Portuguese bond yields surged to more than 8 percent as a government crisis prompted investors to shun the bailed-out country, raising concerns about another flare-up in the euro zone debt saga.

The resignation this week of two key ministers, including Finance Minister Vitor Gaspar who was the architect of its austerity drive, tipped Portugal into a turmoil that could derail its plan to exit its bailout next year.

Portuguese bond yields surged to levels near which it was forced to seek international aid two years ago. The sell-off spread to Italian and Spanish debt markets, but was not as pronounced there.

According to Elwin de Groot, senior market economist at Rabobank:

This could quickly bring Portugal into a situation where there will have to be decisions about whether there is another extension of the support programme.

It will also bring back discussion on whether the ECB has any interest in trying to prevent further increases in Portuguese yields and whether or not it will be willing to do so.