Portugal needs help. Yesterday, they admitted that they are in dire financial straits, and they have turned to the EU for help. Led by Prime Minister Jose Socrates, the Portuguese government on Wednesday submitted an application for aid to the European Commission. Should they receive the requested aid, they will be the third EU country, after Greece and Ireland, to receive this assistance.
Asking for Help
Socrates, in a televised address to the people of his country, explained that this request for external assistance comes “as a last resort.” This snowballing financial crisis is due to many factors. Socrates resigned on March 23 after failing to push through austerity measures. The Finance Minister Fernando Teixeira dos Santos said that the country has been pushed into this situation as a result of the financial markets.
Portugal, at the moment, needs to repay $5.68 billion to investors next week, and needs to repay another similar amount, if not a bit more, by mid-June. Last year, the eurozone bloc created a €440 billion fund that is called The European Financial Stability Facility (EFSF) that is intended to help member countries in financial difficulties. It was established after Greece received an enormous bail-out in April, followed by one by Ireland in November.
Now, time will tell how the EU will deal with Portugal and how they will get out of the financial situation that they have found themselves drowning in at the moment.