Portugal doesn’t need financial rescue: PM

Portugal’s outgoing Prime Minister Jose Socrates insisted Friday that his country does not need a financial rescue package, as a political crisis raised fears of an international bailout.

“Portugal does not need a financial rescue plan and I will maintain this in defending my country,” Socrates told reporters after a European Union summit clouded by his country’s financial troubles.

“I know what this meant for Ireland and Greece, and I don’t wish it on my country,” he said of the two fellow eurozone countries that were forced to take multi-billion-euro bailouts in exchange for tough austerity measures.

“Portugal must demonstrate that it is a country that can resolve its own problems,” added Socrates who resigned on Wednesday and was attending the EU summit in a caretaker capacity.

He warned that Europe would suffer if Portugal was forced to tap into a eurozone financial rescue fund that has already been used by Ireland after Greece received its own bailout last year.

“The idea that Europe would be defending itself if Portugal asks for external aid is childish. This would be detrimental to Europe, to the prestige of Europe,” he said.

“Even worse, this would mean that we would put more countries at risk, giving credence to the domino effect,” Socrates said.

Socrates resigned late Wednesday after all five opposition parties voted against his minority government’s latest package of austerity measures, which proposed further tax hikes and social spending cuts.

The prime minister insisted that his country would meet its budget commitments for this year, saying “the 2011 objectives will be reached. All measures for this year have been implemented.”

“I understand that a political crisis doesn’t help, but this crisis will not distract Portugal from meeting its responsibilities for the country and for Europe,” he said.

“I hope the markets can understand that Portugal is a country that is committed to the European project and the single currency.”