For his part, EU Council head Herman Van Rompuy downplayed the importance of a technicality on Serbia. The small print says EU leaders, not foreign ministers, must sign off a European Commission negotiating mandate before the talks take place. The detail raises the risk that leaders might punish Serbia if it backslides on a deal to mend relations with Kosovo. But Van Rompuy noted: "This is normal practice that we are following. When the European Council confirms the mandate, it will not add any additional conditions."
The summit took place just 48 hours before Croatia celebrates EU accession. Barroso and Van Rompuy are going to Zagreb for festivities on Sunday and to Belgrade and Pristina on Monday.
"You are most welcome, Zoran, in this club," Van Rompuy told Croatian leader Zoran Milanovic earlier on Friday.
Milanovic said: "I am sort of emotional at this moment … Twenty two years ago it looked as though everything would be resolved in a few weeks' time. Then the war happened."...He added: "We will do everything and anything to help and assist our neighbours who are not yet in the club." The adhesion of the small country will see the EU's population rise from 502.4 million to 506.8 million.
Croatia's EU commissioner is to handle consumer affairs. Zagreb also gets seven votes in the EU Council and 12 MEPs, while the commission is hiring 249 Croatian officials, including a director general.
The French and German leaders said next to nothing on Croatia in their press briefings. In a minor blip, Germany's Angela Merkel last week cancelled her trip to Sunday's celebrations in Zagreb.
Her people said it is due to agenda reasons. But Croatian and German media say it is linked to Zagreb's refusal to extradite a Yugoslav-era spy wanted for murder. In another blip, which highlights Croatia's struggle to curb high-level corruption, Finnish prosecutors on Friday said they will try three people for bribing Croatian officials in an arms deal. Meanwhile, grim economic figures will see Zagreb fall foul of EU benchmarks the minute it joins. Its deficit is to hit 4.7 percent this year, breaking the EU's 3 percent rule, while its debt is heading for 62.5 percent, compared to the EU's 60 percent norm. After four years of recession, unemployment is 18 percent, rising to 51 percent for the under-25s. Milanovic told French daily Le Monde on Friday it is "absurd" to compare Croatia with bailout country Greece.
Noting his government's mix of left-wing and liberal policies, he added: "At the risk of sounding pretentious, I would say our vision is the Scandinavian [economic] model."
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The FTSE fell 74 points, or 1.2%, while the German Dax and French CAC tumbled 1.5% as markets digested rumours that the resignation of Portugal's finance minister and foreign minister could be followed by more colleagues. Market unease over the health of the world economy was exacerbated by the political drama unfolding in Egypt and a weakening in China's growth.
The Portuguese ministers quit the coalition government this week in a row over the ruling party's handling of the country's economic plight, amid fears that they will be followed by two ministerial colleagues who are members of the junior coalition partner. If that happened, observers fear that they could take down the centre-right government. However, the junior coalition party, CDS-PP, said this evening that there would be no more ministerial resignations.
European commission president José Manuel Barroso, a former Portuguese premier, said the indebted nation risked damaging its hard-earned financial credibility after two years of closely following its €78bn (£66.4bn) bailout programme, co-ordinated by the International Monetary Fund, European Union and European Central Bank.
"This delicate situation requires a great sense of responsibility from all political forces and leaders," he said.
The government's future hung in the balance after president Aníbal Cavaco Silva's office said he would meet the leader of the main opposition Socialists and other parties to discuss the deepening schism in the coalition. Under the constitution, he has the power to dissolve parliament and can invite opposition parties to form a government.
Speaking in Berlin, where he was attending the EU summit on youth unemployment, prime minister Pedro Passos Coelho reiterated that he had no plans to resign. He said: "I am confident that we will be able to surpass this difficulty … I hope this internal crisis can be overcome very quickly."
With no solution imminent, the euro fell and the interest rate on Portuguese government debt soared past the 7% level – where debts are considered unsustainable – to hit 8.1% at on point, before settling back at 7.5%. The PSI 20 stock index in Lisbon fell by 5%, led by sharp losses of over 10% in bank shares
Stocks in Lisbon fell 5.2pc after Paulo Portas, who leads the smaller People's Party in the coalition government, quit on Tuesday over the appointment of a new pro-austerity finance minister. Mr Portas said Vitor Gaspar's replacement, Maria Luis Albuquerque, would offer "mere continuity" of the country's deficit-cutting plans.
The yield on Portuguese ten year government bonds jumped 0.75 percentage points to 7.5pc, towards levels seen before its 2011 bail-out. The split over austerity also wiped £19bn off the value of Britain's leading share index, the FTSE 100, which fell 1.2pc to 6,229.87, and triggered a sell-off in Italian and Spanish debt.
President Anibal Cavaco Silva met with party leaders for emergency talks, while the People's Party also met to decide whether it would continue to support the government. Without the support of Mr Portas's party, which holds 24 seats in the 230-seat parliament, the Social Democratic party, which holds 108 seats, will lose its majority.
"The Portuguese government is on the rocks," said Raoul Ruparel, head of economic research at Open Europe. "Although Portugal has financing in place until the end of the year, it is still subject to stringent reviews. This suggests political turmoil could cause serious problems when it comes to releasing this financing which Portugal desperately needs over the summer."
However, prime minister Pedro Passos Coelho said he didn't see the risk of the government losing its majority. "I am confident that we will be able to surpass this difficulty," he said on Wednesday.
As many have said for long enough, this world of debt is now fast nearing its inevitable collapse.
A point when no amount of props will be able to hold it up any longer.
Reality point.
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