Thousands of people in Lisbon had peacefully protested for hours, on Monday.
They were demanding that Prime Minister Pedro Passos Coelho cancel the newly approved budget.
By Monday evening protesters began setting fires, and then clashed with police when they tried putting them out.
Tear gas was used to clear the crowd from the area outside of the National Assembly.
The government approved the new budget, early Monday, that is one of the harshest in history for the country, and includes heavy tax increases, pension cuts, and other ways the government hopes to save money.
Portugal is working hard to rescue it's failed economy, they've already received over a hundred billion dollars in bailout money from the European Union and the International Monetary Fund.
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