The European Commission has confirmed that it may set up a version of the International Monetary Fund to bolster the eurozone's financial stability.

Germany and France are leading the move, part of a series of initiatives aimed at avoiding a repeat of the sort of financial crisis engulfing Greece.

The IMF monitors the economic policies of member countries and can provide financial aid in the event of a crisis.

France and Germany have resisted IMF involvement in Greece's financial woes.

The willingness to create a new agency reflects the aversion that euro governments have to the idea of IMF involvement in the Greek crisis. They do not like the implication that they can't sort out their own problems themselves."

Economic and Monetary Affairs Commissioner Olli Rehn is meeting with the full commission executive about the talks on the EMF plan today.

Full details of the EMF, and how the 16 members of the eurozone would fund it, might be ready by early June, he said.

Weighed down by a deficit more than four times the EU's limit, Greece has initiated a number of austerity measures, including sweeping tax rises and deep cuts in public spending.

The emergency action has sparked protests and nationwide strikes that have affected air and ground transport, as well as schools and hospitals.

It has also highlighted differences in the 27-nation EU between the euro countries and those that have retained their own national currencies.

Countries outside the euro have greater leeway in managing their finances as they can devalue their money if they so wish to help balance their books.