Eurozone leaders have agreed to set up a crisis fund for all 16 currency partners among a spate of moves to tackle a "state of emergency" before nervous markets re-open after the weekend.
The 16 heads of the countries that share the euro currency said they want to build an emergency fund for countries targeted by powerful bond markets, after the region's debt mountain sent global bourses tumbling and triggered alarm from the US to Asia.
The leaders, meeting in Brussels, also agreed to impose new curbs on speculators blamed for sustained and deliberate attacks.
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Stabalisation fund
German Chancellor Angela Merkel said that the "stabilisation" fund would send "a very clear signal" to market speculators to back off, with Belgium's outgoing premier Yves Leterme saying the mechanism would be ready by "the end of the weekend."
A decision to "accelerate" public deficit reduction plans and "reinforce" rules limiting room for manoeuvre on broken budgets came after they concluded a much-vaunted deal to loan debt-addled Greece 80 billion euros ($A114 billion) over three years.
A meeting of all 27 European Union finance ministers, tasked with setting up the fund worth scores of billions of euros, was hastily arranged for Sunday in Brussels to deal with what French President Nicolas Sarkozy called a "systemic crisis."
Crisis beyond Greece
The leaders acknowledged, during their late-night crisis summit at the EU headquarters in Brussels, that the scale of the problem had gone way beyond Greece.
Italian premier Silvio Berlusconi told his peers that the 11-year-old shared currency area was in a "state of emergency" and exceptional measures were required.
What began as concern over fraudulent financial reporting in Athens, and escalated to deadly riots in Athens against austerity measures, has now turned potentially into a stand-off between euro nations and markets that have been resolutely unimpressed by EU action to-date.
Greek premier George Papandreou said the talks "re-confirmed that the need to safeguard the eurozone goes beyond Greece's problems."
The decisions came after the United States, Japan and Canada relayed their growing concerns, via the G7 forum, to France, Germany, Italy and non-eurozone Britain, which is itself heavily indebted.
Strong policy needed: Obama
US President Barack Obama himself spoke with German Chancellor Angela Merkel, and called for a "strong policy response" extending to the wider "international community."
Obama's Treasury Secretary Timothy Geithner meanwhile conducted the G7 conference-call, Dow Jones Newswires reported, as fears spread that a domino effect spinning out from Athens could ultimately threaten global economic recovery.
Sources stressed that talks on an idea for the European Commission to pour up to 70 billion euros ($A99 billion) into a reserve pool would require the European Central Bank's agreement, given its politically independent status.
ECB chief Jean-Claude Trichet said the summit's outcome was "excellent," but underlined: "I don't want to make any comment, this mechanism is the responsibility of the EU council (of leaders) and of the European Commission."
Currently 13 of the 16 currency partners are under excessive deficit surveillance, having breached set guidelines.
Legal hurdles
Parliamentary and legal manoeuvre needed to sign off on an unprecedented 110 billion euros ($A156 billion) bailout for debt-laden Greece, backed by the IMF, were largely completed in advance of the talks in Brussels.
However, Australian Prime Minister Kevin Rudd said markets had already judged Greek bailout action "inadequate" after stocks plummeted in Asia and on Wall Street, the euro plumbed a 14-month low against the US dollar and Japan said it would need to plough more than $US20 billion ($A22 billion) into shaken Asian financial markets.
The moves come amid predictions from leading global economists that the currency union could collapse - a view reinforced when Slovenia and Slovakia, two of its newest members, said countries that violate rules should be expelled.
