(Reuters) - Portugal is likely to need a rescue package of 45-60 billion euros from the European Union and the International Monetary Fund and may not get through the year without seeking a bailout.
Investors believe Portugal will be the next euro zone country after Greece and Ireland to ask for help as its borrowing costs have risen above sustainable levels while its economy lacks competitiveness and growth is very slow.
Portuguese Prime Minister Jose Socrates insists Portugal can survive without a rescue and that his austerity budget of tax rises and public sector wage cuts will keep the ship afloat.
But many economists believe a bailout is just a question of when, not if, and some expect it could happen before the year-end if Lisbon is persuaded to tap EU funds pre-emptively in an effort to stop the euro zone sovereign debt crisis from spreading to Spain.
"It is very likely that they will ask for a bailout -- maybe before Christmas depending on market developments in the next days," said Juergen Michels, euro zone economist at Citigroup.
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