Portugal will need as much as 90 billion euros ($129 billion), including 10 billion euros in June, under a bailout package from the European Union and the International Monetary Fund, people familiar with the situation said Thursday.
Terms of the package will be discussed in more detail at an EU finance ministers' meeting in Hungary beginning Friday. A formal request for aid was submitted Thursday, a Portuguese government spokesman said.
It will take two to three weeks to work out an austerity program to accompany a bailout with the help of the European Commission, the European Central Bank, and the IMF, German Finance Minister Wolfgang Schauble said Thursday.
The funds are expected to be used to cover Portugal's short-term debt obligations and cash shortfalls at public-service companies, and to repay loans made to nationalized bank Banco Portugues de Negocios.
Funds would also be set aside to cover local banks' potential capital shortfalls, according to one person familiar with the situation.
Portugal will become the third nation in the 17-member currency bloc, after Greece and Ireland, to turn to its peers for help, after concerns over the country's funding capabilities and its heavy debt burden triggered a series of downgrades in its credit ratings.
Portuguese policy makers say there is a growing consensus that a bailout would need to be structured and disbursed in several phases, coming before and after the country's June 5 elections.
The current government and the incoming administration would share the responsibility of negotiating the deal.
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