Portugal's international creditors may soon have to ease termsof the country's bailout to prevent the plan from derailing as thegovernment faces setbacks in attaining its deficit goals.

Prime Minister Pedro Passos Coelho's struggle to meet deficitpledges were further hampered last week when about 2 billion euros($2.5 billion) of planned cuts to pensions and civil servants'holiday pay were ruled unconstitutional. With Portugal's 10-yearbond yield above 10 percent, returning to the markets next year maybe untenable, requiring more international aid despite thepremier's insistence he won't seek concessions.

“Lisbon's strategy is to continue to be the good student amongbailed-out countries until it becomes clear that Brussels andBerlin must ease the rules of the game for it to succeed,” saidAntonio Barroso, a London-based analyst at Eurasia group.

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