Eurozone ministers have agreed on measures to give their rescue fund more firepower on global markets in an attempt to ease the pressure on their embattled euro currency.

The 17 ministers meeting in Brussels agreed on options to give the rescue fund more leverage power and build up resources to help bigger troubled European Union members such as Italy and Spain.

Earlier Tuesday, the ministers threw a lifeline to Greece, approving an €8 billion ($11 billion Cdn) rescue loan so it would not run out of money in the next few weeks.

Without that money, Greece would have run out of cash before Christmas, leaving it unable to pay its employees or provide services. Two officials in Brussels reported the development, speaking on condition of anonymity while the meeting was still going on.

The installment is part of a €110 billion ($151 billion) bailout package from eurozone nations and the International Monetary Fund that has kept Greece afloat since May 2010. The new cash came after the EU demanded, and received, letters from top Greek political leaders pledging their support for tough new austerity measures.

The move came as Italy's borrowing rates shot up above seven per cent, an unsustainable level in the long term and a shocking increase over rates just last month.

The finance ministers discussed ideas that until recently would have been taboo: countries ceding additional budgetary sovereignty to a central authority — EU headquarters in Brussels.

Italy too big to save

Strengthening financial governance is being touted as one way the eurozone can escape its debt crisis, which has already forced Greece, Ireland and Portugal into international bailouts and is threatening to engulf Italy, the eurozone's third-largest economy.

Italy is too big for Europe to rescue. If it were to default on its €1.9 trillion ($2.61 trillion) debt, the fallout could break up the currency used by 322 million people and send shock waves throughout the global economy.

The task of agreeing on grand changes that might save the eurozone from splitting up will likely fall to the European presidents and prime ministers attending a Dec. 9 summit in Brussels.

German Chancellor Angela Merkel reiterated her support for changes to Europe's current treaties in order to create a fiscal union with stronger binding commitments by all euro countries.

"Our priority is to have the whole of the eurozone to be placed on a stronger treaty basis," Merkel said Tuesday. "This is what we have devoted all of our efforts to; this is what I'm concentrating on in all of the talks with my counterparts."

Merkel acknowledged that changing the treaties — usually a lengthy procedure — won't be easy because not all of the European Union's 27 nations "are enthusiastic about it." But she dismissed reports that the eurozone, or smaller groups of nations, might go ahead with their own swifter treaty.

'I fear German power less than I am beginning to fear German inactivity.'—Radek Sikorski, Poland's foreign minister

Countries outside the eurozone heaped on the pressure, fearing drastic consequences if the euro were to fail. Bank lending would freeze worldwide, stock markets would likely crash, European economies would go into a freefall and the U.S. and Asia would take a big hit as their exports to Europe collapsed.

"I will probably be the first Polish foreign minister in history to say so, but here it is," Radek Sikorski said in Berlin. "I fear German power less than I am beginning to fear German inactivity. ... The biggest threat to the security and prosperity of Poland would be the collapse of the eurozone."

Eurozone countries have enormous debts that must be refinanced — with €638 billion ($876 billion) coming due in 2012, of which 40 per cent needs to be refinanced in the first four months alone, according to Barclays Capital.

The 17 ministers are also discussing jointly issuing so-called eurobonds — an all-for-one, one-for-all way of having the different countries guaranteeing one another's debts.

Right now each nation issues its own bonds, meaning that while Italy pays above seven per cent, Germany pays about two per cent. Having stronger countries like Germany stand behind the general European debt would lower Italy's borrowing rates and perhaps help it avoid a debt spiral toward bankruptcy. At the same time, it would raise Germany's borrowing costs.

An even more radical solution was proposed Tuesday by the head of Germany's exporters association: urging Greece and Portugal to leave the eurozone. BGA President Anton Boerner told The Associated Press that's the only way those two nations can spur the growth needed to overcome their crippling debts.

Analysts were doubtful that new cash for Greece and mere talk about the stability fund would bring the financial relief that Europe craves.

"The marginal impact of these bits of 'good news' should be limited at best and investors will still cast a nervous eye towards this week's bond auctions," said Geoffrey Yu, an analyst at UBS.