NEW YORK (TheStreet) -- The euro was tumbling Wednesday morning as the European Union braced for the opposition vote on an austerity package proposed by Portugal's minority government.

The euro was falling 0.4% against the dollar at $1.4141.

This is the fourth set of austerity measures that the minority Socialist government has proposed in less than year. If it's rejected by the opposition parties, Prime Minister Jose Socrates could resign from his post.

"The prime minister does not want to resign, but he cannot govern against his convictions" Francisco Assis, Socialist bench leader said after a late night meeting,



The new set of proposed measures calls for government spending and pension cuts.

The Socialists have only 97 of the parliament's 230 seats with no one else on their side. All opposition parties have indicated that they plan to vote against the package, including the Social Democrats -- the main opposition group.

For the package to pass, at least 116 votes would be needed.

"The single-currency may face additional headwinds ahead of the EU Summit later this week as policy makers in Portugal struggle to meet on common ground," Daily FX currency analyst David Song warned in a report.

On March 15, Portugal's long-term government bond ratings was downgraded to A3 from A1 and assigned a negative outlook by Moody's on uncertainty over how quickly the country's able to improve its competitiveness and reduce its trade imbalances.

The country has about EUR4.23 billion, or approximately $5.98 billion, in loans due next month.


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was falling 0.4% to $140.79 in late morning trading.

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-- Written by Andrea Tse in New York.

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