4:43pm UK, Monday January 10, 2011
James Sillars, Sky News Online
Portugal is resisting pressure to become the next eurozone nation forced into a massive financial bailout.
Construction or destruction? It's a crucial year for the single currency's future
Perhaps worryingly for the Portuguese people, the noises out of Lisbon match those Ireland made in the days leading up to its own European Union/International Monetary Fund bailout worth £72bn.
But there is a growing belief that Portugal may also have to climb down in its opposition to a rescue package, which some commentators estimate could reach £66bn.
The country witnessed a general strike back in November amid a public backlash against government spending cuts.
Under any deal, Britain is committed to making a contribution.
The issue is coming to a head as Portugal is due to raise money on the bond markets this Wednesday.
Portugal Under Pressure
:: Portugal is looking to raise 20 billion euros in bonds to help finance itself this year
:: The country has an unemployment rate of 20%
:: The government has set a budget deficit target of 4.6%, down from 7.3% in 2010
The yield on its 10-year government bonds - the rate the Portuguese government pays to borrow money - has leapt again in recent days to record highs under its single currency membership.
Yields paid by other eurozone countries including Spain, Belgium and Italy, have also been rising as a result of investor concerns for Portugal and wider contagion.
Significantly, there is growing evidence of a split between nations using the single currency on the need for a rescue package.
Spain, itself under market pressure, has leapt to its neighbour's defence.
The Spanish finance minister agrees with his Portuguese counterpart that no financial help is required.
But France and Germany are reportedly anxious for a deal to be done to ease the pressure on the euro though they have described as "nonsense" claims they have demanded a rescue.
Either way, Wednesday's bond sale is expected to give a clearer picture on whether Portugal can keep itself afloat.
What on earth is happening that all these countries need bailing out. Can someone explain in laymans terms.