LISBON/DUBLIN - March 31, 2011 - Portugal revealed that its budget deficit had ballooned above target and Ireland said its banks needed 24-billion euros in extra capital, shaking euro zone markets and deepening the bloc’s sovereign debt crisis.

European leaders had hoped a package of new anti-crisis measures agreed at a Brussels summit last week would help draw a line under the woes that have plagued the 17-nation currency area for over a year, forcing bailouts of Greece and Ireland.

But a volatile mix of developments on Thursday showed why the bloc is likely to remain a focus for investors, even if many had turned their attention to the conflict in Libya and nuclear disaster in Japan in recent weeks.

In an echo of the Greek deficit revision in late 2009 that first stoked market concerns about euro zone finances, Portugal presented new figures showing its 2010 budget deficit totalled 8.6% of gross domestic product (GDP), more than a full point above the 7.3% the government had been targeting.

Lisbon said the upward revision was due to a simple accounting change demanded by Europe’s statistics agency rather than any attempt to deceive, but bond markets responded by pushing the yields on Portuguese bonds to new euro-era highs.