Greece needs a collective effort by itself, the International Monetary Fund (IMF) and the rest of the euro zone members to resolve the crisis, according to Zhu Min, Deputy Managing Director, who spoke to CNBC from the summer meeting of the World Economic Forum in Dalian, China.
"We must work together, it is the way out but politicians and governments must take decisive action now. In Greece's case we stick with the program and successfully prevent the sovereign risk contagion to the financial, particularly banking sector that is the way out," Zhu said.
Zhu Min took up his position in July as the IMF's first deputy managing director from an emerging economy – a role created by Christine Lagarde in the initial days after taking up her tenure at the helm of the IMF. The appointment was seen by some as appeasing the increasingly vocal opposition within emerging markets economies to the appointment of yet another European as the managing director of the IMF.
Zhu added that it was necessary for a capital buffer to be created to ensure the spread of the crisis was contained.
"We encourage Europe further to build a capital buffer for the banking sector. We think it's absolutely important to maintain the stability of a safe and sound banking system, it's a top priority for the current European situation. We must now implement the program," Zhu said.
Despite the 'great job' of the Greek government, Zhu warned there was still much to be done, which would not be easy.
"These are fundamental structural issues and it is not easy. There is nothing you can do without the pain and you have to commit," he said.
Zhu said the key issue in the short term for the euro zone was the European Financial Stability Fund (EFSF) – the bailout fund for the euro zone.
"We very much hope that these countries can endorse the decisions taken in July so that we can make the EFSF immediately available with flexible usage of the money. This is very important to stop the risk of contagion going any further," Zhu said.
Euro zone leaders agreed in July that the funds size should increase to 440 billion euros ($607 billion) with increased powers to intervene in stricken economies. On Wednesday, Austria failed to approve the changes to the EFSF with the vote potentially being delayed until October. Germany's parliament will vote at the end of the month.
Zhu told CNBC that without a fiscal union the problems of the currency union could not be fully and permanently resolved.
"More and more people realise that we need a fiscal union and with the EFSF we see more fiscal union. (Jean –Claude) Trichet has even mentioned we need a ministry of finance for the whole of Europe. More people also realise we need enhanced government structure in the whole region to ensure the currency union will work," he said.
In what appeared to be a plea to euro zone countries Zhu said the Fund was keen to be actively involved but members must require its services.
"The fund has always taken a very active role in participating with its members. In the past eighteen months we have been working very closely to solve these issues. The situation changes very fast and it's a daunting task," he added
Euro zone finance ministers meet in Poland on Friday to discuss the issue of Greece, which requires the next tranche of EU aid – 8 billion euros - before the end of the month to avoid running out of money in October. US Treasury Secretary Tim Geithner will also be in attendance.