Greece is making a "superhuman effort" to slash debt, Prime Minister George Papandreou said Tuesday as he prepared to meet German Chancellor Angela Merkel for crunch talks on tackling the eurozone crisis.

Papandreou hit out at Greece's critics, saying that to single out Athens for "punishment and scorn" was anything but constructive as he addressed a conference organised by German employer federation BDI ahead of his meeting with Merkel,

"If people feel only punishment and scorn, this crisis will not become an opportunity, it will become a lost cause. And we are determined to make this a success," the Greek leader said.

Pillorying Greece was "frustrating not only at a political level, where a superhuman effort is being made to meet stringent targets in a deepening recession, but frustrating for the Greeks who are making these painful sacrifices and difficult changes."

It is going to take "years to make these major changes," he said, adding: "We are simply asking for respect for the facts."

Greek Finance Minister Evangelos Venizelos said meanwhile in Athens that the payment would be made "on time" in October.

"It is ridiculous to say that Greece or a European country will go bankrupt," Venizelos said on his return from Washington where he attended meetings of the IMF and the G20.

Greek authorities say they need the eight-billion-euro (11-billion-dollar) to continue paying the bills, amid growing social unrest and increasing speculation the country will default and plunge the euro even deeper into crisis.

Officials say Greece may announce a number of privatisation deals this week as the debt-hit country comes under increasing pressure from its creditors to meet tough fiscal targets.

"I can guarantee that Greece will live up to all its commitments. I promise you we Greeks will soon fight our way back to growth and prosperity after this period of pain," Papandreou insisted.

The Greek leader said decisions made by European leaders on July 21 to expand the scope and size of the EU's rescue fund were "steps in the right direction.

"For Greece it gives us the breathing space for our reforms to yield results," he said.

To sustained applause, he said he would not take domestic political pressure into account in his efforts to solve the crisis.

"What many ask me, is 'but do you have the support?' Whether I am re-elected or not is not my problem, my problem is to save the country," he said.

He compared the efforts Greece is undergoing to the rebuilding of the former communist East Germany after German reunification.

"The fall of the Berlin Wall heralded the end of division in Europe. Now is not the time to rebuild walls in Europe," he said.

Stock markets around the globe rallied sharply on Tuesday amid hopes European leaders will finally get a grip on the long-running crisis which is threatening the euro project.

The meeting between Merkel and Papandreou at 8:00 pm (1800 GMT) on Tuesday comes two days ahead of a crunch vote in the German parliament to expand the rescue fund -- or European Financial Stability Facility -- for debt-mired Greece and other faltering countries.

Just eight of the 17 eurozone states have so far ratified the new EFSF powers agreed at a July summit.

In Germany, the bill is expected to pass but it is being seen as a key political test for Merkel, with some members of her governing centre-right coalition threatening to defect.

As a Greek debt default looms and the German economy slows, Europe and the world are looking to Berlin as the eurozone's paymaster to steer the euro to safety.

Europe's failure to tackle crippling Greek debt is "scaring the world," US President Obama warned on Monday as Germany rejected plans to boost funding for EFSF.

Europe "never fully dealt with all the challenges that their banking system faced," Obama said.

"It's now being compounded with what's happening in Greece," he said. "So they're going through a financial crisis that is scaring the world."