Washington.- With new European Union leaders practically invisible and some national leaders acting largely for domestic political reasons, the burden of shaping a rapid and credible restructuring program for Greece has fallen primarily to the International Monetary Fund – exactly where proud European Union leaders had insisted it should not be.

Once again – as during the 2008 financial crisis and the more recent halt in European air traffic due to volcanic ash – European leaders have failed to surmount national interests and cobble together a coherent policy quickly enough to address a problem. In the process, they may have done permanent damage to the credibility of the European Union.

“There is no doubt that the European project has suffered structural damage from this,” said Jacob Kirkegaard, a research fellow in European affairs and structural reform at the Peterson Institute for International Economics here. “It’s clear that the I.M.F. is the last man standing and is structuring the program.”

Criticism is rising about the competence of European leaders, which has worsened the plight of all the countries in the euro zone.

Senior United States officials, while not wanting to interfere in a European problem, have nonetheless expressed their anxiety to European counterparts and to the monetary fund itself. President Obama called Chancellor Angela Merkel of Germany on Wednesday to lend his support and encouragement for her willingness to take a bolder position to try to calm the markets.

Mrs. Merkel has been the central figure in the debt crisis, as she has tried to respond to German voters’ displeasure at having to bail out Greece, after years of bailing out eastern Germany. She delayed action on the problem for months, hoping to put it off until after critical regional elections on May 9.

Ultimately, that proved impossible. But her foot-dragging, combined with her insistence that Greece pay a severe long-term price for its profligacy and that the German Parliament approve any bailout, gave the markets both reason and room to run up the price of Greek debt to unsustainable levels. That forced the International Monetary Fund and the Europeans on Wednesday to practically quadruple the commitment to Greece, to try to calm the markets and not turn their attention to Portugal, another weak reed.

“The fact that a German regional election can play such a disproportionate role in messing up efforts to contain what was a much smaller crisis several months ago is astonishing,” Mr. Kirkegaard said. And the fact that there will be no European Union summit meeting until May 10, after the German elections, “is so blatantly political,” he said.

“This is no way for an E.U. that has to contain an accelerating crisis and market panic to behave,” Mr. Kirkegaard said.

The European monetary union was simply “not ready for bad weather,” said Janis A. Emmanouilidis, a senior policy analyst at the European Policy Center in Brussels, saying it had no mechanisms in place to deal with issues of debt or the potential default of a member state. “In the absence of such clear mechanisms, you need political leadership,” he said. “But the past months have seen a lack of leadership.”

The same problem was raised earlier this month by the ban on European air travel because of the ash spewed by an Icelandic volcano. With no European Union agreement governing European airspace, national leaders struggled, with astounding delays, to coordinate a policy while both airlines and passengers suffered.

But even worse, “the current crisis has done enormous political damage,” Mr. Emmanouilidis said. “It is decreasing the trust among member states,” he said, with Germany feeling betrayed by the “Club Med” countries of southern Europe, while those nations feel that Germany has procrastinated and shown an egregious lack of solidarity.

The outspoken Greek deputy prime minister, Theodoros Pangalos, has said that European Union leaders were “not up to the scale of the task” in dealing with the crisis.

“I believe if Delors was in charge in Europe, Mitterrand in France and Kohl in Germany, things would not be the same,” he told Greek television in February, referring to the former president of the European Commission, Jacques Delors; the former French president, François Mitterrand; and the former German chancellor, Helmut Kohl.

While there is blame to go around on the national level, there is also finger-pointing at the new European Union leadership. Herman Van Rompuy, president of the European Council, has been largely invisible in his efforts to coordinate national leaders.

A French member of the European Parliament, Philippe Juvin, vented to Agence France-Presse: “Where is the president of the European Council? What is the president of the Commission doing? Is there a European pilot in the Greek crisis? Or are they waiting for the collapse of the euro?”

But the Lisbon Treaty that created Mr. Van Rompuy’s position, and which was intended to make the enlarged European Union more agile and coherent, deliberately left out powers for coordinating fiscal policies, which are the fiercely guarded prerogative of the separate nations. Even so, countries like Germany can only blame themselves for not insisting on realistic European oversight of Greek statistics, which were widely believed to be false for two decades.

Some analysts argue that this latest crisis will inevitably mean further European integration, with more fiscal oversight and coordination. Constance Le Grip, a French member of the European Parliament, said that “it is clear that the E.U.’s hesitations have worsened the Greek situation.”

She added: “Pragmatism and the E.U.’s adaptation skills are not sufficient anymore. We have to create new institutional responsibilities, for a new European economic government.”

But others are doubtful, arguing that most Europeans are already fed up with “more Europe” and that Germany, which might like to meddle in the budgets of others, would never accept any meddling in its own. It is also very likely that the German Constitutional Court, which has put limits on the ceding of sovereignty, would throw out any such oversight.

Some, like Mr. Kirkegaard, fear that the German court will rule against the Greek bailout funds, too, especially if they are spread out, as now envisaged, over a three-year period.

Still, this continuing crisis is leading to a more fundamental one, about European and national capabilities. “Questions are asked to nations, not to the E.U. – but nations cannot deal with this problem alone,” said Dominique Reynié, director of the Foundation for Political Innovation and a political scientist at the Institut d’Études Politiques de Paris. “The silence of the E.U. and its institutions has become deafening. It is incapable of demonstrating that an entity called Europe exists. This is a situation that cannot go on.”

The European Union “seems to be in a state of permanent self-promotion,” he said. “But it cannot ask its voters to relinquish part of their nations’ sovereignty and then not answer the call when there’s a problem.”

* Maïa de la Baume and Nadim Audi contributed reporting from Paris.

Europe Acts Swiftly on Long-Delayed Greek Bailout

Berlin – European leaders raced Thursday to complete their part of a long-delayed financial rescue package for Greece, hoping to head off a chain reaction against other heavily indebted European nations that could turn into a financial meltdown across the continent.

After balking for months at bailing out the Greek economy, leaders in Germany attacked the crisis with a newfound urgency. One day after Chancellor Angela Merkel declared her support for swift action, opposition parties in Berlin signaled a willingness to move quickly on legislation to send billions in loans to Athens before it needs to repay bondholders more than $10 billion on May 19.

Markets reacted positively Thursday to the news of a plan that would provide up to $160 billion from the International Monetary Fund and the other countries that use the euro currency. The euro strengthened against the dollar on the news, after hitting a one-year low the day before, and the cost of insuring against the default of European bonds fell.

European leaders – many of whom resisted the involvement of the I.M.F. and who have now been prodded to action by its director, Dominique Strauss-Kahn – have struggled for months for an effective response to the Greek problem. In the process, critics say, the costs of a bailout have mounted drastically.

And there was fresh skepticism on Thursday whether the latest proposal would calm the markets for more than a day, in a crisis where official promises of action have been followed by new delays and a steady stream of bad news, like the downgrades this week of the debt of Greece, Portugal and Spain.

Financial experts expressed fears on Thursday that Mrs. Merkel might have waited so long that the contagion had spread beyond even Germany’s ability to contain it. “These downgrades this week show that the market has taken over,” said Alfred Steinherr, research professor at the DIW research institute in Berlin and a former chief economist at the European Investment Bank. “Now, it is very difficult for policy makers to take it back into their own hands.”

There is a risk now that “even Germany will become financially overburdened,” Dr. Steinherr said, if it is forced to pay tens or hundreds of billions to Greece and possibly other euro-area countries like Portugal and Spain. “And that would then become really a huge crisis.”

European leaders tried to claim the initiative and show that they were working together to calm market fears over Greece’s tide of debt and the long-term viability of the euro currency. Traveling in Beijing on Thursday, President Nicolas Sarkozy of France told reporters that he was in constant contact with Mrs. Merkel and that Germany and France were “in perfect agreement” on how to deal with the crisis, a spokesman for the president in Paris confirmed.

Negotiators in Athens pushed to wrap up an agreement for significant cuts in Greek public spending to clear the way for the government to get financing and reassure investors worldwide that European debt was safe.

The Greek prime minister, George Papandreou, met with labor leaders on Thursday to persuade them to accept austerity measures that the government hopes will help clear the way to securing the bailout package.

After the meeting, Ilias Iliopoulos, the general secretary of Adedy, the largest public employees union, said in an interview that union officials had been informed that Greece had been asked to raise its value-added tax to 25 percent and to accept a three-year pay freeze.

He said Mr. Papandreou also intended to introduce new rules to let companies reduce their work forces by 4 percent a month instead of the current 2 percent, and to increase taxes on fuel, tobacco and alcohol.

In Greece, where taking to the streets is a national pastime, some observers have feared a backlash. But analysts said that Greek public opinion, opposition parties and even the unions realized the gravity of the situation and were unlikely to succeed in blocking measures that were necessary to save the country from economic collapse.

“The reaction of the unions so far has been mild by Greek standards,” said Nikos Magginas, senior economist at the National Bank of Greece, the country’s largest commercial bank. “Public opinion in Greece is in shock and realizes that Greeks have no other choice but to do what is necessary to prevent economic collapse. A social consensus exists that this is necessary.”

European leaders also sought to head off a harsh public reaction to the bailout plan. Olli Rehn, the European Union commissioner for monetary affairs, said at a news conference in Brussels on Thursday that the loan package would be a benefit to all member states sharing the euro currency – not just a sop for spendthrift Greeks. “This is absolutely crucial for our economic recovery,” he said.

Prominent German officials, including President Horst Köhler and Axel Weber, the president of the German Bundesbank, made public statements in support of Mrs. Merkel’s plan, with a similar emphasis on the benefits to Germany from such an agreement.

“Germany should, in its own interest, provide its contribution to the stabilization,” Mr. Köhler said in a televised speech in Munich.

“The German taxpayer profits from a stable euro, and that holds for protecting it,” Mr. Weber told Germany’s highest-circulation newspaper, the tabloid Bild, which has hammered relentlessly on the theme of Greek greed and wastefulness since the crisis began this year. The interview with Mr. Weber ran on the second page of the paper, while a giant headline on the front page declared, “Greeks want even more billions from us!”

“If Greece is allowed to fail, the damage to the German budget and German taxpayers will with certainty be greater than if we rescue it,” said Roland Koch, state premier in Hessen and a leading member of Mrs. Merkel’s Christian Democrats, in an interview on Thursday with the daily newspaper Berliner Zeitung. “The faster a decision is made, the less harm will arise,” Mr. Koch said.

It was unclear whether the pleas were having much impact. A poll of a thousand adults by the research group Emnid on behalf of the television news channel N24 found that 76 percent of those surveyed said they did not believe Greece would repay its debts, compared with just 19 percent who thought it could.

“You don’t help an alcoholic by putting a bottle of schnapps in front of him,” said Frank Schäffler, a member of the Finance Committee in the German Parliament for the pro-business Free Democrats, the junior member of Mrs. Merkel’s governing coalition. But even Mr. Schäffler said the proposal was likely to pass Parliament quickly, now that opposition parties like the Social Democrats and the Greens were prepared to act.

“The population in Germany is with a very, very great majority against, and the Parliament will probably approve it with a very great majority,” Mr. Schäffler said.

Germany will raise its share of the money through KfW, the state development bank, according to lawmakers and a letter attached to a draft version of the bill sent out this week. The legislation is one page long and includes a one-page explanatory statement. In the version of the bill circulated to members of the government on Tuesday, the sum of $11 billion is listed for this year. The figure for the following two years was yet to be filled in.

* Dan Bilefsky reported from Athens. Reporting was contributed by Jack Ewing from Frankfurt, Matthew Saltmarsh and Katrin Bennhold from Paris and James Kanter from Brussels.

Euro Rises After I.M.F. Increases Aid Pledge to Greece

European stocks rose modestly and the euro halted its decline Thursday, a day after the International Monetary Fund promised to increase the 45 billion euro aid package for Greece to as much as 120 billion euros over three years to quell the I.M.F.’s biggest crisis since the Asian woes of 1997.

The fund is racing to conclude an agreement for more painful austerity measures from Greece by Monday, clearing the way for the government in Athens to receive funding and to reassure investors worldwide that European debt is safe.

On Wednesday, Dominique Strauss-Kahn, the I.M.F.’s forceful managing director, pledged the additional aid in a private meeting with German legislators. The package would be the equivalent of up to $160 billion and would come from both the I.M.F. and from Germany and other countries using the euro.

But as has frequently been the case during Europe’s debt crisis, the promise of help was overshadowed by more disturbing news – in this case, a cut in the debt rating of Spain by a major agency just a day after downgrades for Portugal and Greece.

The growing fear is that the fallout from Greece and even Portugal, which together compose just 5 percent of European economic activity, could be a mere sideshow if Spain, with its much larger economy, has difficulty repaying its debt.

By Thursday afternoon the euro was at $1.3254, up from $1.3220 late Wednesday in New York. The Euro Stoxx 50 index, a barometer of euro-zone blue chips, rose 1.4 percent, and the FTSE-100 index in London rose 0.6 percent.

Shares in the United States were higher as market attention on Wall Street shifted toward the stronger results from corporate earnings reports.

Most major Asian markets fell, with both the Hang Seng index in Hong Kong and the S.&P./ASX 200 index in Sydney dropping 0.8 percent. Tokyo markets were closed for a holiday.

In many ways, the current troubles in Europe go to the heart of the monetary fund’s new mission to serve as a firewall in the financial crisis – an objective bolstered by $750 billion in fresh capital from the Group of 20 countries last year.

Unlike its previous efforts in smaller, emerging economies in Asia in 1997, and more recently in Hungary, Romania, Latvia and Iceland, the International Monetary Fund has been hamstrung in its efforts to act quickly and decisively by political concerns within the European Union, which insists on assuming a leading role.

“It is a problem,” said Alessandro Leipold, a former acting director of the fund’s European department. “It should not be that difficult – they did it in Hungary and Latvia. But the egos are different in industrialized countries.”

A case can be made that if Greece had sought help from the fund late last year after the forecast for its budget deficit doubled, the amount of support needed to reassure investors would have been much less than the 120 billion euros that even now might not be enough.

In that vein, Mr. Leipold said Portugal and Spain should ignore any stigma associated with an International Monetary Fund program and make the case to the European Commission in Brussels that asking for aid now would soothe skeptical markets and save Europe billions in the future.

“The market has seen its worst fears come true,” he said. “What it needs is a surprise on the upside.”

Concerns have already surfaced in Washington that the broad demands of the sovereign debt crisis will quickly exhaust the fund’s reserves and leave the United States, the fund’s largest shareholder, with the bill.

Representative Mark Kirk, a Republican from Illinois, said such a drain could occur if Portugal, Ireland and Spain all sought aid at the same time. Mr. Kirk worked at the World Bank during the 1982 debt crisis in Mexico, which came close to depleting the fund’s reserves.

“We have seen this movie before,” he said. “Spain is five times as big as Greece – that would mean a package of 500 billion.”

Mr. Kirk sits on the House Appropriations Committee that oversees I.M.F. funds and said that he had already asked for hearings on the fund’s ability to handle a European collapse.

In Athens, the Greek government had no choice but to seek a solution with the monetary fund after its costs of borrowing skyrocketed, but that has not made the negotiations for aid any easier.

The fund has sent one its most senior staff members, Poul Thomsen, who has overseen complex fund negotiations in Iceland and Russia, to assist Bob Traa, the official responsible for Greece, to work out a solution.

According to people who have been briefed on the talks, the aim is to secure from Greece a letter of intent for even deeper budget cuts than the tough measures imposed so far, like reductions in civil service pay, in exchange for emergency funds.

Steps being discussed include closing down parts of the little-used Greek railway system, which employs 7,000 people and is estimated to lose a few million euros a day; limiting unions’ ability to impose collective bargaining agreements, which lead to ever-higher public sector pay; cutting out the two months of pay that private-sector workers get on top of their annual pay packages; increasing the retirement age and cutting back on pensions; and opening up the country’s trucking market in an effort to lower extremely high transportation rates that have hindered the country’s competitiveness.

With Greece now shut out of the debt markets, it has little leverage to resist – especially in light of the 8 billion euros it needs to repay bondholders on May 19. Analysts expect a deal by next week at the latest.

But whether a Greek resolution calms investor fears about the ability of Portugal and Spain to repay their own maturing debt remains unclear.

In a recent note to investors, Ray Dalio, founder of Bridgewater Associates, one of the world’s largest hedge funds, described the market concern as intensely focused on Spain.

“Spain’s cash flows (current account and budget deficit) are extremely bad,” Mr. Dalio and his colleagues wrote in a February letter. “Spain’s living standards are reliant on not just the roll of old debt, but also on significant further external lending. For these reasons, we don’t want to hold Spanish debt at these spreads.”

* David Jolly, Matthew Saltmarsh and Sewell Chan contributed reporting.