Bailout plan

Elena Salgado, the Spanish finance minister, said the ministers were determined
to safeguard the currency used by 16 of the EU's 27 member states.

Under the plan, the EU will make between 60 and 70bn euros available to any euro-zone country that suffers a debt crisis. 

in depth
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  Sacrifice and suffocation for Greece
  The humiliation of Greece
  People & Power: The bankrupt state
  Inside Story: A financial bailout for Greece?
  Counting the Cost: Greece is the word
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  Greece hit by anti-austerity rally
  Wake-up call for Greek economy
  Fears grow over debt crisis

Current EU rules ban bailouts for countries that use the Euro, but the European Commision is believed to be considering extending an existing clause in the Lisbon Treaty which allows financial aid to non-eurozone countries.

An EU diplomat on Sunday told the AFP news agency that a type of "bank" would be set up with unused funds from the bloc's budget, which would then serve as "base capital on which to borrow 60-70bn euros (up to $90bn) on the bond market".

Guarantees offered by member states would help keep the interest rates low, the diplomat said.

Some EU countries want the measures agreed before financial markets open on Monday to prevent the continued spread of fears over the reliability of the euro.

But not all EU countries use the Euro and those with their own currencies will not support the creation of the so-called "stabilisation fund" because they will never be able to draw from it.

The UK, facing its own debt problems, appeared to reject the plan out of hand. Speaking before the meeting, Alistair Darling, the UK finance minister, said that there were limits to help that London can be expected to provide to the 16 eurozone countries.

"We need to show again today that by acting together we can stabilise the situation, we do not want to jeopardise the recovery that is slowly taking place. And we will play our part in that," he told reporters. "But when it comes to supporting the euro, obviously that is for the eurozone countries."

Bankers' meet

Sunday's hastily arranged meeting of all 27 EU members is an indication of the seriousness with which the potential spread of the Greek crisis is being viewed.  

Spain and Portugal are beginning to show the same signs of trouble that Greece first experienced three months ago.

The meeting came as the world's central bankers gathered in the Swiss city of Basel.

Michel Barnier, Europe's financial services commissioner, said "you can count on the central bank to play its part" in the plan.  

The bankers were meant to discuss such issues as the end of special measures taken during the recent global financial crisis, as well as longer-term issues surrounding monetary system reforms.

But their meetings may now turn into a crisis sitting as Greece's debt woes spread beyong its borders, pushing down Europe's single currency and world stocks sharply down.

As the two meetings proceeded, Barack Obama, the US president, telephoned Nicholas Sarkozy, his French counterpart, to discuss the situation.

"President Obama spoke with President Sarkozy as part of his ongoing engagement with European leaders about the economic situation there," a White House statement said. "They agreed on the importance of Europe taking resolute action to build confidence in the markets."

Meanwhile, the IMF's executive board has approved a $38bn loan for Greece, the fund said in a statement.