Euro Ministers See Portugal Bailout Deal by Mid-May

European finance ministers said Portugal must make deeper budget cuts and privatize state firms in return for a bailout that could be agreed by mid-May. Portugal bowed to pressure from financial markets and its European partners this week and became the third euro zone country after Greece and Ireland to request financial help from the European Union and the International Monetary Fund. Finance ministers from the 17-nation single currency area met at a palace north of Budapest on Friday to discuss the sovereign debt crisis that has haunted the bloc for over a year, with Portugal the main focus of their talks.

Portuguese Prime Minister Jose Socratesresigned last month after parliament rejected a new round of budget austerity meant to help the country meet its deficit reduction targets for 2011. He is continuing to serve in a caretaker capacity until new elections are held on June 5. The main opposition party has backed the request for aid, but negotiations on an economic adjustment program — a precondition for assistance — are likely to be tough as cross-party consensus will be needed.