|European Commission President Jose Manuel Barroso says Greek recovery is in Europe's interest [Reuters]
Eurozone leaders must find a solution to Greece's debt crisis or the global economy will pay the price, the European Commission president has said.
Jose Manuel Barroso delivered the message on Wednesday as the 17-nation eurozone prepared for an emergency meeting to find a suitable settlement on Greece.
"Nobody should be under any illusion: the situation is very serious. It requires a response, otherwise the negative consequences will be felt in all corners of Europe and beyond," he said.
French President Nicolas Sarkozy met German Chancellor Angela Merkel in Berlin earlier on Wednesday for what could be decisive talks before the summit which is scheduled for Thursday in Brussels.
Barroso said that the solution must provide clarity on measures to ensure the sustainability of Greece's public finances. He said the issue has highlighted doubts about the flexibility of existing European bailout funds.
In what sounded like veiled criticism of Merkel, Barroso said it was time for leaders to say "what they can do and what they want to do. Not what they can't do and won't do".
Divisions over how best to tackle the Greek debt problem remain. Merkel has played down the possible impacts of Thursday's summit, saying it is not politically responsible to agree to a hasty solution for such a huge problem.
Her foreign minister told Al Jazeera that a deal will be made before the meeting. "It is absolutely clear that the euro is our destiny and our desire. I think we will have a good result," Guido Westerwelle said.
Merkel wants private investors to contribute to any aid package by rolling over any loans Greece may own.
Credit rating agencies
The European Central Bank has disagreed, arguing that any rollover would constitute a default in the eyes of the international credit ratings agencies and, as such, would undermine investor confidence and the euro itself.
A second aid package for Greece is expected to be roughly the same amount as the $156bn package agreed on in May 2010.
Both the French and German leaders know how important it is to agree on an effective solution to sustain a package for Greece.
"We are very confident that there will be a good and sensible solution," Merkel's spokesman said, stressing that private sector participation remained a key German priority.
Alain Juppe, the French foreign minister, also said he was "sure we will find an accord", adding that contrary to media reports, "there is a very broad convergence of views" among euro zone capitals.
Still, Paris signalled apparent frustration at Berlin's continued opposition to common euro zone bonds, a step which European Socialist leaders and many economists argue would provide a long-term solution to the debt crisis.
Despite Wednesday's cautious market optimism, many analysts fear the fifth European summit this year will produce half-measures that, at most, will buy a couple of months before calls for a another Greek debt restructuring strategy will be made.