European policymakers, stung by criticism for failing to stem the euro zone debt crisis, face the tough task of quickly stopping fallout from Greece's near-bankruptcy from spreading into the world economy.

After a weekend of being told by the United States, China and other countries that they must try harder, European officials said they would work on ways to beef up their existing 440 billion-euro rescue fund.

Deep differences remained over whether the European Central Bank should commit more of its massive resources to the rescue fund to shore up Europe's banks and help struggling euro zone member countries.

Financial markets have plunged on concerns about the ability of Europe to get a grip on the crisis.

U.S. Treasury chief Timothy Geithner, in unusually blunt comments, said the ECB should take a more central role in fighting the crisis.

The threat of cascading default, bank runs, and catastrophic risk must be taken off the table, he said in speech to the International Monetary Fund on Saturday

Europe came under fresh pressure on Sunday to ramp up its crisis response when a top IMF official said the ECB was the only player big enough to scare financial markets which have punished several euro zone countries.

However, Germany and many top officials within the ECB itself are wary about the central bank being drawn more deeply into supporting Greece and other debt-stricken states.

The ECB is the only agent that can really scare the markets, said Antonio Borges, the head of the IMF's European department at a gathering of top economic policymakers from around the world.

Greece, the country at the epicentre of the crisis, is trying to secure the latest wad of cash from international lenders next month, including the IMF, to avoid default.

Greece's Finance Minister Evangelos Venizelos, speaking to bankers in Washington on Sunday, said the country was determined to stay the course of its tough austerity plan to meet terms of its bailout package.

He complained the outside world did not understand the severity of the measures that Greece is taking by cutting pensions, salaries and public spending but he insisted the country will make it through the crisis.

Greece is not the scapegoat of the euro area or the international economy, Venizelos said.

IMF and European negotiators are frustrated at what they say is Greece's slow reform pace.

Venizelos is due to meet IMF chief Christine Lagarde who this weekend pressed Greece hard on meeting the terms of its rescue plan.

The European Union and IMF have already bailed out Greece, Portugal and Ireland, and officials want to stop the crisis from spreading to Italy, Spain and possibly beyond.

The IMF's Borges said it was essential to combine the ECB's potential crisis-fighting power with Europe's 440 billion-euro ($594 billion) bailout fund to deliver the necessary force to quell the crisis.

However, a number of ECB officials have voiced reluctance.

It is not helpful that we have an avalanche of new proposals every week, ECB Governing Council member Ewald Nowotny said.


Markets fear that European banks could be dragged down by their exposure to Greece and other debt-strapped euro zone nations, and analysts say a bailout fund of around 2 trillion euros would be needed if the crisis spread to Italy and Spain.

Germany opposes chipping in more to help countries it sees as profligate and the focus has now turned to ways to leverage the existing bailout fund, possibly through the ECB.

The European Union's top economic official, Olli Rehn, said on Saturday that as soon as the region's governments confirm new powers for the fund -- the European Financial Stability Facility -- attention would turn to how to get more impact from the existing money.

We need to find a mechanism where we can turn one euro in the EFSF into five, but there is no decision on how we could do that yet, another senior European official said.

Klaus Regling, who heads the bailout program, said officials were thinking about how to leverage the fund's resources to get more value out of them, but he said that did not necessarily need to involve the ECB.

One top ECB official said Europe might follow the lead of the United States, which rewrote its financial rule book during the 2007-2009 credit crisis.

ECB executive board member Lorenzo Bini Smaghi said there could be a European equivalent of the U.S. TARP program, which helped shore up the shaky banking system, or the TALF, which provided some liquidity to parched U.S. credit markets.

I think both scenarios can be followed.... I think that these two options could solve the problem, he said.

While signs have mounted through the weekend that Europe was prepared to step up its crisis response, there were still doubts officials were moving swiftly enough.

There is some risk of market disappointment due to the fact there were no further, more specific pledges from the euro countries, Swedish Finance Minister Anders Borg said.

It is clear they want to build a firewall (but) it will take time before we see the decisions necessary in place.

(Reporting by Reuters' IMF team in Washington; writing by Glenn Somerville; Editing by Chizu Nomiyama and Tim Ahmann)