portugal facing huge trouble

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Portugal's caretaker government said on Wednesday that it needs financing from the EU to cope with the current financial difficulties. The request heralds a U-turn, after Portuguese lawmakers resisted external aid for months, despite sharply deteriorating financial conditions.

Jose Socrates, Portuguese Prime Minister, said, "The Portuguese government has decided to make a request to the European Commission, applying for financial assistance to ensure the financing conditions in our country, our financial system and our economy. Everyone knows how I regret that this decision was inevitable. The Portuguese know that I struggled for another solution in the national interest. I will strive with all determination that the negotiation of this request for help has the lowest cost possible."

The latest move by the Portuguese government is backed, by the leader of the opposition, Social Democrats. The nation is now the third euro zone member, to seek a rescue after Greece and Ireland. Prime Minister Jose Socrates said that the parliament's rejection of additional austerity measures last month, has aggravated the financial situation.

Portugal's financial health, worsened last month, after the government resigned following a parliamentary defeat, on tougher austerity measures. That sent bond yields soaring, sparking a series of credit rating downgrades and a warning by local banks that they may no longer, be able to buy government debt.