Portugal's failure to pass an austerity plan and slash its budget deficit led Prime Minister Jose Socrates to resign yesterday and appears to put the country on an accelerated track toward a European Union-funded bailout package.
Concerns are rising that this could lead to a bailout "domino effect," with the Los Angeles Times reporting that "if Portugal needs a bailout, investors may begin to bet that struggling Spain will follow."
A wider question involves Europe's ability to sustain so many bailouts in the long term. But the EU may not have much choice, according to World Politics Review contributor Daniel McDowell, who tells Trend Lines, "Europe can't really afford to consider not bailing out Portugal -- and potentially more countries like Spain and Greece."