So now we have the worst of all worlds in Europe.

Portugal, the third of the PIIGs (Portugal, Ireland, Italy and Greece), has lost its government and there is now no one there to ask for a bailout, should one be needed, or to make the decisions to stave off one.

José Socrates, Portugal's prime minister, resigned on Wednesday night after losing a crucial vote on austerity measures. That was the country's 4th austerity package in a year and designed to keep the baying market and northern European budget hawks at bay.

As a result, Europe's debt markets were reminded that the continent has not escaped the 2010 pressures on the eurozone and the euro, even thought the two-day leaders summit that is supposed to resolve this problem started last night.

According to the Financial Times the resignation