Thousands of demonstrators are confronting police in Brussels, ahead of Thursday's start of a European Union summit faced with contentious issues about how to cope with the continent's debt-plagued governments.
Belgian police fired tear gas and bursts from water cannons at some of the group of at least 12,000 protesters. Answering calls by unions to demonstrate, they voiced anger at the plans of European leaders to impose higher retirement ages and reduce social welfare spending throughout the EU. About 30 demonstrators tried to break through police barriers and threw rocks at police.
The EU leaders are facing heightened debt concerns within the bloc. Financial analysts say the collapse of the Portuguese government on Wednesday increases the likelihood that it will become the third European country, following Greece and Ireland last year, to need an international bailout to help finance its operations.
Portugal's socialist prime minister, Jose Socrates, followed through on his promise to resign the leadership of his minority government when opposition parties rejected his fourth list of austerity measures in less than a year that were aimed at preventing Portugal from needing a bailout. The Portuguese government's borrowing costs immediately surged on Thursday to the highest ever since the common euro currency was adopted in 1999.
Some European financial analysts say that Spain could also need outside financial help. The Moody's financial services firm downgraded the credit ratings of 30 Spanish banks on Thursday.
Luxembourg's prime minister said it was up to Portugal to request financial assistance. But he said it would only be granted under strict conditions.
Meanwhile, Germany, with the continent's strongest economy, is taking a harder line against its contributions toward possible future bailouts of neighboring countries.
German Chancellor Angela Merkel says she wants to renegotiate Berlin's contributions to the bailout fund, spreading out the country's payments over a longer timeframe.
Some information for this report was provided by AFP and Reuters.
