The Portuguese Parliament on 13 April ratified by a commanding majority (204 of the 240 MPs) the fiscal compact treaty, signed on 2 March by 25 EU countries.
The treaty was largely the initiative of German Chancellor Angela Merkel and French President Nicolas Sarkozy.
Hollande maintained throughout his campaign that if elected, he would re-negotiate the treaty, arguing that relying on austerity alone would drag Europe's fragile economy into a prolonged recession. But more recently he started backing away from a radical overhaul of the treaty, indicating that if elected he would seek "add-ons" to include more pro-growth policies.
After the vote in Portugal, Hollande appears to have lost a major argument for re-negotiating the treaty – the fact that it had not been ratified. In France, a vote on the treaty is out of question before the presidential elections as the Socialists now hold a majority in the Senate.
Polls show Hollande and Sarkozy running neck-and-neck in the first round of voting on 22 April, but Hollande has a 10-point advantage in the second round on 6 May.
This is not the first time that the Portuguese centre-left has broken with the centre-left European family, which is more sceptical of the treaty agreed by all but the leaders of Britain and the Czech Republic.
In 2009, the then-Socialist government backed Portugal's José Manuel Barroso as European Commission president although he was the candidate of the European People's Party.
On 30 March the Greek Parliament has ratified the 'fiscal compact' treaty, EurActiv has learned after the publication of this article.