Barroso says EU must decide on Greece plan this week

BERLIN, March 22 (Reuters) - European leaders must decide how to deal with Greece's debt crisis at a summit this week otherwise the euro zone's stability will be threatened, European Commission President Jose Manuel Barroso said.

In an interview with Germany's Handelsblatt business daily, Barroso called on European leaders to back the Commission's proposal for a system of coordinated bilateral loans to be made available to Greece.

European leaders meet in Brussels on Thursday and Friday.

"We need a decision at this summit on how to deal with Greece, otherwise the heightened uncertainty will go on and on," Barroso told the Handelsblatt in an interview published in its Monday edition.

"We can't carry on as we are, as this would threaten the stability of the euro zone and encourage speculation," he said.

If the Commission's proposed mechanism is approved, euro zone government leaders would have to give their consent before it is activated, Barroso said, adding that the plan did not break the 'no bailout' clause in the European Union treaty.

"Securing the stability of the currency union is in Germany's interest," he said. "I'm sure Germany will make a constructive contribution to resolving the current crisis."

"We need both solidarity and stability. Without solidarity there is no Union. And stability is in everyone's interests." (Writing by Paul Carrel, editing by Mike Peacock)