Katainen said that Finland’s decision on the bailout would be monitored carefully in other European countries.

”The Finnish parliament could ruin the whole package,” said Katainen. “Then we would be in uncharted waters. This is not just a Finnish issue, it affects the whole of Europe.”

The European Commission and the International Monetary Fund were given a mandate to begin negotiations with the Portuguese political parties on the bailout package.

Finland is not just demanding that Portugal implements higher taxes and public spending cuts, but also a structural adjustment programme and privatisations.

Katainen says that the bailout will require more stringent conditions than those previously rejected by the Portuguese opposition parties. The Finnish Finance Minister says that the forces now demanding austerity and reform can “no longer be fooled”.