Eurozone finance ministers meet Thursday with budget hardliners demanding more from Greece, Spain set to request a rescue of its banks, and Cyprus the latest victim of Europe's debt crisis.
As the two-year drama gathers pace, the Eurogroup meets in Luxembourg from 1400 GMT for a likely late-night battle on the Greek and Spanish fronts, as well as talks on Italy's soaring borrowing costs and a Cypriot cry for help.
The talks come on the eve of a mini-summit in Rome of the leaders of the eurozone's big four -- Germany, France, Italy and Spain -- expected to dissect a plan for the eurozone rescue fund to intervene more easily on bond markets.
It was "a mystery" that governments had not yet opted to use the European Financial Stability facility to buy the bonds of the likes of Italy and Spain to relieve them of market pressure, Benoit Coeure, a member of the European Central Bank's executive board, told the Financial Times.
The pressure intensified against Spain on Thursday as the interest demanded by investors soared in a new bond sale, leaping to 4.706 percent for two-year bonds, more than double the rate charged in a March sale.
Thursday's talks, which will widen the next day to include the finance ministers of Britain and other non-euro states in another tough fight over calls to introduce a tax on financial transactions, are part of a marathon series leading up to a full European Union summit next week.
By Thursday and Friday next week, the eurozone is expected to have agreed the short- and long-term shape of a banking or financial union and steps towards closer political integration that economists see as essential to getting to the root of the debt crisis.
The United States, the International Monetary Fund and the European Central Bank have all urged greater banking integration in Europe, as the debt crisis boomerangs from financial sectors to sovereigns.
As ever, Greece looks set to dominate talks, a day after conservative leader Antonis Samaras was sworn in as prime minister of a pro-euro coalition government bent on negotiating changes to its own bailout programme.
Athens, to be represented by incoming finance minister Vassilis Rapanos, wants deadlines to be eased.
But Germany, the Netherlands and Finland are again playing tough. While willing to bend on some of the roads taken, they are likely to insist that the outcome must ultimately meet the key bailout terms and conditions agreed in March after months of bickering.
Thomas Wieser, who chairs preparations for the Eurogroup meetings, said the choice facing currency partners was stark.
Either you "stick to the fiscal targets and then you need additional measures" from Greece, the Brussels-based official said, or you change deadlines, in which case "you need extra money."
Wieser, who chairs preparations for politically-charged meetings of the Eurogroup, said a deal worth 130 billion euros ($165 billion) in new loans agreed in March was no longer workable.
"The economic environment has turned out to be even worse than assumed," he said, warning that by August, the 17-nation eurozone and the IMF will have to "seriously re-negotiate how to get the thing back on track."
Spain meanwhile is expected to make an official request at the meeting for loans to recapitalise its banks.
Following first audits in Madrid, another eurozone source said this would be for a sum "well within" an agreed outer band of up to 100 billion euros ($127 billion).
Cyprus is also set to seek eurozone aid for its ailing banks, probably next week, after securing a separate bilateral loan from Russia, an EU diplomat said Wednesday.
The debt crisis caused further damage to the eurozone economy as a key survey, the Purchasing Managers Index (PMI) compiled by research firm Markit, found that private sector activity fell to its lowest level for three years in the second quarter.
"The downturn is gathering pace and spreading across the region," said Markit chief economist Chris Williamson.