Portugal gives up and asks for a bailout

So Portugal has finally caved in and asked the EU and IMF for a loan to tide it over until next pay day.  Hands up if you're surprised ...

It was only a month and a half ago that the Portuguese government said it wouldn't be needing a bailout from the EU and IMF despite the cost of government borrowing increasing pretty rapidly.  Unsurprisingly, they've run out of money and can't afford to make repayments on bonds that are maturing soon.

Even though this is a eurozone problem, we are going to have to contribute about £4bn toward the cost of bailing Portugal out thanks to the deal Alistair Darling did, with George Osbourne's agreement, to contribute 13.6% (the percentage of the EU budget we pay) of the cost of any bailout of the Euro.