Portugal Denies Bailout Need As EU Leaders Prepare Aid Mechanism

The prime minister of Portugal has insisted that his country does not need international aid to avert a crisis, even as European leaders debate a package of coordinated reforms for the region, according toThe Wall Street Journal. On Friday,José Sócratessaid in an interview that Portugal’s leadership was “doing its job” to address the countries debt troubles by lowering its deficit, and asserted that a bailout would be “against Portugal and against Europe.” However, Sócrates acknowledged the need for enhanced “credibility” for the region, and pointed to “more coordination of economic policies” as the solution for the region.

The Portuguese leader’s statement came as the 27 countries of theEuropean Unionmet in Brussels to discuss the potential reform of theEuropean Financial Stability Facilitythat was created to protect the eurozone from the contagion of the sovereign debt crisis. Leaders have agreed to formulate “concrete proposals” for the reworking of the EFSF to ensure that it has “the necessary flexibility and financial capacity to provide adequate support.” The changes will be implemented in the permanent rescue system, theEuropean Stability Mechanism, that is to come into operation in 2013. There is still disagreement among some officials over some proposed measures, and a final agreement is expected to be unveiled at the E.U. summit at the end of March.

Click here to read the story on Sócrates' comments from The Wall Street Journal.

Click here for coverage of the stability mechanism from The Wall Street Journal.