Portugal crisis back and worse

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Portugal's financial crisis has reignited, triggering a stock market plunge and once again raising the spectre that its borrowing costs could soon become unsustainable.

Share prices plummeted 6% in early trading on Wednesday and other major stock markets, including the FTSE 100, also fell sharply.

Investors were reacting to growing political turmoil after Foreign Minister Paulo Portas resigned on Tuesday night, a day after the shock departure of Finance Minister Vitor Gaspar amid growing unrest against austerity.

Prime Minister Pedro Passos Coelho has defied calls to follow suit but the resignations at the top of the centre-right government have left deep concerns over not only the coalition's future but Portugal's ability to pursue the steep savings, demanded by creditors, in return for continued bailout support.

There has been a fierce public backlash against the austerity drive, in what is one of the poorest countries that uses the euro.

http://web.orange.co.uk/article/news/markets_fall_amid_looming_portugal_crisis