Greek Prime Minister George Papandreou is not ruling out taking legal action against U.S. investment banks for their role in creating the spiraling Greek debt crisis.

Papandreou told CNN on Sunday that "I wouldn't rule out" going after the U.S. banks.

The government, as well as many Greeks, has blamed international banks for fanning the flames of the debt crisis with comments about Greece's likely default.

The Greek leader also says a parliamentary investigation will soon examine the rapid swelling of Greece's debt and the country's banking practices.

European bailout only buys time

Meanwhile, German Chancellor Angela Merkel and a European Central Bank official have said the recently approved $1-trillion rescue loan package only buys indebted eurozone countries more time, but doesn't resolve the continent's underlying debt problem.

The market turmoil will only calm down if the 16 member states of the eurozone reform their economies and reduce their deficits, ECB chief economist Juergen Stark told the Frankfurter Allgemeine Sonntagszeitung newspaper on Sunday.

Stark was quoted as saying about the loan package that: "We bought time, not more than that." The euro was not in danger "but in a critical situation," he added.

Merkel on Sunday defended the loan package as the right step to stabilize the currency, but she also acknowledged it only bought time.

"We didn't do more than buy time to get the differences in competitiveness and budget deficits of eurozone countries in order," she said at a conference of the Confederation of German Trade Unions in Berlin.

In the past few days, Merkel has repeatedly urged eurozone countries to trim their budget deficits. She also called for greater co-operation in financial and economic policy across Europe to ensure the currency's long-term stability.

In the wake of Greece's debt crisis, the euro has come under intense pressure because of fears about problems spreading to other heavily indebted eurozone countries. The euro sank to near a four-year low against the U.S. dollar on Friday in late New York trading, buying $1.2355 US.