Portugal: When there's no light at the end of the tunnel

In Portugal's second city, Porto, crowds throng the main shopping streets, accompanied by the smell of roasting chestnuts and the twinkle of festive lights. Bacalhau, the dried, salted codfish traditionally eaten on Christmas Day, hangs in store windows framed by hand-painted wall tiles. Tourists wander past clutching maps and cameras.

But in Matosinhos, the fishing community that adjoins Porto, residents say the impression that all is well is far from the truth. Portugal's working families are feeling the impact of austerity measures imposed following a 78 billion euro ($104 billion) international bailout in May.

The country's austerity experience may signal what lies ahead for other European neighbors if the debt crisis that has shaken global markets is not resolved.

The government says the measures are needed to restore economic stability and will pave the way for Portugal's recovery. Meanwhile, among the Portuguese people, it is still unclear if the measures will put the country back on track and if the nation will continue to accept them. Read More