The European Union is seriously considering a ban on derivative contracts called credit default swaps (CDS) as some European leaders feel that financial speculation was responsible for the Greek crisis.

Officials in Germany, France and Greece worry that CDS traders are betting against countries and worrying the market unnecessarily at a time when countries need to raise huge amounts of cash in the capital markets to finance their deficits.

Germany is in the forefront asking US help to curb traders' bets on a possible default in the euro zone used to target countries in trouble.

German Chancellor Angela Merkel called on Washington to back proposals for restrictions on CDS that investors can buy to insure themselves against the risk of a corporate or sovereign debt default.

''The US needs to make a gesture. We believe that the persistent speculation against the eurozone countries must be dealt with as soon as possible," Merkel said.

Yesterday Greek Prime Minister George Papandreous sought US President barrack Obama's help in curbing 'unprincipled speculators' who have aggravated the situation in Greece (See: US will stand by Greece to resolve crisis: Obama).