Portugal crisis cloud EU Summit

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24 March 2011 last updated at 16: 57 GMT the Portuguese Prime Minister warned "very serious consequences" EU leaders are grappling with the a new threat with eurozone after Portugal of Parliament rejected an austerity budget and PM José of Sócrates resigned.

The vote means an international Bail-Out, similar to that of Greece and the Irish Republic in the last year is now accepted far more likely.

Socrates said opposition parties "by the Government the conditions to govern had removed".

EU Summit in Brussels aimed at combating the eurozone debt crisis.

Pressure

Although the situation in Libya and the recent events in Tunisia and Egypt are high on the agenda, the Summit has the moment been billed, which adopted a "comprehensive package" stabilisation of the euro-zone EU-27.

As part of the deal would the lending capacity of the European financial stability facility (EFSF) of 250bn euro (£ 218bn; $354bn) euro increase on 440bn. The EFSF will be replaced by a permanent European stability mechanism in 2013.

But EU governments their national contributions to the augmented have nailed not yet down, EFSF and Portugal's uncertain that policy hampered unanimity.

Pressure on Portugal economy more on Thursday as the interest of the country's ten-year bonds rose to a new high of 7.6%.

Portugal faces bond repayments of 4.3bn euro on 15 April and in a national address on Wednesday night, Socrates warned that the political crisis would have "Very serious consequences for the trust must to enjoy Portugal institutions and financial markets".

The rating agency Fitch downgraded Portugal's sovereign credit rating from A + to A - on Thursday.

Belgian police drove ahead of the Summit, again a group of demonstrators with water cannon and tear gas close to the venue, while thousands of other people peacefully protested against severe cuts.

'Brave'

Belgian Finance Minister Didier Reynders said that Portugal partners were ready to help, if desired.

Read the main current lending capacity of 250bn 440bn euros euro in the European financial stability facility (EFSF) permanent European stability mechanism (ESM) to be launched in 2013 with 500bn-euro loans of CapacityCountries arguing about their contributions "I always thought that it would be useful", Help organize raised werdeneinfach because the [Portugal allows] pay it on his debt to the undergoing restructuring, less interest and therefore make less, sometimes stressful ones, calls on [his] people, "he said on Thursday in Brussels."

"If Portugal asks, we to intervene." "For this to happen it must a plan to his finances back to better health and a request to the European Fund unlock will bring."

A Bail-Out for Portugal of zurückgeschnitten euro as a whole could, analysts say.

In a speech of the German Parliament (Bundestag) on Wednesday, German Chancellor Angela Merkel said it "regrettable" was that Portuguese had rejected members collecting Government proposed package of spending cuts and tax is.

Mr Sokrates praised efforts as "courageous", Mrs Merkel said: "what we need is a consistent path of consolidation and reform." "Has shown yesterday, how difficult this is."

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the history of this [Libya] crisis is that individual leaders have been, during the EU fight, to your voice "

end quote Gavin Hewitt BBC Europe caretaker role all five Portuguese opposition parties rejected austerity measures - the Government fourth set of proposals in a year, argue they went too far."

Although he stepped down on Wednesday, Socrates, the Summit is visited as a caretaker Prime Minister. A snap election is today, but the decision will be made by Portuguese President Anibal Cavaco Silva.

Lisbon has argued that his situation of Greece and the Irish Republic - different both have agreed to Bail-Outs of the European Union and the International Monetary Fund.

It says that its are lower than those Nations, deficit and debt, that it has suffered no bubble in the real estate prices and the banks are sound.

Arrival at the Summit on Thursday the new Irish Prime Minister, Enda Kenny, said he would on the results of stress tests on Irish banks waits before renegotiation of the conditions of the 85bn euro granted Bail-Out to Dublin in December. The results are expected on 31 March.

Dublin EU IMF requested help after pouring billions of euros in indebted Irish banks, but it will reduce the interest rate on the Bail-Out.