Greece 'to remain in eurozone'; EC chief backs eurobonds

European leaders have assured Greece its future remains within the eurozone but warned it must implement the tough austerity measures set out as part of its rescue plan.

Speaking after a conference call with Greek leader George Papandreou, German chancellor Angela Merkel and French president Nicolas Sarkozy moved to calm fears Greece could be forced out of the eurozone, the Telegraph reports.

The European leaders said they were convinced Greece's future was as a member of the single currency.

"Putting in place commitments of the [bail-out] programme is essential for the Greek economy to return to a path of lasting and balanced growth," they said.

In response, Greece confirmed it was determined to meet all obligations agreed with international leaders in exchange for the European Union/International Monetary Fund bail-out.

Meanwhile, European Commission president Jose Manuel Barroso said he backed  proposals for the introduction of eurobonds as part of a "fight for the economic and political future of Europe".

He added creating the first bond issued backed by all 17 eurozone members "could be implemented within the terms of the current treaty".