Portugal's political crisis sees EU summit clouded in debt fears

European leaders began meeting in Brussels on Thursday as fears deepened that Portugal may now be unable to avoid a bailout package following Wednesday night's resignation of Prime Minister José Sócrates.

Sócrates, who remains the head of a caretaker government, traveled to Brussels for the EU summit. "The only thing that worries me, because someone has to worry, is defending Portugal, the European project and a common monetary system," he said, declining to speak about his country's internal political situation or whether he will ask Brussels for a bailout package. European leaders said that any bailout could cost as much as 75 billion euros.

Portugal's political and economic crisis swelled on Wednesday night after parliament rejected the minority Socialist government's latest package of deficit-cutting measures. Sócrates had wanted to come to the summit with the new austerity measures approved. The new package entailed a mix of spending cuts and higher taxes equivalent to 4.5 percent of GDP over the next three years in order to ensure it meets its austerity targets. The plan includes a special levy on pensions of over 1,500 euros a month.

"Let's be clear, a negative coalition of political forces has forced the resignation of the government because it has withdrawn the minimum conditions needed to govern," Sócrates said late Wednesday. President Aníbal Cavaco Silva has 55 days to announce early elections, with a new government not expected to be in place until June. He met with representatives of the political parties on Thursday.