Brussels (Reuters) - pressure grows on the Portugal of Germany, France and other countries of the eurozone to request financial assistance from the EU and the IMF to stop block debt crisis from spreading, a source of higher euro area said Sunday.
Preliminary discussions on the possibility to ask for help if its cost of the financing markets become too high for Portugal were held since July, said the source.
No. formal talks on aid began again, a number of sources of eurozone said, but pressure was rising in the Eurogroup, which brings the eurozone finance ministers.
"France and the Germany indicated in the context of the Eurogroup Portugal should apply to aid sooner rather than later," the main source said, adding that the Finland and the Netherlands have expressed similar views.
Earlier Sunday, a spokesman for the Portuguese Government refused to report German magazine that Lisbon was under pressure from Berlin and Paris to seek an EU rescue plan and the Monetary Fund International.
Many policymakers hope EU and IMF funding for the Portugal would ring fence the debt crisis in euro area, including the Greece and the Ireland were already taken orchestrated.
Assist in Lisbon would protect the Spain which could be the next in line, but whose funding must extend the capabilities of current aid euro zone at the edge.
"The real battle will be the battle of Spain - but, I think we have much more chance of success," said the source.
Asked to estimate the possible size of a program that Portugal would need, said the source:
"More than 50 billion euros and less than 100 billion euros, say between 60 and 80 billion, but it is off the coast of headlines, because we do not know the needs of the Portuguese banking sector."
Portugal is considered by many economists as the device of the euro area are more likely to follow the Ireland and the Greece as it seizes to cut its debt and borrowing costs.
"Portugal do the has not asked - you cannot force someone to wants something," a second main source of eurozone said. "Arithmetically strictly speaking, it is not necessary, but because the nerves of some market players, it may be useful."
Pressure on Lisbon to ask for help has increased since Portuguese paper yields rose last week to levels that many regard as non-viable, the first source said.
Already there was pressure on Lisbon to request financial assistance before a mid-December EU leaders Summit, but without effect, the first source said, because the Portuguese Prime Minister Jose Socrates opposes such an approach.
"He y still memories at the IMF program Portugal 1970s and the loss of sovereignty that it entails," said the source.
When the Portugal may be forced to turn to the European Union and the IMF to help, the first source replied that this depended on developments in performance of the position of Socrates and how much pressure the German Chancellor Angela Merkel and French President Nicolas Sarkozy were willing to apply.
Portugal takes his first auction of bond of the year, next week, offering $ 1.25 billion of euros of paper maturing in October 2014 and June 2020.
"This auction will be closely monitored," said the source. The Portuguese bond yields of five years on the secondary market is 6.43 crafts paper percentage and 10 years at 7.26%.
Document in five years is already higher than the cost of financing that Portugal would get in the EU and IMF assistance, said the source.
"They had a difficult week markets", a third source of eurozone said, referring to the thrust of the yields on good Portuguese primary auctions last week and the evolution of the secondary market.
"The question is whether they can raise what they need in the first half of the year with the longest delivery end of the curve." «View the calendar occupied in the first quarter, it's a challenge", said the third source.
The first source also noted that Lisbon was already a step ahead with the reforms that are part of a potential assistance program, the Portuguese Government should apply for it.
Recent reforms of austerity of the Portugal, part of the 2011 tough budget have been worked on in cooperation with the European Commission "as a program of aid, but without funding", said the source.
(Statement by Jan Strupczewski, editing by David Stamp)
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