Portuguese Prime Minister José Sócrates has announced his resignation parliament rejected his minority government's latest round of austerity measures.
‘Today every opposition party rejected the measures proposed by the government to prevent that Portugal resort to external aid,’ Mr Sócrates said in a televised address.
‘The opposition removed from the government the conditions to govern. As a result I have presented my resignation to the president,’ he said.
All five opposition parties voted against the Socialist government's fourth cost-cutting plan in a year.
They had proposed resolutions calling for the rejection of the measures, which reduce pensions and state spending.
The government had hoped to avoid a multi-billion euro financial bailout similar to the ones received by Ireland and Greece last year.
The Socialists have 97 of parliament's 230 seats and no allies on whom they can rely. The plan needed at least 116 votes to pass.