ANALYSIS:Portugal's sponsors have called for agreement on a "full-blown" rescue plan by May 16th

EU FINANCE ministers want to conclude a difficult bailout deal for some €80 billion with Portugal within six weeks. At the same time, they believe they have now isolated the sovereign debt crisis and contained the threat of contagion.

That theory will be put to the test in the coming weeks and months. At a two-day informal meeting near Budapest, however, Spain’s economy minister Elena Salgado confidently declared that Portugal’s rescue will be the last. She could hardly do otherwise, but there is some confidence that progress is at last being made.

Much still depends on the force of looming stress tests on Europe’s major banks and the political response to them. That is the next step.

For now, however, attention centres on Portugal. While EU ministers provided some clarity on their plans for the rescue, the response of a domestic political class which is in election mode will be critical.

Talk of bilateral or bridging loans to ease the immediate strain on Lisbon before polling day has been banished. Instead, Portugal’s sponsors have called for agreement on a “full-blown” rescue plan under established protocols by May 16th. To this end they want “all political parties” in the country to reach agreement swiftly on a swingeing adjustment programme.

If policy differences are a key element of any election battle, Portugal’s leaders are under pressure to adopt identical policies as they campaign for votes. They inevitably blame each other for the country’s troubles as they campaign for the June 5th election. Now they are being urged to join hands. It’s a huge ask but there may be no other way out of the debt cul de sac.

Even though economics commissioner Olli Rehn held out the prospect that the incoming government would be empowered to make “final adjustments” to the programme, there is no doubting the pressure to complete its overall shape next month.

Rehn said the austerity measures proposed by Portugal’s caretaker government last month were a good “starting point”. He recognised, however, that parliament’s rejection of that plan meant the new programme cannot be exactly the same.

What is more, other governments want Lisbon to dig deeper in return for aid. Neither is sympathy in evidence. “It takes two to tango as I always say and it’s a matter for Portugal to indicate what measures will be part of the programme,” said French finance minister Christine Lagarde.

All of this illustrates both the drastic scope of the intrusion on sovereignty in the bailout scenario and the frailty of Portugal’s present position. Fears that the country cannot repay a bond worth more than €4 billion without external aid appear well-grounded.

Portuguese state companies are also said to be under grave financial pressure.

This explains the push to do the deal in mid-May, giving the European Financial Stability Facility (EFSF) bailout fund the 10 days it requires to raise money on the markets for the rescue.

In theory at least, the deadline could also bring forward resolution of the vexed Irish interest rate question.

There is still little sign of any retreat by France on corporate tax and Minister for Finance Michael Noonan did not point to any particular progress after his meeting with German counterpart Wolfgang Schäuble.

Still, pressure to conclude all elements of the Portuguese deal next month means that the authorities will have to finalise the interest rate scheme in that package by then.

Notwithstanding the requirement for a substantial quid pro quo from Dublin, any lower interest on Portuguese loans than on those of Ireland may strengthen the Government’s moral argument. It will take more than that, however.

But the main event in Godollo was Portugal, and a distinct sense of relief from the lack of a blowback to Spain.

“The predominant view in markets is that this step ring-fences the three weaker economies in the euro area and therefore helps to avoid wider contagion,” said EFSF chief Klaus Regling.

“This view is very much confirmed when you look at the Spanish situation. The Spanish debt market was not affected ... Also on Spanish debt, there is a real market there. There is buying and selling going on while for the Greek and Portuguese debt there is no market.”

That remains the core problem. Keeping Spain on track is one thing. But safe harbour will not be reached until these countries – and Ireland – gain market support again. There’s a very long way to go yet.