More power to the rescue fund?

Speaking to reporters after a meeting with his Finnish counterpart, Jyrki Katainen, Monti said he thought it would help if the European Stability Mechanism (ESM) had a banking license.

"I think this will in due course occur," he said in response to a journalist's question. Such a license would allow the ESM to borrow unlimited funds from the European Central Bank (ECB).

Germany is vehemently opposed to the license, with German Economy Minister Philipp Rösler saying on Wednesday that "we don't want to head towards an inflation union, we want to go down the route of a stability union."

But Monti, who is on a charm-offensive trip to European neighbors to drum up support for measures to strengthen the European rescue fund, emphasized that eurozone countries need to do all they can to save the currency union

"I think that progress is in integration of fiscal policies, of banking policies, financial policies, and we have to proceed hand-in-hand, in a sense, in following the common logic of deepening."

Bond purchases controversial

His comments echoed those of ECB chief and compatriot Mario Draghi, who last week vowed he would do "whatever it takes to preserve the euro," fueling speculation of further purchases by the ECB of Italian and Spanish bonds.

Finland, which is one of only four eurozone countries with a triple-A debt rating, has taken a tough stance on bailouts, demanding collateral in exchange for loans and opposing measures such as the purchase of sovereign bonds by the European bailout fund.

"We are afraid that the EFSF or ESM would run out of money too soon if we started to operate in the secondary market," Katainen said, referring to the market, where sovereign bonds are traded.

But Katainen agreed with Monti that the interest rates Italy pays on its bonds are too high and that the financial markets were not giving countries like Italy enough credit for trying to nurse their budgets back to health.

"It is clear that ... the sovereign bond market in the euro area is not in a normal situation. Financial markets are not assessing all the member countries as they should do," he said.

Meanwhile, both the head of the International Monetary Fund (IMF), Christine Lagarde and US Treasury Secretary Timothy Geithner on Wednesday urged eurozone members to do more to stabilize the eurozone.

ng/pfd (Reuters, AP, AFP)