BRUSSELS: Eurozone leaders aimed to agree Friday on at least the broad lines of the greater economic policy coordination needed to tame a deepseated debt crisis threatening to claim yet more victims.
The meeting comes against a troubled background as an escalating Libyan crisis roils the markets, making life even more difficult for the weaker eurozone states struggling to put their finances in order.
Greece, bailed out last year by the EU and International Monetary Fund, called Friday on its peers to take "strong European decisions to calm the markets," but expectations are for general accord only, not specific measures.
"I think that today we should agree on the main lines of the Pact for the Euro," Luxembourg Prime Minister Jean-Claude Juncker said as he arrived, referring to a draft outline on ways to boost eurozone cooperation.
"We also ought to have some indication on how we can agree an overall package at the end of this month," said Juncker, who also heads the Eurozone group of finance ministers.
The talks are supposed to lay the groundwork for the EU's set-piece summit March 24-25, with European Commission head Jose Manuel Barroso saying they would be "an important step" towards a comprehensive answer to the debt crisis.
The 17 heads of state or government of the eurozone nations, plus the head of the European Central Bank Jean-Claude Trichet, meet at 1600 GMT to adopt the 'Pact for the Euro' designed to improve the bloc's competitiveness.
Individual states will be responsible for specific measures -- an important caveat for smaller members jealous of their independence -- but they are all supposed to work towards these same goals.
The objective is "to achieve a new quality of economic policy coordination in the euro area, improve competitiveness, thereby leading to a higher degree of convergence," the document states.
By mutual cross-checking, member states are to ensure that all stick to the agreed course, with tough regular annual summits to review progress.
The logic is that if eurozone states have the same goals and obey the same rules, then the huge debt burdens and public deficits straining public finances and threatening the euro, will ultimately be brought under control.
Germany, Europe's powerhouse economy, insists that the euro's current problems stem largely from member states not following the rules on limiting their debt and deficits.
The Greek bailout last year was necessary to avoid a debt default which threatened the whole eurozone project but rather than resolve the issue, it only stoked the fires of contagion, with Ireland forced late last year to seek help.
The markets are betting that Portugal is the most likely next bailout candidate, with Spain and perhaps even Italy seen at risk too.
The problem was highlighted sharply this week when Moody's slashed Greece's debt ratings and then downgraded Spain -- the latest in a long list of warnings based on fears that some countries may not repay their debts.
Markets tumbled after Moody's announcement, paying scant attention to furious protests from Madrid and Athens that it was not looking closely at what they have achieved so far in stabilising their finances and economies.
Against this backdrop, eurozone leaders will also be looking at how they can bolster the debt rescue system set up after the Greek bailout in May.
The three-year European Financial Stability Facility is worth notionally 440 billion euros ($610 billion) but in practice, it can only provide half that amount. Making its full capacity available is still an issue.
Its 2013 replacement, the permanent European Stability Mechanism, will have double the firepower but there are difficult debates over its ultimate size and powers, especially whether it will be able to buy up eurozone government debt.
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