Portugal's caretaker government said late on Tuesday it has negotiated a bailout deal with the EU, ECB and the IMF worth €78bn over three years.

In a televised address to his nation caretaker prime minister Jose Socrates, said: “The government has obtained a good deal. This is a deal that defends Portugal.”

According to Socrates the terms of the agreement are similar to those signed by Greece and Ireland.

Portugal becomes the third Eurozone member, after Greece and Ireland, to be forced to negotiate an international bailout due to its crippling debt.

The terms of the Portuguese bailout seem more lenient, with this year's target for the budget deficit having been raised from 4.6 percent GDP to 5.9 percent. There is also an extended deadline to reach it. Socrates stated that the deficit will have to be cut to 4.5 percent in 2012 and 3 percent in 2013.