“The government doesn’t have any intention of doing that. We are very determined that that doesn’t happen,” Socrates told journalists after Standard and Poor’s downgraded the country’s credit rating for a second time in a week.

The downgrade had an immediate impact in the money markets, pushing up the yield or rate of return for investors on benchmark Portuguese 10-year bonds to a record high of 7.97 percent shortly thereafter.

“Put simply, the situation is aggravated. For our banks, our economy, our Republic,” said Socrates, who resigned last week after the parliament rejected additional austerity measures to balance the government’s finances and avoid a bailout.