With the amount of interest that Portugal is having to offer to get investors to buy its bonds rising to unsustainable levels, Lisbon is appealing for urgent and effective support from the European Union – but not a bailout.

At conference in Lisbon Prime Minister Jose Socrates said the sovereign debt crisis is the EU’s biggest challenge.

Finance Minister Fernando Teixeira dos Santos said Europe must take swift tough action to protect peripheral economies against attacks from the investment markets. If not, he said, Portugal’s efforts to cut its budget deficit and implement painful reforms would count for nothing.

The Portuguese want action at an EU summit in three weeks time to convince investors of European resolve.

If that does not happen they fear the markets may launch another sell-off of euro zone sovereign debt hitting Portugal hard and forcing it to take a bailout, as Greece and Ireland already have.

Portugal’s pleas may fall on deaf ears, there are growing doubts about Germany’s willingness to support expanding or reconfiguring the bloc’s rescue fund enough to calm investors and reduce the pressure.

Ricardo Espirito Santo Salgado, who heads Portugal’s second largest listed bank, BES, criticised European indecision over how to combat the debt crisis.

He said lack of clarity over decisions to be taken at coming European meetings were behind the recent jump in the euro zone periphery’s bond yields, including Portugal’s.

“After a correction in sovereign spreads and credit at the start of the year, especially on expectations of a reform of financial stabilisation and budget coordination mechanisms, the uncertainty over the decisions by the European Council in March has contributed to a new rise in risk premiums,” he said.

Portugal’s borrowing costs have risen sharply over the last year and are now hovering near Euro-lifetime highs. The benchmark 10-year bond was at almost 7.6 percent on Monday.