Eurozone mulls Greek fiscal-crisis options

Eurozone finance ministers opened the door Monday to using the currency union's bailout fund to buy up distressed Greek bonds, thereby cutting the country's overall debt load as they scrambled to stop the region's debt crisis from spreading to larger economies like Italy and Spain.

The ministers' statement -- which came after hours of discussions in Brussels and was scant on details -- followed one of the worst days in the markets for Italy and Spain, the third and fourth largest economies in the eurozone.

The fear is that while Europe's bailout fund can support already bailed out Greece, Portugal and Ireland -- only 6 percent of the eurozone economy -- unemployment-ridden Spain and highly indebted Italy are too big to save.

The 17 eurozone finance ministers said they "stand ready" to contain the risk of contagion, "including enhancing the flexibility and the scope" of the European Financial Stability Facility, the eurozone's portion of the overall bailout fund. They also said that they will consider giving already bailed out countries more time to repay their loans and cutting the interest rates they have to pay.

While ministers did not explain what this wider "flexibility and scope" will mean in practice, the statement comes after the eurozone's biggest banks and investment funds called for EFSF-funded buybacks as part of a plan to get the private sector to contribute to a second bailout for Greece.

Investors Monday sold off European stocks while the yields, or interest rates, on the bonds of Spain and Italy reached euro-era highs.

Italy came under market pressure after remarks last week by Premier Silvio Berlusconi criticizing his Finance Minister Giulio Tremonti. Berlusconi's sniping has cast doubt on the government's political will to carry through with Tremonti's proposals to find new savings and eliminate the country's budget deficit by 2014.