(FT) -- Spanish and Portuguese leaders, with reinforcements from Brussels, are fighting a rearguard action to convince investors that there is no need for further eurozone bail-outs after the €80bn-€90bn ($109bn-$122bn) rescue agreed for Ireland at the weekend.
"Absolutely not," said Elena Salgado, Spanish finance minister, when asked in a radio interview on Monday whether Spain needed help from the European Union. "Spain is doing everything it has promised to do, with tangible results".
Portugal is regarded by bond market investors and economists as next in line for a rescue after the bail-outs of Greece and Ireland. But José Sócrates, Portuguese prime minister, was adamant that there was "no connection" between the Irish rescue and Portugal's problems.
"Portugal doesn't need anyone's help and will solve its own problems," he said, insisting that the country had a clear strategy to cut its yawning budget deficit.
As stock markets fell and the euro gave back early gains that followed the Irish deal, European officials weighed in on Portugal's side to try to calm speculation about the next bail-out.
Olli Rehn, European commissioner for economic and monetary affairs, said the problems of Portugal and Ireland were "very different" and that Portugal had taken "very courageous measures" to reduce its deficit and implement structural reforms. Jean-Claude Juncker of Luxembourg, who heads the group of eurozone finance ministers, said speculation against Spain and Portugal was "not justified".
By Monday afternoon, however, there was little sign of such reassurances making any impact on the financial markets. From Greece in the south-east of the eurozone to Ireland in the north-west and now Portugal in the south-west, the crisis seems to be moving around the periphery of the single currency area.
Those three economies are relatively small. A rescue of Spain, however, would place enormous strain on the eurozone. The country is the fourth-biggest economy in the area -- larger than Greece, Ireland and Portugal put together.
CNN
