The European Commission has called for greater emergency lending power to underpin the euro zone after Portugal, seen as the next candidate for a bailout, successfully sold its first debt of the year.
"We are saying very clearly that we believe that the financing capacity must be reinforced and the scope of the activities of the (European Financial Stability Facility) should be widened," Commission president Jose Manuel Barroso said today, calling for a decision to be made at a summit next month.
But Germany and France said the €440 billion backstop was sufficient.
A spokesman for German chancellor Angela Merkel said it was neither useful nor necessary to discuss expanding the EFSF.
A French government spokesman said the EU safety net was big enough as it is, repeating the position Paris and Berlin took in December in rejecting calls to increase the rescue funds.
Senior EU sources said Paris and Berlin were in fact working actively on a systemic response to the debt crisis, including a possible expansion of the EFSF, but the package was unlikely to be ready in time for the February 4th summit.
It was more likely to be adopted when EU leaders meet in late March.
Separately, the Commission suggested in an internal report that a one-off tax could be levied on banks to raise €50 billion to fund the future European Stability Mechanism designed to support euro zone states in trouble.
There was no immediate response to the idea of raising a "critical mass of paid-in capital" for the future ESM, but the main member states have long opposed any form of EU tax.
EU monetary affairs commissioner Olli Rehn said work was in progress on raising the lending capacity of the existing €440 million rescue fund, which can effectively lend only €250 billion because of cash buffers set aside to obtain a top-notch credit rating.
Mr Rehn told reporters in Brussels that work was in progress on changing the size and scope of the EFSF but he declined to give details of potential changes, saying it would be premature.
"The effective lending capacity of the current European Financial Stability Facility should be reinforced and the scope of its activity widened," he said.
Writing in the Financial Times today, Mr Rehn said finance ministers should look next week at reinforcing the effective lending capacity of the euro zone's rescue fund and making it more flexible to calm debt markets.
"We need to review all options for the size and scope of our financial backstops - not only for the current ones but also for the permanent European stability mechanism too."
Reuters