Investors are calmer because they have set their hopes on a "comprehensive package" of measures that, European Union officials promise, will dispel any doubts over the bloc's ability to deal with even the most severe shocks.

One thing is clear: If its contents disappoint, politicians will have missed their chance to finally get one step ahead of the bond market vigilantes that have so far driven the pace of the crisis and their response. At their summit Friday, EU leaders will wrangle over what exactly will go into that package.

"The markets have been increasingly optimistic on the final outcome» of current discussions, said Marco Valli, chief euro zone economist at UniCredit in Rome. But, Valli cautioned, any solution will also require concrete measures in the weaker euro zone states, and even then an eventual sovereign default cannot be ruled out.

No firm decisions are likely before another summit at the end of March, Brussels diplomats warn, but Friday's get-together — originally convened to focus on energy and innovation — will provide a key opportunity to compare, and clash over, different ideas.

"We are at a key moment," a French government official said Thursday. "The markets are turning; the doubt that existed over the solidity of the euro and the solidarity of the euro zone is dissipating. It's the moment to take a big step ahead. So we are ready to put all these subjects on the table." The official declined to be named in line with department policy.

The offerings are plentiful. The European Commission, the EU's executive, has thrown its weight behind boosting the powers of the European Financial Stability Facility, the euro zone's contribution to the region's 750 billion-euro bailout fund.

Among the suggestions: Letting the facility buy the bonds of vulnerable governments on the open market, thus stabilizing their price and borrowing costs; providing countries with a short-term liquidity line when one-off measures like expensive bank recapitalizations present threaten to sink their finances (as with bailed out Ireland), or even lending them the money to buy back their own bonds.

Right now, bonds issued by cash-strapped states like Greece, Ireland or Portugal are trading at a discount due to doubts over the governments' ability to pay them back — theoretically making a buyback an easy way of cutting a country's overall debt.

To do that, the EFSF would likely need more money and the commission has asked states to lift the fund's effective lending capacity to the 440 billion euros initially advertised.

At the moment, it can only lend about 250 billion euros due to various buffers required to make the EFSF's bonds attractive to investors.

On top of that, there's a push to cut the interest rates already bailed-out Greece and Ireland have to pay for their rescue loans. New bank stress tests, to be published this summer, are meant to clear up holes in the European banking system that that previous rounds of tests failed to reveal.

If decided, these measures would constitute a fundamental overhaul of Europe's crisis strategy. So far, that strategy has revolved around offering expensive bailout loans to countries on the brink of bankruptcy in return for painful budget cuts and economic restructuring.

Many analysts have warned that those cuts make it almost impossible for already struggling economies to start growing again. The European Central Bank has also supported a wider role for the EFSF, all too happy to abandon its own government bond buying program and focus on keeping inflation in check.

But Germany, the euro zone's largest economy and the biggest contributor to the bailout fund, is reluctant to put up more money for other government's problems and mistakes. Before an overhaul of the EFSF, Berlin wants assurances that the euro zone's stragglers get their economies and budgets in order.

Together with French President Nicolas Sarkozy — whose government is much more open to transforming the bailout fund — German Chancellor Angela Merkel will present her own package of measures, dubbed the "pact for competitiveness," over lunch with the their European counterparts.

And what France and Germany plan to put on the menu will be hard to swallow for some of them.

The pact, widely leaked by government officials, includes demands for countries to introduce "debt brakes" into their national constitutions, align retirement ages with life expectancy and other demographic developments, get rid of automatic salary increases in line with inflation, and find a common basis for corporate taxation.

For the Germans it's clear, an overhaul of the EFSF can only happen if other countries do their part. "For us this is all one big package," said a German government official, also speaking on condition of anonymity.

Deciding what goes into the package won't be easy, but for the first time since debt fears gripped Greece more than a year ago, they have the luxury of time to find their response.

"The time has come where one has to move from reactive to proactive," said Andre Sapir, a fellow of Brussels think tank Bruegel. "Governments are realizing that they have to fulfill these expectations."