A woman stands in front of a ATM at the Millenium bcp bank on in Lisbon, Portugal.
A woman stands in front of a ATM at the Millenium bcp bank on in Lisbon, Portugal. - 
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David Brancaccio: Today three big banks in Portugal were forced to draw on $8.25 billion worth of European Union bailout money to weather the current financial storm. Portugal has been slogging through very tight budgets in order to be eligible for money like this.

Paulo Casaca is an economist and former politician in Portugal. He joins us from Brussels, Mr. Casaca, good morning.

Paulo Casaca: Good morning.

Brancaccio: Help me understand what happened with the banks today -- should we take this as a sign that the banks in Portugal are weak or should we take this as a sign that Portugal is doing what's necessary so that it can, when necessary, draw on the bailout money?

Casaca: Well I certainly think it means that the banks are weak otherwise they would not need to make these measures. And it means as well that the Portuguese debt is growing to keep the banks afloat. If it's going to work or not, it's really very difficult to answer because I think to a very large extent it's going to depend on the European environment.

Brancaccio: Help me understand why the Portuguese banks are drawing on that money now.

Casaca: The phenomenon is not only a Portuguese one, it's a European one. We are seeing all the signs of what we can call a recession spiral. People try to make ends meet by cutting deficits and this deficit cutting is putting everyone in a more difficult position. Most of the people are very skeptical, and I myself remain very skeptical on the capacity of these programs to sort out the Portuguese problems.

Brancaccio: Paulo Casaca is now a consultant in Belgium. Mr. Casaca, thank you very much for this.

Casaca: It was a pleasure speaking to you.

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Follow David Brancaccio at @DavidBrancaccio