Portugal Says EU Can't Force Governments to Accept Rescue Aid

Portuguese Finance Minister Fernando Teixeira dos Santos said that EU governments can not impose a rescue plan in his country even when speculation mounted that Portugal will eventually have to request one.

"Some people think that the best way to preserve the stability of the euro is to push and force countries that have now been in the spotlight for the help," said Teixeira dos Santos, Jornal de Noticias said in an interview. The comments, made yesterday, were confirmed by the Ministry of Finance. "But that's not the vision or the political choice of the countries involved."

Portuguese bonds have declined as the government strives to convince investors it can avoid the fate of Ireland and Greece, which has asked EU rescue this year. Most governments in the euro region and the European Central Bank are urging Portugal to accept a rescue plan to halt the contagion spread to Spain, the Financial Times Deutschland said today.

A Portuguese official in the office of Prime Minister Jose Socrates said the government does not face pressure. A spokesman for German Finance Ministry declined comment. The ECB declined comment.

The 10-year yield of Portugal, the government bond yield rose 10 basis points to 7.10 today, pushing the spread over German equivalent to 444 basis points. Spain spread widened to a record 258 basis points.

Ireland Pressure

Ireland was forced to ransom on November 21, eight days after officials pressed in a press conference the ECB to accept emergency aid. Minister of Finance of Portugal, said his country does not need a bailout by the U.S. position is not as serious as that of Ireland.

"It is clear that what we are betting on being able to guarantee to Portugal to continue funding itself in the market to ensure the functioning of public administration, and also to stabilize the funding mechanisms for the private sector, through financial sector, "said Teixeira dos Santos, paper.