Portugal's premier denies any need for IMF bail-out

PORTUGAL's economic problems can be resolved without seeking help from the International Monetary Fund, prime minister José Socrates Carvalho Pinto de Sousa has said.

"We don't have any problem that requires that we turn to the IMF," he said.

Many economists see Portugal as the next likely Eurozone candidate to need a bail-out after Greece and Ireland. Portugal's socialist leader said the crisis was more widespread than that.

"Our problem is just a budget problem that has to be corrected, as in other countries," Socrates said. "Whoever doesn't understand that what we are seeing is a systemic question, regarding the euro, hasn't understood anything."

Portugal has adopted an austerity budget, raising taxes and cutting public sector wages by 5 per cent to reduce its deficit from 7.3 per cent of output to 4.6 per cent by 2011.

Socrates said the IMF's presence in Portugal twice in recent decades had been a negative experience. "We don't need anybody to come and tell us what we should do," Socrates said.

Risk premiums on Portuguese bonds reached euro highs last month but fell sharply last week.