(CNN) -- Portugal is seeking a bailout from the European Union after its government Wednesday admitted the country needed help.
The Portuguese government, led by caretaker Prime Minister Jose Socrates, said in a statement Wednesday it had submitted an application for aid to the European Commission. Portugal would be the third eurozone country, after Greece and Ireland, to receive European Union aid.
In a televised address Socrates said the country has always seen "a request for external assistance as a last resort."
He added: "I think we have reached the moment whereby not taking this decision would bring further risks that the country should not face."
Finance Minister Fernando Teixeira dos Santos said the country was pushed into the situation by the financial markets.
In a statement the European Commission said its president Jose Manuel Barroso had been informed of Portugal's intent to seek assistance.
"This request will be processed in the swiftest possible manner," the statement said.
Socrates' admission came just hours after the government was forced to pay a huge premium to borrow short-term cash, ratcheting up the pressure on its finances.
The cost of Portugal's borrowings has risen dramatically since Socrates resigned on March 23 after failing to push through austerity measures.
Gary Jenkins, head of fixed income at Evolution Securities, said the request was inevitable. "A bailout does take away the possibility of a default in the short term, but it is not the end game, more the end of the beginning," he said.
Portugal is due to repay more than €4 billion ($5.68 billion) to investors next week, followed by payments of almost €5 billion mid-June.
The June repayments were seen as Portugal's pressure point, when there is the added complication of the snap election due to be held on June 5.
On Wednesday morning the country raised €1 billion ($1.4 billion) in short-term funds at a high yield, throwing the fragility of its economy back in focus.
Portugal sold €550 million of six month treasury bills at a yield of 5.117%, and €455 million of 12 month treasury bills at 5.902%. That compares with Portugal's sale of six month bills at 2.984% early March, and 12 months bills at 4.331% a fortnight earlier.
Beyond the very high costs of short-term funding, the country's 10-year debt costs Wednesday sat at 8.6%, according to data provider Markit. Yields above 7% are considered unsustainable.
In the middle of last year the eurozone bloc established a €440 billion fund, called The European Financial Stability Facility (EFSF), to assist member countries in financial strife.
The fund was established after Greece received a €110 billion bail-out in April, followed by a €85 billion bail-out for Ireland in November.
CNN's Isa Soares contributed to this report.