Portuguese Prime Minister Jose Socrates resigned on March 23 after parliament rejected his austerity package. “The defeat is likely to trigger a bailout similar to the rescue packages Greece and the Republic of Ireland had to accept last year,” reports the bbc.

The Wall Street Journal agrees, writing, “Without the budget cuts, Portugal is almost certain to need an international bailout. It will run out of money this year without fresh cash, and markets are charging punitive rates for borrowing.”

In response, credit rating agencies Standard & Poor’s and Fitch have cut Portugal’s debt ratings by two notches.

Socrates, however, knows the penalties that come with a bailout, and wants to avoid one.

“I know what this meant for Ireland and Greece, and I don’t wish it on my country,” he said. “Portugal must demonstrate that it is a country that can resolve its own problems.”

Another bailout could also strain Britain’s relations with Europe. Think tank Open Europe estimates that Britain would have to contribute between €810 million and €3.7 billion, “with the higher end of the estimate being more likely.”

As Conservative Member of the European Parliament Daniel Hannan points out, Britain may have to pay out to Portugal the equivalent of over half the spending cuts made in the recent budget. This won’t make Europe any more popular with British voters.

But Spain is probably the more worried nation. Moody’s cut the credit ratings of 30 of Spain’s leading lenders on March 24 in the wake of the Portuguese vote. Spain’s €1.1 trillion economy is twice the size of Greece’s, Ireland’s and Portugal’s put together.

Even if Portugal does not fall, Italy, Austria and Belgium still have problems. The euro has a fundamental weakness—a common currency cannot work without a common economic government. Until that government is completely solid, the crises will continue.