming soon?"
Portugal will do anything to avoid asking for help: "Many Greeks and Irish detested their government's decisions to take bailouts," says Axel Bugge in Reuters, but that will be nothing next to the disgust the Portuguese would feel. With "the trauma of past IMF interventions" in the 1970s and 1980s "deeply etched" in the nation's psyche, and a presidential race underway, you can bet Sócrates will do everything in his power to avoid a bailout.
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The real fear is what comes next: Almost everyone agrees that Sócrates "doth protest too much," and will have to accept a bailout whether he wants to or not, says Michael Babad in The Globe and Mail. But really, a bailout of Portugal "wouldn't be a huge thing" for the EU. The "big fear" is that Portugal will be the last of "the smaller euro economies" to succumb before the markets turn on Spain and Italy. And if that happens, Europe is in real trouble.
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