BRUSSELS, Belgium – Leaders of the world’s largest economies gathering for the G20 summit in Mexico are presenting a united front in promoting growth and job creation in order to repair a global economy laid low by the financial crisis in Europe. However, among the 17-country group that uses the euro, there still appears to be little concrete agreement over how best to solve the problems of too much government debt holding back the region’s recovery.

A narrow victory for the New Democracy party in elections over the weekend in Greece means that the country is more likely to stick to the harsh austerity terms of its (euro) 240 billion ($26.8 trillion) bailout package and avoid a chaotic exit from the euro in the very near future — an event many fear would destabilise Europe and send shockwaves through the world.

However, news of the election result has not given Europe the breathing space it needed to sort out its problems.

Greece’s economy is still in a very vulnerable state. The country is in a fifth straight year of recession and could easily deteriorate to point where a default and euro exit were inevitable. It is looking to renegotiate some of the harsh austerity terms and conditions of the (euro) 240 billion bailout it relies on to pay its way — something that other European countries such as Germany are opposed to.

However, a European Union official speaking in Brussels yesterday argued that the terms of Greece’s bailout will be renegotiated because worsening economic conditions have made the old bailout agreement an “illusion”.

The remarks highlight come amid a fierce debate over how much leniency Greece should be shown in meeting the targets it agreed to in order to secure its bailout loan.

The official, who spoke on condition of anonymity, citing policy, said that the goals of the agreement would not be changed: They remain to reduce Greece’s debt to a level that is sustainable and to reform its economy to make it competitive. But how those goals are achieved — and over what time period — will be up for discussion.

Meanwhile heavily indebted Spain and Italy continue to see their borrowing costs rise, increasing pressure on their government finances and keeping alive fears that another big bailout might be needed. That would considerably strain the eurozone’s ability to protect its members and keep the currency union together.

Finance ministers from the 17 countries that use the euro meet in Luxembourg on Thursday to discuss how best to solve the problem that threatens to place larger and larger demands on national budgets and further destabilise the region’s economies. Europe is a substantial trading partner with the rest of the world. If it falls into a deep recession sparked by a default in Greece or a massive bailout for Spain, orders for goods made in the US and China are going to start falling off.

At the moment, the debate centers on whether to take the dramatic step and push for greater banking, fiscal and political union in order to rescue the single currency. However, there are concerns, especially in Germany, that this is a long-term solution and can’t be rushed into when the legal and political framework is not in place.