Europe's rich countries pushed Portugal to make deeper-than-planned budget cuts in the heat of an election campaign in exchange for an emergency aid package estimated at €80 billion.

Portugal bowed to intense pressure from financial markets and its European partners this week and became the third euro zone country after Greece and Ireland to request financial help from the European Union and the International Monetary Fund.

In an unprecedented intervention in national politics, euro-area finance ministers said Portugal can win relief by mid-May as long as it makes cuts that go beyond measures that failed to pass parliament in March and led to the government's downfall.

"We stand ready to negotiate immediately this ambitious program, which should comprehend an ambitious fiscal adjustment, structural reforms," said European Central Bank president Jean-Claude Trichet, adding that it should fully safeguard financial stability in Portugal and the euro area.

Last month's austerity plan "is a starting point", European Union economic and monetary commissioner Olli Rehn told reporters after a meeting of European finance officials today in Hungary. "It is indeed essential in Portugal to reach a cross-party agreement ensuring that such a program can be adopted in May."

EU, European Central Bank and IMF officials will head to Lisbon next week to start negotiations over the package, with the goal of wrapping it up on May 16th, three weeks before Portugal's June 5th election.

"The package must be really strict because otherwise it doesn't make any sense," said Jyrki Katainen of Finland, one of the euro region's six AAA states. "The package must be harder and more comprehensive than the one the parliament voted against."

Portugal's bid for emergency aid opens what European leaders say will be the final chapter in the debt crisis that erupted in Greece last year, spread to Ireland and triggered speculation that the 17-nation euro area might not survive in its current form.

Mr Juncker said the group didn't discuss the terms of Ireland's bailout package during a meeting today.

French economy minister Christine Lagarde said today she expected Portugal to outline specific steps that would restore confidence in an economy that is among the least competitive in the currency zone.

Portuguese prime minister José Sócrates resigned late last month after parliament rejected a new round of budget austerity meant to help the country meet its deficit reduction targets for 2011.

He is continuing to serve in a caretaker capacity until new elections are held on June 5th. The main opposition party has backed the request for aid, but negotiations on an economic adjustment programme - a precondition for assistance - are likely to be tough as cross-party consensus will be needed.

"We need a commitment of the country not only a commitment of the government," acting Portuguese finance minister Fernando Teixeira dos Santos said. "I think we have to be committed to reaching an agreement as soon as possible."

Ministers tried to drive home the message in Budapest that the contagion that has spread like a virus across the region's southern periphery would not hit Portugal's larger neighbour Spain, which has scrambled to reform its labour market, pension system and savings banks this year to avoid a similar fate.

Spanish economy minister Elena Salgado said a bailout for her country was "completely out of the question" and Mr Rehn told reporters he was sure Spain would not require assistance.

For now at least, markets seem to agree. The euro rose to a 15-month high against the dollar today, following a rise in official euro zone interest rates a day earlier.

The spreads between Spanish bond yields and those of German benchmarks - a key measure of investor confidence in Spain's finances - have changed little since Portugal announced on Wednesday it would seek aid.
 
The spreads on 10-year bonds hovered at around 1.8 percentage points this morning.

But the rise in the euro undermines the competitiveness of the euro zone's weaker economies and investors continue to look closely at Spain's weaknesses - a banking sector weakened by the property crash and its struggle to generate growth.

Under EU rules, the European Commission, European Central Bank and the IMF "troika" must send a mission to a country requesting financial aid to establish the parameters of the support programme. That would then be put into a memorandum of understanding.

Additional reporting: Reuters, Bloomberg