Portuguese Prime Minister Pedro Passos Coelho has urged banks to give more loans to businesses in an effort to fight recession in the heavily-indebted country.
"The state is going to ensure that banks can do everything to revive credit distribution," Coelho said on Saturday night after a meeting by his party's national council in Lisbon.
He said the recession in his embattled eurozone country was partly caused by "the lack of credit flowing through the economy, while there are banks which are in a position to do so" after being recapitalised with state assistance.
Portugal is suffering from its deepest recession in 40 years amid austerity measures imposed by Coelho's government, and the economy is set to contract by 2.3 percent this year after shrinking 3.2 percent in 2012.
Unemployment has hit a new record of 16.9 percent and is set to increase even further this year amid cutbacks in public spending.
The country is under renewed pressure after the constitutional court last week rejected several austerity measures worth 1.3 billion euros.
This will make it difficult for the government to reduce the public sector deficit to 5.5 percent of gross domestic product, a condition for European Union and International Monetary Fund bailout funds.
However eurozone finance ministers on Friday agreed to give bailed-out Portugal an extra seven years to repay aid received to save it from collapse.
To compensate for the rejected austerity measures government will have to make large budget cuts in the areas of health, social security, education and public enterprises.
The planned cuts will on Monday be presented to the troika of EU, IMF and European Central Bank lenders.