Everybody except Portugal knew this was coming: Portugal needs a bailout from the European Union.
A few weeks back, Portugal's legislature rejected new austerity measures. The prime minister, who supported the measures said he'd resign. The interest rate the country had to pay to borrow money shot up. Finally, this afternoon, the government said it would ask for a bailout.
But all that was just the last straw. It's been pretty clear for a year now that Greece, Ireland and Portugal would all need bailouts. As of today, that's come to pass.
These are all small countries with small economies. The EU can bail them out and still be in decent fiscal shape. Portugal's bailout is likely to cost somewhere around $100 billion, according to the AP. That's not trivial, but it's not enough to take down the EU.
The big worry all along — and the big worry still — is what will become of Spain.
Spain's economy is bigger than the economies of Portugal, Ireland and Greece combined. If Spain needs a bailout, the cost to the EU could be "devastatingly high," an economist told the Guardian late last year.
Spain's not in immediate trouble: Bond yields there have held steady recently, even as they've been rising for Portugal and Ireland.
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