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JEREMY HOBSON: Today another ratings downgrade in Europe. This time, it's Portugal. Moody's has dropped Portuguese debt by two notches. That means it'll be more expensive for the country to borrow money on the very day it asks investors for more than a billion dollars in loans.

Marketplace's Stephen Beard joins us now live from London with more. Hi Stephen.

STEPHEN BEARD: Hello Jeremy.

HOBSON: Well, how serious is this for Portugal?

BEARD: It just adds to Portugal's woes. As you say, it's going to make it more expensive for the government to borrow. Moody's just doesn't believe that Portugal's got its debt problem under control. And that's a reasonable assessment. The government just unveiled its latest austerity measures to cut the deficit -- big cuts in welfare and health care spending. And they went down like a lead balloon. The main opposition party said they'll oppose them, and the government, which is a minority government, could actually fall over this. A lot of trouble in Portugal.

HOBSON: And not just Portugal Stephen, we heard recently about Spain getting a downgrade, and Greece. Is this thing under control yet?

BEARD: Well, generally, yes. I mean it does look actually as if Portugal is going to have to be bailed out. But the eurozone can certainly handle that. Generally it does look as if the eurozone is beginning to get to grips with the debt problem. They made some recent decisions on the bailout fund. But like everyone else, we're now facing what could be a perfect storm with the Japanese disaster and the Arab unrest putting upward pressure on the oil prices. So if these tip the European economy back into recession, the eurozone debt problem will get much worse.

HOBSON: Marketplace's Stephen Beard in London, thanks Stephen.

BEARD: OK Jeremy.

Follow Jeremy Hobson at @jeremyhobson