The Finnish elections brought a not entirely unexpected tectonic shift, but it probably falls short of a European revolution. We would expect the worst case scenario from these election to be a request for a partial renegotiations of Finland's terms of involvement with European Financial Stability Facility (EFSF). The Finnish conservatives may not even seek a coalition with the True Finns, but with the Social Democrats and a couple of small parties. Juri Katainen said he was seeking a coalition of parties that share a minimum consensus. Whether the True Finns enter parliament or not, we do not see a Finnish No.

That said, the Portuguese rescue is problematic nevertheless. Finance ministers were absolutely furious about the late Portuguese application, and some, like Anders Borg from Sweden or Jan Kees de Jager from the Netherlands did not hide their intense frustration at the recent informal Ecofin in Hungary. We expect the tension to persist for a number of weeks. It looks as though the country's liquidity will run out before any official EU/IMF can be dispersed. And there is at present no willingness to extend a short-term loan. The two statements are of course contradictory, unless you accept the principle of a default, so we would assume there will be some very short-term interim finance in place. But this is far from guaranteed.

The critical point is the beginning of June. The European Commission has calculated that the first tranche of the EFSF package of around €9bn would have to arrive in Lisbon by June 15. This is not a technical problem. The EU/IMF mission has started talks in Lisbon today, and finance ministers hope to reach a final agreement by mid-May. EFSF und EFSM will need about two weeks to place their own bond issues on the market.