German Chancellor, Angela Merkelsaid that euro zone leaders must provide a firewall around Greece to avoid market attacks on other European countries, which could trigger a failure of the common currency.

The Chancellor also said on ARD television yesterday that implementing the agreement on expanding the European Financial Stability Facility is necessary to aid Greece and prevent the contagion of the debt crisis to spread into other countries in the zone.

Merkel also added that the fund's permanent successor, which should be effective in mid-2013, is required so we can in fact let a state go insolvent in case a nation was unable to meet its commitments and obligations.

We have to be in a position to react. We have to be able to put up a barrier, I don't rule out at all that at some point we will have the question whether one can do an insolvency of states just like with banks.

Merkel added that the situation is serious and there are no easy solutions.