* Euro zone ministers to discuss Portuguese bailout bid
* No decisions likely before EU/IMF mission to Portugal
By Jan Strupczewski
BUDAPEST, April 8 (Reuters) - Euro zone finance ministers will discuss Portugal's bailout plea on Friday, including how much it needs and what reforms it could do in return, but no firm decisions are likely yet, euro zone sources said.
Portugal on Wednesday became the third euro zone country after Greece and Ireland to ask for financial help from the European Union and the International Monetary Fund after its borrowing costs rose to unsustainable levels following the collapse of the government of Jose Socrates in March.
Euro zone finance ministers meet informally in Budapest to discuss the response to the sovereign debt crisis, but the focus of the relatively short meeting will be on Portugal.
"The ministers are likely to listen to what the Portuguese finance minister has to say about the economic and political situation," one euro zone source involved in the preparation of the meeting said.
"They will then probably ask the European Commission, the European Central Bank and the IMF to send a mission to Portugal to establish the modalities of the bailout," the source said.
Under EU rules, such a mission to a country requesting financial aid is necessary to establish the parameters of the support programme, which would then be put into a memorandum of understanding signed by Portugal and the European Commission.
Two other euro zone sources, however, said the ministers were likely to have a preliminary talk on some of the key elements.
"They are likely to discuss how much, roughly, Portugal needs, when, and what it might do in terms of reforms," a second euro zone source involved in the preparations said.
The source said the amount of the bailout was likely to be in the higher end of the 60-80 billion euros, possibly 85 billion euros, but it was one of the issues that a mission to Portugal would establish.
REFORMS
German Finance Minister Wolfgang Schaeuble, mindful of the concerns among taxpayers in affluent Germany already bearing the brunt of existing bailouts for Greece and Ireland, pointed out that such aid could only be granted in return for tough reforms.
Calling it a "sensible and necessary step", Schaeuble said in a statement that within the current bailout mechanism, aid was only available in return for "an adjustment programme".
The first euro zone source said that it was likely the EU would ask Portugal for a similar tightening package as was rejected by the Portuguese parliament in March, but with changes to accommodate the objections of the opposition.
The ministers may also discuss the interest rate that the European Financial Stability Facility will charge for its loans.
A euro zone source said on Wednesday that the interest was likely to be in line with what was legally binding at the moment of issuance.
Interest on EFSF loans is likely to fall by 100 basis points only in June, once euro zone leaders give their final approval to a package of measures to end the sovereign debt crisis.
Portugal's aid request is closely watched across Europe, especially in countries that have either already sought help -- Greece and Ireland -- or see it as a risk, such as Spain.
Euro zone officials hope the bailout of Portugal will finally draw a line under the euro zone sovereign debt crisis.
"I think Portugal was probably the last of the group of countries which were really vulnerable and the market were really sceptical whether they can survive or not," Finnish Finance Minister Jyrki Katainen told Sky News.
"And now when we see that Spain has done a good job, they have done reforms, they have done expenditure cuts and some tax raises, so Spain has regained confidence a lot," Katainen said.
"And now when we take whatever is needed to stabilise the market by helping Portugal or by putting them to the IMF-EU programme I think the situation will become calmer," he said.
The economic situation in Ireland after the latest round of stress tests of the country's financial sector will also be discussed as will reports of Greece's bigger than expected budget deficit in 2010.
The euro zone ministers will be joined later on Friday by colleagues from non-euro zone European Union countries and by central bank governors.
(Additional reporting by Tim Castle in London and Thomas Leigh, John O'Donnell and Francesca Landini in Budapest)
(Reporting by Jan Strupczewski)