LISBON, Portugal - April 28, 2010 - As markets looked for the next European domino to be toppled by Greece's debt crisis this week, all eyes turned to Portugal – a country that has become relatively poorer, in European terms, over the past decade. It was no comfort that neighbouring Spain also came under the spotlight today as the debt crisis threatened to engulf the eurozone's fourth largest economy.

Portugal's Socialist Prime Minister José Sócrates called in opposition leader Pedro Passos Coelho, of the center-right Social Democrat party, for an emergency meeting. "This is the most difficult moment in their political life," Publico newspaper declared in a solemn editorial.

The two men agreed to work together to fight off "a speculative attack on the euro and Portuguese debt," said Sócrates afterwards. Passos Coelho said "additional austerity measures" could be expected, beyond those in an existing three-year plan.

Portugal shares Greece's explosive cocktail of a high budget deficit, large and growing debt mountain, and poor growth prospects.