European Bank urged Portugal to seek help

1:58 PM European, Portugal, urged No Comments

Lisbon/Brussels Jean-Claude Trichet, the President of the European Central Bank (ECB) encouraged the Central Bank on Thursday fight Portugal to facilitate assistance to its financial woes.

Trichet spoke to who said ECB that it suffers from its main interest rate by a quarter percentage point to fight inflation, despite the debt problems, Portugal, Greece and also Ireland.

"We ask the Portuguese authorities to support encouraged", said Trichet, added to that which implement ECB which nation will help aid plan to everyone, which puts it in place.

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Portugal's woes are expected to meet with EU Finance Ministers in Budapest later Thursday will be discussed.

The ECB key refinancing rate is up to 1.25 per cent from a record low of 1 percent. The increase in the ECB benchmark refinancing rate, be first since July 2008 features a smooth exit from the Central Bank policy response to the global financial crisis. It had held since May 2009 the RAFFI rate to a record low 1.0%.

Trichet continued Europe faces risk of inflation despite the economic difficulties in Portugal, Greece and Ireland. Risks "remain inflation on the head" and the ECB future price developments, added "monitor very closely" he added.

The ECB rate decision came less than 24 hours after Portugal announced that it was looking for European Union support, long by the financial markets expected a decision.

Portugal will formalize its request for a bailout, reach the 85 billion euro ($122 billion) on Thursday could and a deal could be reached before June 5 election, officials said.

Decided on Wednesday, development aid, third country find Lisbon's caretaker Government always the euro Greece and Ireland to.

Cabinet Minister Pedro Silva Pereira said "Portugal today your request is formalized with the European Commission" reporters after a cabinet meeting.

The Socialist government resigned on 23 March to Parliament its strict plan rejected, sparking one crisis, the Portuguese-borrow pushed prices higher and led to more downgrades of the country's credit.

A euro zone source played down concerns that Prime Minister Jose Socrates could negotiate Government not the necessary powers, a federal bailout program, say, it would likely this in close cooperation with the main opposition party.

The source said that the most important elements of the programme by the Government before would probably little changed announced and budget targets.

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"The Portuguese programme before the elections, are agreed on 5 June," said an another senior EU source, adding that the first loans were most likely take place at Portugal until then.

Silva Pereira comment would that probably not on size of the aid, but said the Finnish Government, it could amount to 75-85 billion euros (107-122 billion dollars).

Portuguese banks took the unprecedented step Monday of warning the Government that could stop them think its debt - a move that likely Socrates search tip in help.

Publico daily said "Pressure from banks was crucial for the Government request for the help."

German Finance Minister Wolfgang Schauble said that the only could aid of a reform programme which would take to put two to three weeks together, adding that the problem at a meeting of the Eurogroup in Hungary would be discussed on Friday.

The associated press and Reuters contributed to this report.