Portugal asks EU for €80 billion bail out

The outgoing prime minister of Portugal Jose Socrates has succumbed to pressure and asked the European Union for a €80 billion bail-out.

It followed an auction of Portugese government debt where the short-term cost of financing was shown to be nearly double what it had been for the country one month ago.

Socrates, who has battled hard to avoid asking for the loan before he leaves office after the election on 5 June, told the nation: 'The government decided today to ask the European commission for financial help.'

The move was welcomed by EU officials and backed by the main opposition party.