Austrian Chancellor Werner Faymann wants the European Union council to agree a growth pact at its next summit and invest in education, employment and infrastructure via "project bonds" as a first step towards euro bonds.
Faymann, a Social Democrat who governs in coalition with conservatives, also told Austrian daily Oesterreich that while an exit of Greece from the euro zone was in theory imaginable, it would be much more costly.
"I want us to decide on a growth pact for Europe already at the next EU Council," Faymann was quoted as saying. European politicians have been emboldened to speak out more in favour of growth over austerity since the election of Socialist Francois Hollande as French President last weekend.
Hollande has called for more financing for the European Investment Bank, European "project bonds" to fund infrastructure programmes, a financial transactions tax and better use of EU structural funds.
Austerity measures have provoked violent protests in some European states, particularly Greece. The country was plunged into turmoil last week after a general election boosted far-left and far-right groups, stripping mainstream parties, which back a painful European Union/International Monetary Fund bailout, of their parliamentary majority.
Faymann said he was very worried about the situation in Greece and Austria could only continue contributing to the bailout package for the country if it pushed through the agreed reforms. "No one can vouch for a bottomless pit, nor can we."
Asked if he could imagine a euro zone without Greece, Faymann said: "I do not wish it, in theory a lot is imaginable. I will only warn: it will be a lot more expensive than the current aid for Greece." Austrian Finance Minister Maria Fekter said that an exit of Greece from the euro zone was legally not possible."
"Greece would have to leave the European Union and then carry out membership negotiations. I cannot imagine that Athens can afford to renounce EU aid."
"The Greeks must realise that they have to adapt," she said, adding that Europe had managed to reduce the contagion effect from a possible Greek exit.