As protests raged in Athens on Saturday, German Chancellor Angela Merkel issued a call for private creditors to offer "substantial" aid to debt-ridden Greece.
"We must be sure to try to have a substantial contribution" from private creditors like banks and insurance companies for debt-laden Greece, Merkel told her Christian Democratic Union (CDU) party at a conference in Berlin.
Merkel conceded, however, that private contribution would have to be voluntary.
"At the moment we can only get the participation of the private investors on a voluntary basis," she said.
Greece is awaiting approval for the next part of an EU- and IMF-brokered deal worth 110 billion euros.
Speaking to German daily newspaper, Boerrsenzeitung, on Saturday, German Finance Minister Wolfgang Schaeuble reasserted Merkel's request, adding that the private sector's role should be "quantifiable" and "guaranteed."
During talks between Merkel and French President Nicolas Sarkozy in Berlin on Friday, Merkel backed away from her previous calls for private investors to contribute up to a third of the second Greek rescue package by accepting later repayment on their Greek bonds.
The leaders instead established the voluntary nature of private sector involvement in a second bailout and concluded that it be conducted in coordination with the European Central Bank, the European Commission and the International Monetary Fund.
'Playing with fire'
Merkel's comments come as Eurogroup chief, Jean-Claude Juncker warned that ramifications of the Greek debt crisis could spread like wildfire through other EU countries.
Juncker asserted that the problems which forced Greece, Ireland and Portugal to seek emergency aid could not only effect Spain, which is tipped as the next casualty, but also Italy and Belgium.
The chairman of the eurozone finance ministers' Eurogroup criticized German pressure to involve bondholders, saying it had pushed up the cost of the Greek bailout.
In an interview with the German daily Suddeutsche Zeitung, the Luxembourg prime minister and Eurogroup head warned that "we are playing with fire."
The EU and International Monetary Fund are currently trying to assemble a second bailout package for Greece in return for strict austerity measures.
Meanwhile, thousands of protesters marched on the Greek parliament in a show of unabated public anger at the government's determination to introduce further austerity measures.
Greek Prime Minister George Papandreou announced a new government line-up on Friday to deal with the crisis.
Author: Charlotte Chelsom-Pill (AFP, Reuters)
Editor: Sonia Phalnikar