Italian Premier Mario Monti has proposed using the eurozone's (EURO)440 billion ($555 billion) bailout fund to buy sovereign debt and ease pressure on Italian and Spanish borrowing rates.

Monti told a briefing at the close of the Group of 20 summit that using European Financial Stability Facility funds `'was one of the topics of conversation" among leaders. The news agency LaPresse quoted the Italian premier Wednesday as saying the idea would be discussed further when he meets with the leaders of Germany, France and Spain in Rome on Friday.

The leaders plan to come up with proposals for an EU summit the following week.

Spain's admission last week that it needs a bailout for its banks has sent both Spanish and Italian borrowing costs skyrocketing to perilous levels.