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Portugal third euro country to ask for EU financial bailout

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Portugal's outgoing prime minister, Socrates, confirmed tonight that Portugal needs EU financial help. Socrates addressed the nation live on TV from S Bento.

Earlier in the day, the sale of a billion euros in 6- and 12-month treasury bills brought temporary relief for the caretaker government in its effort to withstand having to request international aid as the country grapples with soaring rates, political uncertainty and rating downgrades. But the yield on 12-month T-bills spiked to 5.902 percent from 4.311 percent three weeks ago, and on six-month bills to 5.117 percent from 2.984 percent, highlighting the precarious position ahead of big redemptions this month and in June.

Mr Socrates said the country was "at too much risk that it shouldn't be exposed to". The government has long resisted asking for aid but last week admitted that it had missed its 2010 budget deficit target.

Portugal follows Greece and the Irish Republic in seeking a bailout.

Call it financial help, bridge loan or bailout, the process has started. Later in the evening the EU Commission President Barroso (also Portuguese) said that EU will deal with the Portuguese request as swiftly as possible.  Portugal has no government, asks assistance, but they have no mandate for 70 bn EUR bailout. Perhaps they will ask for just 10 bn EUR to get over the hump? The negotiation process will start now to settle the terms and condition of the bailout.

EU finance ministers are scheduled to meet Friday for informal talks in Hungary - post interest rate increase and "bailout" request from Portugal.

The Euro remained stable despite Portuguese request for EU financial assistance.

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