London/Brussels (Reuters) - the European Central Bank donned Portugal buoy temporary rescue Monday by buying its bonds, said traders, the pressure of the market and peer mounted to Lisbon to seek an international rescue plan soon.
A source of senior eurozone told Reuters Sunday as the Germany, France and other countries of the euro area grew Portugal to seek an EU - IMF assistance program after the Greece and Ireland, to prevent the contagion spread to the much more Spain, the fourth largest economy in the euro area.
Premium Portuguese sovereign debt interest rates fell Monday after sharply increasing as traders said last weekend that the ECB has intervened to buy bonds of the Government in the secondary market.
"They buy 5 years and 10 years at the Portugal, what people are offering really," said a trader.
Another trader said the ECB to buy bonds of Greek and Irish too. EU sources assert that Central Bank has not yet purchased the Spanish government debt.
The source of the euro area said that Lisbon between 50 billion and EUR 100 billion ($ 64.5-$ 129.1 billion) in the form of loans, similar to the Ireland, who has accepted a rescue of EU - IMF EUR 80 billion in December after a banking crisis caused by a housing bubble burst entangled state with the huge passive.
"LITTLE CHANCE OF ESCAPE.
German Finance Minister Wolfgang Sch?uble, denied that Berlin was pushing anyone to ask for help, but he said he was defending the euro.
Spanish economy Minister Elena Salgado said that Portugal did not need to ask for help because he was meeting its commitments to reduce its budget deficit. And the European Commission stated that no discussion is currently underway on assistance to the Portugal or any other country.
But economists and analysts said market it is generally regarded as only a matter of time before high-deficit Portugal, with a stagnant economy lost competitiveness since its entry into the euro area, should seek assistance.
"If the market extends Dungeon amounting, Portugal has little chance to escape from a rescue, said Laurence Boone, Director of research at Barclays Capital in Paris.
Deutsche Bank economists Gilles Moec and Marco Stringa stated in note that the Government of Lisbon should significantly "over-issue" debt in the first four months to avoid deterioration marked its cash position while the Portuguese banks will face a peak in their need to refinance in January and February.
"It would be rational for the Portugal to seek outside help sooner rather than later, they said.
European Finance Ministers are due to consider a more comprehensive response to the crisis of continuous debt during their next monthly meeting 17-18 January.
A spokesman for the German Finance said Portugal was not in the agenda, but the source of the eurozone said informal exploratory talks have already begun.
Senior eurozone source said that the comprehensive approach would entail:
-implementation of austerity measures to reduce public deficits, which was already on the right track;
-supplementing the European financial system repair tougher Bank stress tests due to the first quarter;
-strengthening financial net of security in the euro area, which is subject to intensive negotiations with the Germany;
-complete the reform of the economic governance of the euro area by pushing the legislation required by the Finance Ministers of the EU Council and European Parliament; and
-implementation of structural economic reforms of labour markets and pension systems, on which the European Commission should make specific recommendations, this week.
ELEMENT TOUGHEST
The most difficult element to this agenda is the strengthening of financial performer by German resistance to the increase in the size of the European financial stability facility 440 billion euros, EU sources say.
Berlin has also opposed to him to be used with more flexibility to provide standby credit lines or to buy State bonds or to finance the recapitalisation of the Bank before a country hits the buffers.
Friday last, Portuguese Prime Minister José Socrates said that his country did not need outside help because he was ahead of schedule reduce its budget deficit.
Socrates, who leads a minority Socialist Government, is stubbornly avoiding rescue, aware of traumatic history of International Monetary Fund rescues two of the Portugal since its return to democracy in 1974.
The memory of the participation of the IMF in 1977 and 1983, is so etched on the Portuguese psyche as the media of the country are not even mention would mainly the EU who would fund any bailout of that time.
Many Portuguese, remember the loss of sovereignty and the difficulties the country traversed during these periods.
(Additional reporting by Axel Bugge at Lisbon, Tracy Rucinski Madrid, Annike Breidthardt Berlin, written by Paul Taylor; editing by Mike Peacock)
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