The difference between the yield on German government bonds - considered the safest - and yields for those three countries has reached the highest in the euro's 12-year history.

Late on November 30 ratings agency Standard & Poor's placed Portugal on credit watch over the country's huge debts.

It came after Portugal's central bank warned of the risks facing its banks.

Portugal's banks faced an "intolerable risk" if the government in Lisbon failed to consolidate public finances, the central bank said.

Christine Lagarde, France's finance minister, said that her country and Germany would stand by Portugal and Spain if they needed financial help.