Italy's prime minister faces a testing week as he seeks to shore up the country's strained public finances, with an IMF mission expected in Rome and market pressure building to a point where outside help may be needed to stem a full-scale debt emergency.

However, an IMF spokesperson poured cold water on a report in the Italian daily La Stampa that said up to €600 billion could be made available at a rate of between 4-5 per cent to give Italy breathing space for 18 months.

"There are no discussions with the Italian authorities on a programme for IMF financing," an IMF spokesperson said.

Adding to international pressure on euro zone leaders to stem the debt crisis, US president Barack Obama will press senior European Union officials in Washington today to reach a solution to the emergency that Moody's said now threatens the credit standing of all European government bond ratings.

After slumping last week, Asian shares and the euro rose today on hopes that some measures may emerge this week to ease the crisis.

Euro zone finance ministers will meet tomorrow to consider detailed rules to boost the impact of a €440 billion rescue fund.

Germany and France are also exploring radical ways to secure deeper and more rapid fiscal integration among the union's 17 countries to shore up the region's defences against the debt crisis.

Italian prime minister Mario Monti is expected to unveil measures next week that could include a revamped housing tax, a rise in sales tax and accelerated increases in the pension age. But pressure from the markets could force him to act more quickly.

One source with knowledge of the matter said contacts between the International Monetary Fund and Rome had intensified in recent days as concern has grown that German opposition to an expanded role for the European Central Bank could leave Italy without a financial backstop if one were needed.

The IMF inspection team is expected to visit Rome in the coming days but no date has been announced.

Italy is in the eye of the euro zone debt storm after its borrowing costs returned to the levels that triggered the collapse of former prime minister Silvio Berlusconi's centre-right government. Yields on 10-year bonds ended last week at more than 7.3 per cent.

Italian yields are now in the territory that forced Greece, Ireland and Portugal to seek international bailouts and an auction tomorrow of up to €8 billion of BTP bonds will be a crucial test.

On Friday, Italy paid a euro lifetime high yield of 6.5 per cent to sell new six-month paper, a level that analysts said cannot be maintained for long without pushing a public debt amounting to 120 per cent of gross domestic product out of control.

European Central Bank member Christian Noyer said today that Italy's economy was fundamentally sound and Rome should be able to restore market confidence if it shows fiscal discipline. "Italy should not be considered a weak economy," Mr Noyer told reporters on a visit to Tokyo.

Italy, the euro zone's third biggest economy, would be far too big for existing bailout mechanisms and default on its €1.8 trillion debt would cause a banking and financial crisis that would probably destroy the single currency.

It has more than €185 billion of bonds falling due between December and the end of April.

Mr Obama was due to hold talks today with European Council president Herman Van Rompuy and European Commission president Jose Manuel Barroso, although no breakthroughs were expected.

The president was expected to reiterate he was confident that Europe's leaders could handle the crisis, which is emerging as a major worry for the 2012 US elections, if they show political leadership.

Moody's warned in a report that it may take a series of shocks before the political impetus for a resolution to the debt crisis finally emerges. The crisis had deepened in recent weeks, it said.

"The probability of multiple defaults (in addition to Greece's private sector involvement programme) by euro area countries is no longer negligible," it said.

Civil servants from Germany and France were exploring ways for more rapid fiscal integration after the realisation that getting an agreement among all 27 countries in the EU will be difficult any time soon.

An agreement among just the euro zone countries is one option.

"The goal is for the member states of the common currency to create their own Stability Union and to concentrate on that," German finance minister Wolfgang Schaeuble told ARD television yesterday.

Another option being explored is a separate agreement outside the EU treaty that could involve a core of about eight to 10 euro zone countries, officials say.

Reuters