German Chancellor Angela Merkel, left. arrives for an EU summit in Brussels on Sunday, Oct. 23, 2011. Big banks find themselves under pressure in Europe's debt crisis with finance chiefs pushing to raise billions of euros in capital and accept huge losses on Greek bonds they hold. (AP Photo/Geert Vanden Wijngaert)
German Chancellor Angela Merkel, left. arrives for an EU summit in Brussels on Sunday, Oct. 23, 2011. Big banks find themselves under pressure in Europe's debt crisis with finance chiefs pushing to raise billions of euros in capital and accept huge losses on Greek bonds they hold. (AP Photo/Geert Vanden Wijngaert)
German Chancellor Angela Merkel arrives for an EU summit in Brussels on Sunday, Oct. 23, 2011. Big banks find themselves under pressure in Europe's debt crisis with finance chiefs pushing to raise billions of euros in capital and accept huge losses on Greek bonds they hold. (AP Photo/Geert Vanden Wijngaert)
Greek Prime Minister George Papandreou, left, speaks with Latvian Prime Minister Valdis Dombrovskis during a round table meeting at an EU summit in Brussels on Sunday, Oct. 23, 2011. Greece's prime minister is pleading with European leaders in Brussels to act decisively to solve the continent's debt crisis. At a summit Sunday, the leaders are expected to ask banks to accept huge losses on Greek bonds to ease the pressure on the country, and to raise billions more in capital to weather those losses. (AP Photo/Yves Logghe)
Greek Prime Minister George Papandreou, left, speaks with Luxembourg's Prime Minister Jean-Claude Juncker during a round table meeting at an EU summit in Brussels on Sunday, Oct. 23, 2011. Greece's prime minister is pleading with European leaders in Brussels to act decisively to solve the continent's debt crisis. At a summit Sunday, the leaders are expected to ask banks to accept huge losses on Greek bonds to ease the pressure on the country, and to raise billions more in capital to weather those losses. (AP Photo/Yves Logghe)
German Chancellor Angela Merkel, left, speaks with Dutch Prime Minister Mark Rutte during a round table meeting at an EU summit in Brussels on Sunday, Oct. 23, 2011. Greece's prime minister is pleading with European leaders in Brussels to act decisively to solve the continent's debt crisis. At a summit Sunday, the leaders are expected to ask banks to accept huge losses on Greek bonds to ease the pressure on the country, and to raise billions more in capital to weather those losses. (AP Photo/Yves Logghe)
BRUSSELS (AP) ? Greece's prime minister pleaded Sunday for a comprehensive solution to the European debt crisis that has swallowed his country and is threatening to suck in larger economies, but the continent's leaders warned the world may have to wait a few more days.
The search for a comprehensive solution to its escalating debt troubles has divided the continent. Increasingly it is pitting not only the poorer countries in the eurozone against their richer neighbors that are tired of bailing them out, but also sparking anger from governments outside the 17-state currency union, who fear being dragged into the mess.
"The crisis in the eurozone is having a chilling effect on all our economies, Britain included. ... We have to deal with this issue," British Prime Minister David Cameron said on his way into the meeting of the 27-country EU. Britain does not use the euro. Later in the day, the leaders of countries the 17 that use the euro will meet on their own.
Cameron's eurozone counterparts, meanwhile, tried to lower expectations for Sunday's meetings, saying the real decisions will be made Wednesday at another emergency summit.
"Let's put the expectations in context: Don't count on decisions today," German Chancellor Angela Merkel said.
Leaders are in the difficult position of not being able to decide on anything until everything is in place, since each piece of the crisis puzzle affects the others.
The biggest sticking point is how to most effectively use Europe's bailout fund to make sure Italy and Spain don't see their borrowing costs spiral out of control as happened with Greece, Portugal and Ireland. Europe doesn't have enough money to rescue Italy and Spain as it did the other three countries; analysts say it must act now to eliminate the possibility of their collapse.
Merkel and French President Nicolas Sarkozy urged Italian Prime Minister Silvio Berlusconi at a meeting on Sunday morning to reform the country's economy before it's too late, according to a German official. He spoke on condition of anonymity to describe private discussions.
While the German and French leaders presented a united front to Italy, their disagreements over how best to use the bailout fund, which is called the European Financial Stability Facility, are causing delays.
France wants the fund to be allowed to tap the massive cash reserves of the European Central Bank ? an option Germany rejects. And weaker economies are wary of agreeing to the other two parts of the grand plan ? bigger bank capital and cuts to Greece's debt ? without assurance that the bailout fund is ready to provide support.
Until it does, the continuing uncertainty will roil markets and slow growth across Europe and even the world.
Worst off, of course, is Greece, which reeling from several rounds of budget cuts that have sparked a series of strikes and riots.
"Greece has proven again and again that we are making the necessary decisions to make our economy sustainable, and make our economy more just," Greek Prime Minister George Papandreou told reporters as he headed into Sunday's meetings. "We are doing what we need from our side ... but it's been proven now that the crisis is not a Greek crisis. The crisis is a European crisis, so now is the time that we as Europeans need to act decisively and effectively."
To ease the pressure on the country, banks will be asked to accept much bigger losses on the country's bonds.
Austria's chancellor said the cut in the value of Greek government bond will likely be raised "in the direction of 40 to 50 percent."
"A cut in the debt is the right step," Werner Faymann told Austrian newspaper Wiener Kurier. The comments were confirmed by one of his aides.
Despite massive budget cuts and reforms, a new report has said that Greece's economic situation is still dire and that worsening economic conditions mean it could take the country decades to emerge from the crisis.
The report from debt inspectors said the eurozone and the International Monetary Fund would likely have to lend Athens more money unless the banks accept a 60 percent writedown of the bonds they hold. That would be on top of the euro110 billion ($300 billion) in rescue loans that have been propping up with country since May 2010.
Another rescue of a similar size was agreed to in July, but it's now clear that deal did not go far enough. For instance, it called for only a 21 percent cut in Greek bond holdings; leaders are now discussing a much more significant reduction, though an exact percentage has not yet emerged.
The near-consensus among eurozone countries that Greece's debt will have to be slashed is one of the reasons banks across Europe ? not only in the 17-country eurozone ? will be forced to shore up their capital buffers in the coming months.
A European official said Saturday that new rules agreed by EU finance ministers would see banks having to raise just over euro100 billion ($140 billion). The official was speaking on condition of anonymity because the rules were pending approval from EU leaders.
However, on Sunday it was uncertain whether EU leaders would even be able to sign off on the bank capital rules before a second summit Wednesday. A draft of summit conclusions from Sunday morning only welcomed the progress made by finance ministers, adding that the final decision would be made by yet another finance ministers' meeting on Wednesday ahead of the second summit.
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Associated Press writers Raf Casert, Elena Becatoros, Slobodan Lekic and Don Melvin contributed to this report.
Associated Press
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