Portuguese bailout should be last resort, Barroso says

Portugal should view turning to the European Union and the IMF for help in solving its debt crisis as a "last resort," Bloomberg quoted European Commission President José Durão Manuel Barroso as saying on Tuesday.

Barroso was speaking as yields on Portuguese debt in the secondary market continued to trade at levels similar to those of Greek and Irish debt before they sought external assistance. The rate on the five-year bond at one point hit 7.6 percent.

Prime Minister José Sócrates said late Monday that having to go to the IMF and/or the European Financial Stability Facility (EFSF) would constitute a loss of "prestige" and "dignity" for Portugal as a "country that can't resolve its problems."

Asked in the European Parliament whether Portugal needed a bailout, Barroso, who is Portuguese, said: "That's a question for the Portuguese authorities. It's a sovereign question of Portugal. The financial stability fund and the use of that fund, and IMF assistance as well, have to be seen as a last resort."

The European Union is due to hold summit meetings later this month with a view to reaching an agreement on beefing up the EFSF.

Portugal faces an important market test today when the debt management agency IGCP is due to hold an auction of bonds maturing in September 2013. It is looking to sell up to 1 billion euros in the bonds.