LISBON—Running out of money and paralyzed by a political crisis, Portugal said Wednesday it would ask the European Union for a financial bailout—setting up a crucial test of the bloc's emboldened efforts to contain its sovereign-debt crisis.The country's been running continual budget deficits for thirty years and chronic unemployment is a way of life for large segments of society. Portugal's a basket case --- and a case study in where today's progressive left will take the U.S. under Democrat Party spending and taxing programs.Portugal is the third nation in the 17-member euro zone to turn to its peers for help, and one that has long been seen as a firewall between small economies whose bailouts are painful but manageable and large economies—like Spain—whose infection would set the crisis on a far darker course.
After days of pressure in financial markets, Prime Minister José Sócrates told Brussels authorities Wednesday that he needed help, and late that evening broke the news to his countrymen in a televised address.
It has appeared inevitable for weeks. Portugal has struggled to raise cash from wary financial markets, and its persistent deficits are draining state coffers.
Politics are at a standstill: Two weeks ago, Mr. Sócrates's government collapsed after parliament rejected his latest bid to rein in Portugal's budget. Mr. Sócrates had adamantly refused to countenance a bailout. Wednesday night, he said he had no choice.
"It is time to assume the responsibility to the country," Mr. Sócrates said in his speech. "It is in the name of national interest that I tell the Portuguese people that we need to take this step."
See, "Government Shutdown Showdown: Obama, Republican and Democratic Congressional Leaders 'Narrow the Issues': Obama Meets John Boehner, Harry Reid at White House in Bid to Facilitate Spending Deal." And all the latest budget news at Memeorandum.
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