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Portugal's crisis is bad timing for EU summit

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Portugal's crisis is bad timing for EU summit

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Europe’s leaders will meet for a crucial summit today amid a political crisis in Portugal that threatens fresh trouble for the euro.

Portuguese Prime Minister Jose Socrates will be in Brussels to help sign-off on a lasting game plan to defend the euro after months of turbulence caused by the financial crisis.

But Socrates resigned yesterday after parliament rejected his minority government’s latest austerity plan, aimed at avoiding a multi-billion euro bailout along the lines of Greece and Ireland.

Originally scheduled to finalise plans to shore up the single currency, leaders of the 27-nation union will be embroiled in a new dilemma if Portugal seeks a bailout from the EU and IMF.

There is also likely to be dissent over the EU’s common foreign policy due to splits on the international action in Libya.