UPDATE 4-EU eyes 600 bln euro crisis mechanism, sources say
* EU ministers discuss big sums for anti-crisis mechanism
* Existing aid plan for non-euro states to apply to euro zone (Adds details of sums, quotes)
BRUSSELS, May 9 (Reuters) - European Union finance ministers sought agreement on Sunday on emergency measures that could be worth up to 600 billion euros ($805 billion) to prevent Greece's debt crisis spreading to other countries in the euro zone.
Vowing to do everything to defend the euro against the "wolfpack" of the financial markets, which have been pounding Greece, Spain and Portugal, the ministers discussed much larger sums than previously to try to end the market turmoil.
EU sources said Germany, which faces public opposition to bailouts, was resisting any deal that put no limit on the potential financial assistance for countries such as Portugal, Spain or Ireland and wanted the IMF involved.
But a compromise was being discussed that included loan guarantees by euro zone countries worth 440 billion euros, a stabilisation fund worth 60 billion euros and a 100 billion euro top-up of International Monetary Fund loans, they said.
"We now see ... wolfpack behaviours (on markets), and if we will not stop these packs, even if it is self-inflicted weakness, they will tear the weaker countries apart," Swedish Finance Minister Anders Borg told reporters in Brussels.
U.S. President Barack Obama spoke to the German and French leaders by telephone to reinforce the need to calm jittery financial markets quickly and ensure the global economy is not jolted by a sovereign debt crisis. [ID:nN09190358]
Economists estimate that if Portugal, Ireland and Spain eventually require similar three-year bailouts, the total cost could be 500 billion euros.
Comments by the ministers, and by heads of state and government from the 27-nation EU who called for a new anti-crisis mechanism in talks on Friday, showed greater urgency from a bloc that fears for its future if the crisis is mishandled.
The sums that EU sources said were being discussed dwarfed those considered at previous crisis meetings and deals that have failed to contain the market turmoil, which has made Greece's borrowing costs unsustainable.
In early Asian trade on Monday, the euro EUR= extended its recovery from 14-month lows and was up almost 2 percent against the dollar. The single currency rose 3 percent versus the yen.
Greece, with a budget deficit of 13.6-14.1 percent of gross domestic product in 2009 and debt of more than 115 percent of GDP, has secured a 110 billion euro three-year loan package from the 16-country euro zone and the IMF.
The EU executive, the European Commission, wants to ensure other vulnerable countries can stave off similar crises.
The European Central Bank is also expected to play a role in the containment efforts but it is not clear what. EU sources said ECB governors discussed the crisis on Sunday but no details were available.
"I see a 'magical' triangle that can provide a solution: the EU finance ministers, the ECB and the affected countries," said Austrian Finance Minister Josef Proell.
The Commission has proposed a stabilisation framework to provide a safety net for other euro zone countries with high deficits and debt, and wants an aid mechanism for non-euro zone countries extended to nations in the single-currency bloc.
EU sources said the Commission wanted the amount available under the mechanism, called the balance-of-payments facility, to be raised by 60 billion euros. The maximum available now is 50 billion euros.
"The Commission has put on the table ... a proposal that is ambitious and comprehensive ... to enable the Union to borrow on the international markets but also looking beyond the community budget to bring member states into the mechanism," a European Commission official said.
A similar mechanism was successfully used in the cases of Latvia, Romania and Hungary after the pool of money available was increased to 50 billion euros last year.
A German government source said Berlin wanted the IMF involved in the safety net mechanism and made clear tough conditions must be attached to any loans.
"The government will insist that the IMF -- as with the Greece case -- participates in any possible bilateral aid," the source said.
Chancellor Angela Merkel faces deep popular opposition to her decision to release aid to Greece. Voters punished her centre-right coalition in a state election on Sunday, depriving her of a majority in parliament's upper house. [ID:LDE64801V]
German Finance Minister Wolfgang Schaeuble was admitted to hospital on Sunday after an apparent bad reaction to medicine and missed the ministers' talks. [ID:nLDE6480KO] (Additional reporting by Paul Carrel in Berlin, and Justyna Pawlak, John O'Donnell, Bate Felix and David Brunnstrom; writing by Jan Strupczewski and Timothy Heritage, editing by Dale Hudson)
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video