German magazine Der Spiegel reported on Saturday that France and Germany want Portugal to accept an international bailout package as soon as possible to prevent any crisis and help contain a domino effect in the region.
After the borrowing costs increased at the end of 2010 for Portugal, government officials in Lisbon may not be able to raise funds at reasonable rates.
Two of the Euro zone’s biggest economies are seeking commitments from member countries of strict fiscal discipline and the assurance that they will undertake every possible step to prevent the collapse of the trading bloc’s single currency. Berlin and Paris also want a bigger emergency rescue fund than the current €750 billion (£623 billion) available.
Portugal is being viewed by many economists as the next country after Greece and Ireland to require a bailout package. The country is scheduled to hold the first bond auction of 2011 next week. It is already struggling with mounting debts and spiraling government borrowing costs.