The President of the European Commission challenged German Chancellor Angela Merkel to rise above domestic politics and agree on a financial safety net for debt-stricken Greece to help preserve European monetary union.

José Manuel Barroso told a German newspaper that European Union leaders must decide at a summit on Thursday and Friday on a support mechanism for Greece or risk harm to their common currency, noting the euro's stability was in Germany's interest.

"We need a decision at this summit on how to deal with Greece, otherwise the heightened uncertainty will go on and on," Mr Barroso told business daily Handelsblatt.

"We can't carry on as we are, as this would threaten the stability of the euro zone and encourage speculation," he said.

However, a spokesman for Ms Merkel repeated yesterday that the issue of aid for Greece was not on the summit agenda.

Underscoring Mr Barroso's warning, the euro slipped to a three-week low against the dollar yesterday as investors fretted over the uncertain prospect of support for Greece.

The risk premium on Greek debt jumped to its highest level since March 1 and the cost of insuring Greek debt against default also rose.

Greece's Central Bank meanwhile disclosed that the country's final 2009 Budget deficit was 12.9 per cent of national output, even higher than the Socialist government announced when it doubled the previous administration's estimate to 12.7 per cent on taking office last October.