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The head of the International Monetary Fund has warned that the crisis in Greece could spread throughout Europe.
Dominique Strauss-Kahn said every day lost in resolving the crisis risks spreading the "consequences far away".
Global stock markets, recovering slightly on Wednesday, have been hit badly by fears of contagion.
Mr Strauss-Kahn was speaking at a news conference after a crisis meeting with Germany's finance minister and the president of the European Central Bank.
He said: "What is at stake today is the economic situation of Greece. But it's more than that.
"We also need to restore confidence... I'm confident that the problem will be fixed. But if we don't fix it in Greece, it may have a lot of consequences on the European Union," Mr Strauss-Kahn said.
Investor confidence in Greece has continued to weaken.
The cost of borrowing has risen sharply with interest rates for two-year Greek bonds hitting a new high of almost 19%.
Meanwhile Portugal moved to reassure investors as concerns grew that the Greek crisis could spread to other vulnerable eurozone economies.
Deeply unpopular
Gavin Hewitt
We now enter an uncertain period. Will the financial markets test Portugal or Spain? The Spanish economy is five times the size of Greece. Will other bail-outs be needed and would the German taxpayer revolt against helping out others?
Gavin Hewitt, BBC europe editor
Read Gavin's blog in full
Germany's Chancellor Angela Merkel will soon host talks on the crisis as she decides whether to contribute to a bail-out.
However, Mrs Merkel knows that agreeing to support Greece would be deeply unpopular with voters - many of whom argue that the struggling nation should never have been allowed to join the euro.
European stocks had fallen sharply on Wednesday morning, following the downgrading of Greece's debt to "junk" status, though pulled back losses by afternoon trading.
Meanwhile the euro fell to a fresh one-year low against the dollar before recovering slightly.
Overnight Japan's leading share index, the Nikkei 225, closed down more than 2.5% after steep falls in European stocks on Tuesday.
Greece's stock market regulators have also been forced to impose a ban on short-selling, amid concerns that Greek bank shares are being undermined by speculators.
Contagion fears
Global shares have tumbled after the credit rating agency Standard and Poor's downgraded Greek debt to "junk" on Tuesday.
The market is now looking at every country with a lot of curiosity
Gilles Moec, senior European economist at Deutsche Bank
Q&A: Greece's economic woes
Greece crisis: What can be done?
Could UK face same fate?
That means the rating agency views Greece as a much riskier place to invest, and increases the interest rate investors will charge the Greek government to borrow much-needed money on the open market.
On Wednesday, that interest rate hit 11.3% for 10-year Greek bonds - another all-time high for a eurozone country.
Concerns have intensified among some investors that the Greek crisis could spread to other vulnerable eurozone economies.
Yields on Spanish 10-year bonds have also reached their highest level - 4.27% - since the euro was launched.
Meanwhile investors are demanding an interest rate of close to 6% from Portugal - another relatively weak European economy.
"If yields rise much further Portugal may, like Greece, be in a position where [borrowing] on the open market becomes just too expensive," warned Jane Foley, research director at currency trader Forex.com.
Portugal's Prime Minister Jose Socrates spoke of "a speculative attack on the euro and Portuguese debt".
He said he would work with the opposition party to restore economic confidence in the country which also had its credit rating downgraded on Tuesday.
Gilles Moec, senior European economist at Deutsche Bank, said: "The market is now looking at every country with a lot of curiosity."
But he said other countries were not in the same dire straits as Greece.
"Portugal is clearly the most fragile country after Greece, but even so there is quite a lot of distance between [the two countries]," he told the BBC.
"The level of debt before the recession began was much higher in Greece. The immediate pressure on funding needs in Portugal is [therefore] not as dire."
PROBABILITY OF COUNTRIES BEING UNABLE TO PAY BACK DEBT
Probability of payback
With any debtor, there is a chance they will not be able to repay their debts. These figures in the above graph express the likelihood as a percentage called the Cumulative Probability of Default (CPD)
The figures express the probability of a country defaulting sometime over the next five years
Proposed rescue
Mr Strauss-Kahn, along with ECB president Jean-Claude Trichet, were in Berlin to urge German MPs to agree to a rescue deal, giving Greece billions of euros in loans.
Public sector workers protest in Athens
Many German politicians are opposed to the bail-out of Greece.
As Europe's largest economy, Germany's involvement in any rescue deal is crucial, while the government is wrestling with public and political opposition to a bail-out.
German Chancellor Angela Merkel has insisted that Greece needs to show tougher measures to cut spending.
"You have to economise, you have to become fair, you have to be honest; if not, nobody can help you," she warned on Tuesday.
In Berlin, the BBC's correspondent Steve Rosenberg said senior politicians were still insisting it was "too early to say" whether a rescue deal would be agreed.
According to Simon Derrick, from Bank of New York Mellon, time is now running out for Greece to secure a deal.
HAVE YOUR SAY
The Greeks need to accept the pain that is the inevitable and foreseeable consequence
MarkGE
Send us your comments
"The message that has been emerging from the markets this week is that a resolution to the Greek crisis needs to be found in the next few days," he said, warning that delays risk "sparking contagion through southern Europe".
On Tuesday, European Council President Herman Van Rompuy announced a meeting of eurozone heads of state and government would be held on 10 May to discuss the Greek crisis.
He insisted negotiations on the aid were "well on track" and that there was "no question about restructuring" Greek debt.
Greece also needs to secure at least some funding by mid-May, when it is due to repay investors about 8.5bn euros of debt.
There is significant opposition to the handling of the crisis in Greece itself, with some demonstrators calling for the country to default on its debts so that foreign banks would pay the price for the crisis.
Dominique Strauss-Kahn said every day lost in resolving the crisis risks spreading the "consequences far away".
Global stock markets, recovering slightly on Wednesday, have been hit badly by fears of contagion.
Mr Strauss-Kahn was speaking at a news conference after a crisis meeting with Germany's finance minister and the president of the European Central Bank.
He said: "What is at stake today is the economic situation of Greece. But it's more than that.
"We also need to restore confidence... I'm confident that the problem will be fixed. But if we don't fix it in Greece, it may have a lot of consequences on the European Union," Mr Strauss-Kahn said.
Investor confidence in Greece has continued to weaken.
The cost of borrowing has risen sharply with interest rates for two-year Greek bonds hitting a new high of almost 19%.
Meanwhile Portugal moved to reassure investors as concerns grew that the Greek crisis could spread to other vulnerable eurozone economies.
Deeply unpopular
Gavin Hewitt
We now enter an uncertain period. Will the financial markets test Portugal or Spain? The Spanish economy is five times the size of Greece. Will other bail-outs be needed and would the German taxpayer revolt against helping out others?
Gavin Hewitt, BBC europe editor
Read Gavin's blog in full
Germany's Chancellor Angela Merkel will soon host talks on the crisis as she decides whether to contribute to a bail-out.
However, Mrs Merkel knows that agreeing to support Greece would be deeply unpopular with voters - many of whom argue that the struggling nation should never have been allowed to join the euro.
European stocks had fallen sharply on Wednesday morning, following the downgrading of Greece's debt to "junk" status, though pulled back losses by afternoon trading.
Meanwhile the euro fell to a fresh one-year low against the dollar before recovering slightly.
Overnight Japan's leading share index, the Nikkei 225, closed down more than 2.5% after steep falls in European stocks on Tuesday.
Greece's stock market regulators have also been forced to impose a ban on short-selling, amid concerns that Greek bank shares are being undermined by speculators.
Contagion fears
Global shares have tumbled after the credit rating agency Standard and Poor's downgraded Greek debt to "junk" on Tuesday.
The market is now looking at every country with a lot of curiosity
Gilles Moec, senior European economist at Deutsche Bank
Q&A: Greece's economic woes
Greece crisis: What can be done?
Could UK face same fate?
That means the rating agency views Greece as a much riskier place to invest, and increases the interest rate investors will charge the Greek government to borrow much-needed money on the open market.
On Wednesday, that interest rate hit 11.3% for 10-year Greek bonds - another all-time high for a eurozone country.
Concerns have intensified among some investors that the Greek crisis could spread to other vulnerable eurozone economies.
Yields on Spanish 10-year bonds have also reached their highest level - 4.27% - since the euro was launched.
Meanwhile investors are demanding an interest rate of close to 6% from Portugal - another relatively weak European economy.
"If yields rise much further Portugal may, like Greece, be in a position where [borrowing] on the open market becomes just too expensive," warned Jane Foley, research director at currency trader Forex.com.
Portugal's Prime Minister Jose Socrates spoke of "a speculative attack on the euro and Portuguese debt".
He said he would work with the opposition party to restore economic confidence in the country which also had its credit rating downgraded on Tuesday.
Gilles Moec, senior European economist at Deutsche Bank, said: "The market is now looking at every country with a lot of curiosity."
But he said other countries were not in the same dire straits as Greece.
"Portugal is clearly the most fragile country after Greece, but even so there is quite a lot of distance between [the two countries]," he told the BBC.
"The level of debt before the recession began was much higher in Greece. The immediate pressure on funding needs in Portugal is [therefore] not as dire."
PROBABILITY OF COUNTRIES BEING UNABLE TO PAY BACK DEBT
Probability of payback
With any debtor, there is a chance they will not be able to repay their debts. These figures in the above graph express the likelihood as a percentage called the Cumulative Probability of Default (CPD)
The figures express the probability of a country defaulting sometime over the next five years
Proposed rescue
Mr Strauss-Kahn, along with ECB president Jean-Claude Trichet, were in Berlin to urge German MPs to agree to a rescue deal, giving Greece billions of euros in loans.
Public sector workers protest in Athens
Many German politicians are opposed to the bail-out of Greece.
As Europe's largest economy, Germany's involvement in any rescue deal is crucial, while the government is wrestling with public and political opposition to a bail-out.
German Chancellor Angela Merkel has insisted that Greece needs to show tougher measures to cut spending.
"You have to economise, you have to become fair, you have to be honest; if not, nobody can help you," she warned on Tuesday.
In Berlin, the BBC's correspondent Steve Rosenberg said senior politicians were still insisting it was "too early to say" whether a rescue deal would be agreed.
According to Simon Derrick, from Bank of New York Mellon, time is now running out for Greece to secure a deal.
HAVE YOUR SAY
The Greeks need to accept the pain that is the inevitable and foreseeable consequence
MarkGE
Send us your comments
"The message that has been emerging from the markets this week is that a resolution to the Greek crisis needs to be found in the next few days," he said, warning that delays risk "sparking contagion through southern Europe".
On Tuesday, European Council President Herman Van Rompuy announced a meeting of eurozone heads of state and government would be held on 10 May to discuss the Greek crisis.
He insisted negotiations on the aid were "well on track" and that there was "no question about restructuring" Greek debt.
Greece also needs to secure at least some funding by mid-May, when it is due to repay investors about 8.5bn euros of debt.
There is significant opposition to the handling of the crisis in Greece itself, with some demonstrators calling for the country to default on its debts so that foreign banks would pay the price for the crisis.
Greece, Portugal, Spain - and soon they're probably all asking for my money, Greece already did. What should I do? And not surprisingly, German politicians are missing all the fun, maybe even made matters worst during the last days by showing lame reaction only.
So, finance-geniuses, is this the beginning of the end of the euro-zone? Should we just try to take over Southern Europe, we don't even have to start a war this time!? Or is it all just silly panic.
Comment