The crisis gripping the core of the eurozone worsened on Friday, ramping up debt risks for Italy and Spain, pushing Greece to call for urgent action and feeding market alarm that recession threatens.
The rising pressure forced some top EU leaders to take time from their summer holidays to focus on the crisis in a wider global context of alarm about flagging growth.
The possibility of the creation of common eurobonds, until now taboo, is in the air.
German Chancellor Angela Merkel, French President Nicolas Sarkozy and Spanish Prime Minister Jose Luis Rodriguez Zapatero were to hold urgent telephone talks, the French government said.
Greek Prime Minister George Papandreou urged that his country's second bailout to be nailed down "now."
Spanish Prime Minister Jose Luis Rodriguez Zapatero has already suspended his holiday to fight the crisis.
European Union Economic Affairs Commissioner Olli Rehn rushed back to Brussels to give a press conference at about mid-day on the crisis.
After European Commission President, Jose Manuel Barroso, worried markets on Thursday with a message "we are no longer managing a crisis just in the euro-area periphery", Rehn stepped in to steady the ship in a BBC radio interview.
Barroso also said it was urgent to re-examine "all elements" including the size of eurozone rescue funding resources -- given that bailouts for Spain and Italy would be far bigger than rescues so far.
Rehn said that Europe had to come up with a "credible and respected" European Financial Stability Facility (EFSF), already involved in bailouts for Ireland, Portugal and the second Greek rescue.
"It is now essential to speed up the implementation and the approvals in the member states," he said.
Rehn's services will publish next month a new plan for eurozone states to be able to issue jointly-backed sovereign 'eurobonds,' he also said.
The Greek rescue rushed out on July 21, worth 160 billion euros ($226 billion), was intended also to stop contagion and calm the crisis, but much detail and application was left until later.
It included the involvement of private investors which has made them wary of holding on to bonds in other threatened eurozone countries.
The rescue announcement has failed to calm markets, and the crisis is now affecting core countries, mainly Italy, but also France for which the borrowing risk compared to German borrowing rates, is showing a record high gap.
Stocks have been weak for several days but in the last 24 hours they have plunged largely also because of weaknesses in the US economy, wiping hundreds of billions of dollars from share values worldwide, accelerating prospects of a global downturn or even double-dip recession.
Moneycorp said in their note to investors: "Barroso’s comments rattled the markets as investors interpreted this as an admission that the plans to resolve the European debt crisis are too complex and incomplete."
They added that European Central Bank (ECB) President Jean-Claude Trichet "also acknowledged yesterday that there is a 'particularly high' level of uncertainty about the economic outlook.
"This causes great concern for investors and in particular those that lend to banks."
At ING bank, analyst Alessandro Giansanti also said that Trichet's comments on the fragility of growth had affected the bond market, and that the gap between French and German borrowing rates "starts to become a concern."
The ECB is resuming bond-buying after a hiatus going back months, and a Belgian member of the central bank's management told media here that this would include Italian and Spanish debt.
In Greece, Papandreou said it was time to deliver on promises.
"The decisions having been taken by the leaders, the appropriate European institutions as well as member-states should proceed now to action and, in particular, the national parliaments, where that is necessary," he said in his letter to Barroso.
Papandreou echoed concerns by Barroso that markets are sceptical of the eurozone's systemic capacity to cope.
The spread or difference in the rate of return on Spanish 10-year government bonds and the benchmark German bond, the strongest in the eurozone, hit another record on Friday at 417 basis points (4.17 percentage points) and 416 basis points for Italian debt in early deals.