Last night was like watching a scene right out of Dumb & Dumber:

"Triple-stamp, no erasies, touch blue make it true."

"No, no, no, you can't triple-stamp a double stamp!"

After telling the world for months that it would not need a bailout, Portugal's prime minister succumbed to mounting pressures from what he referred to as "prohibitive lending rates." Now the third European Union member in less than a year is seeking financial assistance from the European Central Bank.

The bailout comes as a surprise to only one country: Portugal. I had warned that the financial crisis in Europe was still a long way from being resolved last month, and now it appears that Portugal will cost the EU somewhere between $99 billion and $114 billion, based on initial estimates.

This bailout comes on the heels of two other large bailouts: Greece and Ireland. Thus far, the bailouts and subsequent austerity packages instituted in both of these countries have gone anything but according to plan.

In Ireland, with many banks now nationalized, the remaining banks still struggle with staggeringly bad loans and crushing debt loads. Bank of Ireland (NYSE: IRE) and Irish Allied Bank (NYSE: AIB) remain solvent, but only in part because the EU pumped so much money into the banking system. Fears are now growing that the initial 35 billion euros injected may not be enough.

Greece is suffering through many of the same issues. More concerning now is the impending interest rate increase from the ECB, which is trying to put a cap on inflationary pressures. For a country like Germany with 10-year rates under 3.3%, this isn't a worry, but for Greece, Ireland, and Portugal, which have 10-year bond rates of 12.7%, 9.4%, and 8.5%, respectively, any increase in rates makes borrowing money even tougher.

Portugal's request for a bailout now leaves the world's eyes on Spain. Spain has a considerably larger economy that could require a bailout larger than the combined total given to Ireland and Greece. The risk of investing in Spanish securities is everywhere. Banking giant Banco Santander (NYSE: STD), which operates out of Spain and Portugal, is trading at a mere 8.1 times next year's projected earnings with a dividend yield north of 8%. Telefonica (NYSE: TEF), a Spanish telecom powerhouse, is trading at only 8.2 times its trailing-12-month earnings, despite a dividend yield of 5.6%. Investors are simply unwilling to take any risks as the dominoes in Europe fall one after another.

For now, we can only hope that Portugal does pass stricter austerity measures, and can figure a way to get its economy back on solid ground. If Lloyd Christmas were here, I believe he'd say something like this to Portugal: "Now don't you go dying on me!"

Did the news of Portugal seeking a bailout surprise you? Do you see Spain also seeking financial assistance down the road? Share your ideas in the comments section below and consider tracking these stocks and your own personalized portfolio of companies with My Watchlist.

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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He wants to state for the record that no 1984 Sheepdogs were hurt during the writing of this article. He also would like to remind you not to forget about our friends in Japan who could use a helping hand. You can follow him on CAPS under the screen name TMFUltraLong. The Fool owns shares of Telefonica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that requires no capital injections.

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