The president of the European Commission has issued a stark warning to Germany that eurobonds could be the price of preventing a break-up of the single currency.
Jose Manuel Barroso, addressing the European Parliament, said Europe would "soon present options" for the introduction of a common European debt union.
Stock markets across Europe rose following Mr Barroso's speech yesterday as investors interpreted it as a sign that leaders are prepared to do what is necessary to save the euro.
But any move for bonds underwritten by all 17 nations in the eurozone looks set to run into opposition from the German Chancellor Angela Merkel.
Last month, Ms Merkel described eurobonds as "exactly the wrong answer".
And her Foreign Minister, Guido Westerwelle, said: "We are opposed as far as the instrument of eurobonds is concerned because we believe you can't fight debt in Europe by making it easier to take up debt."
Mr Barroso's call came as leading EU finance officials warned ministers that Europe faces a fresh freeze in lending unless a "vicious circle between sovereign debt, bank funding and negative growth" can be broken. They highlighted a sense of alarm in European capitals about the financial crisis which they fear could cause the system to collapse.
Mr Barroso stressed euro-bonds "will not bring an immediate solution for all the problems we face", and accepted that their introduction would probably require a new EU treaty. But the President insisted that "deeper integration is part of the solution".
Ms Merkel and the French President, Nicolas Sarkozy, held a conference call with their Greek counterpart, George Papandreou, yesterday evening, to discuss Athens's progress on reducing its deficit.
Fears that Greece could be about to renege on its agreement and embark on a disorderly default on its €350bn of borrowing have been driving debt and equity markets down since last week.
A spokesman for the Greek government confirmed last night that the country would stay in the eurozone.