The Portuguese government's tough budget passed the parliament just prior to the weekend, with approval for an austerity plan aimed at cutting its deficit to the level permitted by the EU.

Prime Minister Jose Socrates described the vote as a political victory for the country.

The vote, he said, would be the answer for the restoration of Portugal's economic credibility.

As in Greece, trade unions have already threatened to strike over plans for a public sector wage freeze and pension cuts.

There have been concerns that Portugal will run into the same trouble as Greece, where an enormous budget deficit has unsettled the public.