THE INTERNATIONAL Monetary Fund says it is ready to assist in a rescue package for Portugal if it is asked.

“We have seen the statements of Portuguese Prime Minister José Socrates and the president of the European Commission, José Manuel Durao Barroso, about the intention of Portugal to ask for the activation of the financial support mechanisms,” the IMF said in a statement issued from Washington last night.

“We have not received a request for financial assistance. We stand ready to assist Portugal,” the fund added.

The European Commission, also in a statement released in Brussels last night, said Mr Barroso “reaffirms on this occasion his confidence in Portugal’s capacity to overcome the present difficulties, with the solidarity of its partners”.

Economic and monetary affairs commissioner Olli Rehn meanwhile said Portugal’s request for EU financial help was a responsible move to stabilise the situation in the country and in Europe.

“This is a responsible move by the Portuguese government for the sake of economic stability in the country and in Europe,” Mr Rehn said.

The amount of aid was to be determined shortly, he said.

Tullia Bucco, an economist at UniCredit in Milan, said the country would need about €65 billion to cover its funding needs for the next three years, including €10 billion to bolster bank capital.

The market, she said, was already pricing the fact that Portugal would have been forced to ask for external aid.

“I don’t see major risks of contagion,” Ms Bucco added. – (Reuters, Bloomberg)