MARBELLA CLUB

and will need to raise significant amounts of new capital to "resist additional adverse shocks".

The analysis of the weakness of Portugal's banks, contained in the, which took Ireland to the brink of bankruptcy.

There is however one important difference, which some will argue makes Portugal's financial predicament more perilous: Portugal's banks have not only been borrowing colossal sums from the ECB, they have also been lending billions of euros to the Portuguese government, so that it can finance the significant gap between what it spends and its dwindling tax revenues.

This is how the central bank put it: "the expansion of Portuguese banks' balance sheets in the first half of the year essentially reflected the financing of general government".