Around 9.6 million people were eligible to vote in the elections in which conservative leader Pedro Passos Coelho is expected to oust Socialist caretaker Prime Minister Jose Socrates.

Opinion polls gave Passos Coelho's Social Democratic Party (PSD) a lead of about 5 percentage points over Socrates, who headed a minority government.

Socrates resigned in March over parliament's rejection of his fourth austerity package, prompting President Anibal Cavaco Silva to call elections two years ahead of schedule.

Portugal's borrowing costs then rose to unsustainable heights, forcing the country to accept a 78-billion-euro ($114-billion) bailout from the European Union and the International Monetary Fund (IMF).

'Sexy' package of cuts

The loans depend on Lisbon introducing spending cuts and tax rises that are likely to prove unpopular with the electorate. As a result, the main political parties have been warned to behave responsibly.

Negotiator for the EU Commission, Jürgen Kröger said government spending needs to be cut, no matter who is in charge.

"The program is so sexy, because it can quickly produce results," Kröger said in May. "That's why the campaign should be clear that the next government, whoever it is, has responsibility for introducing the savings plan."

Skepticism in Brussels

The Luxembourger MEP Frank Engel, who sits as part of the conservative faction in the parliamentary committee responsible for the aid funding, however, expressed doubts. According to Engel, both the socialists and the conservatives will struggle to secure a majority in parliament.

"Carrying out the extreme cost-cutting measures that need to be made in southern Europe is difficult, but they need to be carried out for longer," Engel said.

In the northern euro states, which are footing the bill for the bailouts, there is growing frustration with the impact countries like Portugal, Ireland and Greece are having on home economies.

"Where credit has already been given out, it's difficult to say to voters: "Now even more needs to be given!" Engel said.

In Finland, the euro-skeptic "True Finns" have won 19.1 percent of votes in the 2011 election, becoming the third largest party in the Finnish parliament. In the Netherlands, France and Austria, there are several critical voices, and parts of the governing coalition in Germany are opposed to the bailing out of ailing EU states.

Need to stick together

Olli Rehn, the EU Commissioner for Economic and Financial Affairs, has long warned that the debt crisis can be an ordeal for all the 17 eurozone countries.

At an informal meeting of EU finance ministers in Hungary, Rehn said with regards to Portugal it was important to "stay away from financial unrest."

"If we do so, we can protect the economic recovery in Europe and create jobs," he said.

The commissioner knows only too well that Portugal is intertwined with Spain and France. If Portugal goes bankrupt, it will have a knock-on effect on the Spanish institutions that it is close to.

The Portuguese savings plan will put the economy into recession for around two years, but the economy's structural problems mean a painful readjustment is necessary.

According to Engel, the long-term restructuring of countries' budgets can only work when member states cede responsibility to Brussels. The European Union would then need a budget, out of which rescue measures can be funded and the confidence can be put back into financial markets.

"The never-ending rescue of individual states can not work, if only because there's not enough money," Engel said. "We would have to do some serious shifting of European finances."

Author: Bernd Riegert / cb

Editor: Toma Tasovac