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Portuguese politicians today adopted a budget austerity for 2011, designed for the deficit of 7 3pc output sink this year to 4 6pc next year. The European Union welcomes the move, saying that it would enhance confidence in the economy of the country.

Fears that the Portugal and the Spain will be the next member to be swallowed by their debt problems were climbing during the week, yields on Spanish debt for 10 years, from two points of base Friday to 5 16pc - a record high since his arrival at euro .the ' Italy is also under threat.

Simon Derrick, head of research of the currency at the Bank of New York Mellon, said: "our data show are outputs of the Spain noticeable binding Italy suggesting investors are increasingly unstable .the ' case seems to set the additional euro weakness."

The euro fell to a minimum of two fresh months against the dollar, falling 1.2 cents Friday at the end of the week in more than five hundred more low at $1.3239.

Markets continue to sell off the coast of sovereign bonds Spain concerns that there could possibly be fourth online for a rescue operation with their concern about the stability of its weakest banks withdrew in the role as lenders played Ireland light force in Dublin in a rescue plan.

Javier Ariztegui, Deputy Governor of the Bank of Spain Friday urged unquoted regional savings banks the countries hard hit by a bubble property bursting in mergers and said that additional stress test results would be ready by the end of March.

In the meantime, banks need to continue efforts to clean up their balance sheets and show greater transparency, including detailing the quarterly results.

Cover additional stress, which will be published in advance of the parallel audits due to be carried out in other regions of the European Union - tests "of the additional information on the promotion and construction, residential mortgages, detailing ready-to-value ratios corresponding and collateral", he said.

With the exception of a few small banks unlisted savings banks of the Spain past scale European this - well that analysts have questioned their relevance since the Irish bailout was announced July stress tests.

Zapatero says that the European Commission, nor the Central Bank has urged Spain to take additional measures to meet the objectives of reducing its deficit limits of euro in 2013.

"The European Commission did not request Spain for nothing in the world, the ECB has not asked Spain why whatsoever, nor yesterday or the day before", he said.

He reiterated that his Government did not plan any hiking tax percentage - point increases a tax on value added earlier this year.

"The VAT increase contributed much to our deficit reduction", he said, referring to the figures published Tuesday showing the deficit for the year to October Spain central Government had fallen by 47.3% a year.

Meanwhile, the credit rating agency Fitch has warned all Irish Bank senior debt restructuring "could have broader implications for the euro area.

TEN Irish State broadcaster said Friday that the interest rate will be much higher than expected on the Ireland bailout loan.

He reported that the rate is likely to be between 6 7pc and 7pc, which prompted anger of opposition Fine Gael Ireland, who said anything over 6pc is "unacceptable".

The terms are likely to be fixed by the beginning of next week.

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