By Sakari Suoninen and Sarah Marsh
FRANKFURT/BERLIN (Reuters) - The European Central Bank faced pressure on Thursday to take steps to help contain the euro zone's debt problems, but could upset financial markets if it fails to announce new anti-crisis measures.
Pressure has grown on the ECB to act since last weekend's 85 billion-euro ($110.7-billion) EU-IMF rescue of Ireland failed to dispel fears that other countries using the euro, such as Portugal or Spain, could require a bailout.
Suggestions that the ECB could rush through new action to handle the crisis at its monthly meeting on Thursday, such as expanding its government bond buying, have helped the euro stabilize and lifted stock markets.
German Economy Minister Rainer Bruederle said extra liquidity alone would not resolve Europe's debt problems and described the last U.S. fiscal stimulus package, injecting more money into the economy, as excessive.
"Permanently printing money is not the solution," German Economy Minister Bruederle said. "The money presses must not fall into the hands of politicians."
But the ECB could disappoint investors if it decides only to continue its current course of action -- keeping its liquidity taps for euro zone banks wide open -- and does no more than hint at more government bond purchases.
"The price action ... adds to risk that the market may be disappointed with today's outcome," Citigroup currency and markets strategists said.
International Monetary Fund chief Dominique Strauss-Kahn, visiting India, said the situation in Europe was "serious" and the IMF was ready to provide financial and technical support to member states if needed.
Ireland was the second euro zone country to be rescued by EU-IMF support after Greece's bailout in May. Some economists say the future of the euro is in doubt and fear contagion to Asia and the United States.
EU leaders deny the euro will collapse and dismissed reports on Thursday that they would call a special summit this weekend on the crisis.
Spanish Prime Minister Jose Luis Rodriguez Zapatero said Madrid would not need to tap any European Union funds to help it through its debt problems.
A Spanish bond auction was well received on Thursday, partly because of hopes linked to the ECB meeting, and Germany's Bruederle said there was a good chance Lisbon and Madrid would not need rescuing.
But even Germany, the euro zone's biggest economy, struggled to sell its bonds on Wednesday and Portugal's borrowing costs rose and some leaders are calling for close fiscal union -- tighter cooperation -- for the euro zone.
ALL EYES ON ECB
Markets were waiting to see how ECB President Jean-Claude Trichet would respond when he addresses media at 1330 GMT on Thursday. The bank's rate decision is expected around 1245 GMT.
Some investors hope the ECB will ramp up its government bond buying program, launched in May after Greece was bailed out. But others expect no more than hints in that direction, saying it is too soon for any conclusive announcement given a fierce debate within the ECB about the merits of such action.
Bundesbank head Axel Weber has called for the program to be scrapped and fellow ECB members have criticized the U.S. Federal Reserve's decision to buy $600 billion of U.S. debt.
In Washington, the White House said President Barack Obama was briefed regularly on developments in Europe, while a senior Treasury official was heading to Berlin for talks on the economic situation after meetings on Wednesday in Madrid.
"It's important to the global economy and to our economic recovery," said White House spokesman Robert Gibbs. A senior G20 source in Asia also told Reuters that deputy finance ministers discussed the situation on Monday.
A U.S. official told Reuters that Washington would support boosting an EU rescue facility via IMF funds although a Treasury Department spokesman later said "an extra commitment is not something we're discussing right now.
CALLS TO TEAR UP RULE BOOK
Economists have urged the ECB to tear up its rule book and do all it can to protect the euro, particularly since governments seem to be running out of ideas how to restore confidence in their monetary union.
Markets in Asia followed with Japan's Nikkei scaling a five-month high and markets elsewhere in Asia-Pacific climbing 1.3 percent.
Euro zone officials have admonished markets for doubting the currency bloc's ability to solve its problems but radical ECB action is among the few options left.
Germany has resisted pressure from France and others to turn the euro zone into a "fiscal union," a step that could help the bloc address its economic imbalances but require members to sacrifice sovereignty for the good of the group.
But Zapatero called for a "much more integrated fiscal policy" for the euro zone. (Writing by Timothy Heritage; Editing by Jon Boyle)