By Larry Elliott, Heather Stewart, Simon Goodley and agencies,
Guardian.co.uk, 6 April 2011 21.26 BST

Country will ask for bailout due to high debts and difficulty raising money - which analysts say could be €80bn

Portugal's prime minister has said his country will ask for a bailout due to its high debts and difficulty raising money on international markets....The move came as fears grew of a fresh debt crisis for weak countries on the fringes of the single currency zone as the European Central Bank prepared to start raising interest rates from the emergency level plumbed during the financial crisis....

Also see:

Forget Portugal, Says Roubini — Worry About Spain
By Chris Barth, Invested Interest @ forbes.com, April 6, 2011

....“I think the big question is not Portugal — that is too small — but rather whether the contagion could spread, over time, to Spain, a country that is on one side too big to fail, but from the other side too big to be saved,” he said late last week on Bloomberg’s The Pulse.

Citing fundamental risks in unemployment, housing, Spain’s financial system and the country’s ability to compete with its EU counterparts, Roubini pinpointed the nation as a situation worth attention as barometer of the spread of European contagion.

Spain will have to make hard choices in order to shield itself from contagion, according to Roubini, including accelerated structural reform and enforcing fiscal austerity. “There have been reforms that go in the right direction, but much more radical reforms need to be done to stabilize the economic, financial and fiscal conditions of Spain,” said Roubini.

Roubini also touched on the potential for a rate hike by the European Central Bank...

And:

Banks  1,  Portugal 0
Financial Times Editorial, April 6 2011 21:10

Another Eurozone country has been humbled by its banks. Earlier this week, Portugal’s banks were threatening a bond-buyers’ go-slow unless the caretaker government sought financial help from other European Union countries. After being beaten up in Wednesday’s debt auction, Lisbon has waved the white flag....