European finance ministers have agreed to boost resources of the International Monetary Fund to shore up the embattled common currency, the euro.

The 17 eurozone ministers meeting in Brussels Tuesday agreed to explore new ways of increasing IMF resources through loans among the member nations.

Ministers also decided to allow the rescue fund to insure the first 20 percent to 30 percent of potential losses incurred by investors who buy government bonds issued by financially troubled countries .

The chairman of the group of eurozone ministers, Jean-Claude Juncker, said both actions would be take effect by January.

Fears about the euro’s survival have intensified as borrowing costs for debt-plagued Italy, with the eurozone’s third largest economy, shot to their highest point ever. Italy was forced to pay nearly 8 percent interest on a three-year bond, well above the 7 percent threshold that forced Greece, Ireland and Portugal to secure international bailouts in the last year-and-a-half.

The Athens government, however, got one bit of good news. After months of debate, the finance ministers decided to release an $11 billion segment of Greece’s 2010 bailout to help it avert a default next month.

Meanwhile, Britain, with a large economy and its own currency, cut projections for economic growth this year and next. Chancellor of the Exchequer George Osborne said the country’s budget deficit will be worse than first predicted, and that more spending cuts will be needed.

As Europe’s debt crisis has worsened, some analysts and European officials have acknowledged that the monetary union could collapse, or that weaker governments could leave the bloc. That raises the possibility of a worldwide recession, leading to new economic difficulties for the United States, the world’s largest economy.

Polish Foreign Minister Radek Sikorski said a eurozone collapse would be “apocalyptic.”

The Organization for Economic Cooperation and Development said Monday that the European Central Bank needs to sharply increase its purchase of bonds from European governments to cut their borrowing costs and ease their funding problems. But Germany has adamantly opposed an increased role for the continent’s central bank, saying that some countries, like Germany, would then lose their top credit ratings.