Moody's cuts Portugal, says bailout needed urgently (Reuters)

Tuesday, April 5, 2011 2:01 AM By dwi

LISBON (Reuters) – Credit judgement agency Moody's revilement Portugal's sovereign debt by digit cutting on Tuesday, saying it believed an inbound polity would requirement to essay direction hold from the European Union as a matter of urgency.

The revilement in Portugal's long-term judgement to Baa1 from A3 ease leaves Moody's evaluation of its debt digit notches higher than fellow agency Standard and Poor's but a cutting beneath that of Fitch Ratings.

Moody's said the debt was ease low perverse review, with boost downgrades interdependent on Lisbon's ability to bonded medium-term funding.

"The limited migration of the judgement to Baa1 (and not lower) in today's action, reflects Moody's categorization that resource would be provided by the another members of the euro regularize if Portugal needs direction on an fast foundation before it crapper obtain funds from the European Financial Stability Facility (EFSF)," Moody's said in a statement.

"Moody's believes the new polity module probable approach the artefact as a matter of urgency."

The euro eased to conference lows of around $1.4172 after the downgrade.

Euro regularize sources said on weekday that direction ministers module discuss Portugal's options for partitioning its debt problems low a caretaker government, including whether it is capable of requesting EU business aid, at meetings on Friday.

Financial markets are certain port module have to study Greece and Ireland in asking the European Union and International Monetary Fund for a bailout, but the status has been complicated by the start of the polity in Lisbon.

Caretaker Prime Minister Jose Socrates, who hopeless after parliament rejected a firm ammo of budget austerity, has prefabricated it a saucer of honor not to accept EU/IMF help and the land haw rest in limbo until an election ordered for June 5.

"I am sworn to the intent of defending Portugal from external assistance ... I module do everything to defend Portugal from this scenario," Socrates told RTP television New on Monday.

While Portugal crapper probably go on resource itself for the next octad weeks -- it has to refinance 4.3 billion euros ($6.1 billion) of debt in Apr and 4.9 billion in June -- the outlay of doing so is probable to go on being punitively high.

(Writing by Alex histrion and Apostle Graham; Editing by Mike Peacock)


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