Portugal's government pledged a fresh batch of measures Friday to reduce spending and boost revenue, amid growing fears that its high borrowing costs may soon force it to seek a bailout.
At a news conference, Finance Minister Fernando Teixeira dos Santos reiterated the government's plan to lower Portugal's budget deficit to 4.6% of gross domestic product this year and 3% of GDP in 2012, from an estimated 7.3% of GDP in 2010.
He promised new measures to accomplish that despite expectations that the country will fall back into recession because of the government's previous deficit-reduction efforts.
The comments failed to calm speculation of a possible Portuguese bailout. The yield on Portugal's 10-year bond rose to a recent record of 7.622% after a senior euro-zone official in Brussels said Germany was opposed to allowing the euro zone's rescue fund to buy bonds from indebted countries.
This would place more pressure on countries on the European Union's periphery like Greece, Ireland and Portugal, which had hoped that the European Financial Stability Facility would buy their bonds to ease their stock of outstanding debt.
Mr. dos Santos said Portugal faces "a situation of difficulty and uncertainty," and that the new measures "obviously require sacrifices" and a "strong, convincing response."
