Speaking in Brussels on Friday, EU Commission President Jose Manuel Barroso emphasized the need for EU member states to agree on a financing mechanism for Greece, after Athens said it might turn to the International Monetary Fund (IMF) for help.

No eurozone state has ever been bailed out by the IMF, and some states fear that the status of the bloc could be weakened if Greece takes that route.

"We cannot protract the situation any longer," said Barroso. He announced that the commission was prepared to propose an emergency plan for Greece on the basis of "coordinated bilateral loans."

The heads of 27 EU member states are set to meet in Brussels next Thursday and Friday to discuss long-term economic strategy. However, the Greek problem is likely to dominate the summit unless euro-zone states find a solution quickly.

German opposition

Germany opposes an EU bailout for debt-stricken Greece, but has said it may be open to the possibility of an intervention by the IMF.

"The government has not excluded IMF aid," said German government spokesman Ulrich Wilhelm. "Each country can decide on its own whether to request IMF aid."

The Netherlands, Italy, and Finland have also said they are open to some degree of IMF aid. But France continues to say Greek problems should be handled within the eurozone.

Greece's financial credibility crashed last fall after the newly-elected government revealed that its predecessor had massively understated its budget deficit.

smh/AFP/Reuters
Editor: Stephanie Siek