Struggling Portugal avoids debt default

Portugal avoided defaulting on its mountainous debt yesterday as it scraped together €4.2 billion (about £3.7bn) for a bond redemption, but further depleted its meagre cash reserves as it desperately awaits a promised bail-out.

Portuguese officials admitted that the country won't have enough money to settle a €7bn debt falling due in mid-June and have asked for financial help amid a cash crunch that is threatening the provision of basic services.