IMF Says Confidence In Eurozone At Stake With Greece

German Chancellor Angela Merkel (right) and International Monetary Fund chief Dominique Strauss-Kahn speak to journalists after a meeting in Berlin.

International Monetary Fund (IMF) chief Dominique Strauss-Kahn has said that confidence in the eurozone as a whole is "at stake" with the worsening Greek debt crisis.

Strauss-Khan spoke after emergency talks in Berlin with German Finance Minister Wolfgang Schaeuble, European Central Bank President Jean-Claude Trichet, and top German members of parliament.

"What is at stake is certainly today the economic situation of Greece, but it is more than that, because Greece is part of the eurozone, because of the solidarity system of the eurozone," Strauss-Khan said.

"It's the confidence in this zone which is at stake, and that is why we need to act swiftly and strongly."

The Berlin talks came as world financial markets tumbled and the euro fell to its lowest level in a year against the dollar, after Greece's debt was rated as "junk" and Portugal's debt was also downgraded on April 27.

Spain also saw its credit rating lowered today.

The rating cuts increased fears that Greece, Portugal, and Spain -- and possibly others in the 16-member eurozone -- won't be able to pay what they owe.

The European Union and the IMF have pledged to give Greece a 45 billion-euro ($60 billion) loan to help it pay its debts.

Germany, which is expected to contribute some 8.4 billion euros, insists on strict conditions before it gives Greece the money.

However, top EU officials, including Jose Manuel Barroso, the head of the European Commission, and EU President Herman Van Rompuy, said they were "determined to guarantee stability" of the eurozone.

compiled from agency reports