Portugal Faces Debt Crisis, Bailout Looms

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Yet another European country appears to be on the verge of financial collapse.

Portugal's heavy debt resulted in Prime Minister Jose Socrates' resignation due to the country's opposition parties rejecting his proposal to reduce that debt.

"The opposition (parties) took away the government's ability to continue running the country. As a consequence, I have tendered my resignation to the president," Prime Minister Jose Socrates said in a televised statement.

His resignation also ended the government's six-year period in power.

"This crisis comes ... at the worst possible time - ahead of a summit that's decisive for Portugal and decisive for Europe too," Socrates said.

International markets took that as proof that the country will need a bailout -- just as Greece and Ireland did last year.

Socrates said his government had done everything in it's power to dodge a bailout "so we wouldn't end up in a situation like Greece or Ireland" where fiscal measures imposed by the bailout terms have squeezed the finances of families and companies.

Portugal's crisis is another setback for European leaders who've been trying to reassure markets about the financial soundness of the 17-nation Eurozone.

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