Portugal crisis sends markets down

Portugal’s government is teetering on the brink of collapse, sending financial markets around Europe into a tailspin and reigniting concerns about the euro area’s strategy for dealing with its prolonged financial crisis.

Prime minister Pedro Passos Coelho defied calls to resign but was running out of options to keep his centre-right coalition government together following the back-to-back resignations this week of two key ministers in a spat over austerity.