DAVOS, Jan 25: Chancellor Angela Merkel warned that Germany was not prepared to expose itself to further damage on the markets in order to save the eurozone as the IMF called for a pooling of rescue funds.

As Italy`s new prime minister voiced hope that Germany was willing to take on a greater role in the eurozone crisis, Merkel made clear that Europe`s biggest economy would only go so far to help struggling members of the single currency.

`We have said right from the start that we want to stand up for the euro, but what we don`t want is a situation where we are forced to promise something that we will not be able to fulfill,` Merkel told the annual Davos forum in Switzerland.

Merkel acknowledged Germany was the continent`s economic powerhouse but said that does not mean it could act at will. `If Germany, for example, on behalf of all the other member countries, were promising something that if the markets really attack us we would not be able to come up with then we have indeed an open flank,` she said.

The annual meeting of the world`s political and business elite began Wednesday amid a deep sense of gloom about the state of the world economy, particularly in the eurozone.

Negotiations to lend Greece more cash to stave off bankruptcy are in a quagmire while efforts to build up a firewall to protect others such as Spain and Italy have met significant obstacles.

EU members and the IMF have called for a boost to bailout rescue funds by merging the temporary European Financial Stability Fund with the permanent European Stability Mechanism (ESM).

In Rome, Italian Prime Minister Mario Monti said the outline of a solution to Europe`s debt crisis were taking shape thanks to greater willingness by Germany to boost the rescue fund.

But in Davos, Merkel said that there should be enough money to help out the likes of Greece and Portugal but there appeared no way to satisfy the markets.

`We have set up a temporary safety mechanism in the form of the EFSF ... so we have the necessary programmes.

Portugal, Ireland and Greece can be financed.`-AFP