France denies pushing Portugal towards bailout: source

10th January 2011, Comments 0 comments

France denied on Monday a German media report that it was pushing struggling Portugal to accept financial aid but warned that January would be a "testing month," a government source told AFP.

"France does not confirm at all the report in the Spiegel," said a source at the finance ministry.

The German newspaper reported that both Berlin and Paris were pushing Lisbon to seek an early bailout in order to prevent Spain and Belgium becoming the next euro crisis casualties.

Germany, Portugal and the European Commission have also denied the report.

But the finance ministry source warned that "the month of January will test the calmness of bond markets; we are watching closely what happens and will discuss it with our European partners."

Portugal and Spain remained under pressure on the money markets on Monday ahead of key bond sales later in the week which will be a crunch test of sentiment on the outlook.

Fellow eurozone members Ireland and Greece had to accept EU-International Monetary Fund aid last year when the interest rates they had to pay to raise fresh funding became unsustainable.

© 2011 AFP

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