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Davos, Switzerland. The global elite had talked itself into an upbeat frame of mind as the Davos forum neared its climax on Saturday, but the Greek debt crisis still hung heavily over proceedings.

The annual World Economic Forum, a gathering of powerful figures in global finance and politics, had been overshadowed by Europe’s woes as leader after leader battled to convince delegates that salvation was in sight.

They are likely to return to this theme Saturday in a debate on the global economic outlook with International Monetary Fund (IMF) chief Christine Lagarde, World Bank president Robert Zoellick and British finance minister George Osbourne.

On Friday, European Central Bank president Mario Draghi and US Treasury Secretary Timothy Geithner expressed optimism that the eurozone had turned a corner, but markets closed lower amid jitters over Greek debt talks.

The Davos debates were to continue on Saturday with forum members keeping a close watch on Athens, where the government is trying to negotiate a debt writedown, and on Brussels, which is preparing to host a full EU summit on Monday.

EU economic affairs commissioner Olli Rehn expressed confidence that Greece would reach a hard--fought agreement with private lenders to write-off around 100 billion euros in debt just in time for the summit.

The lead negotiators for Greece’s private creditors said that Athens had reached “important understandings” in talks Friday.

Draghi gave an upbeat assessment of the situation two years after the debt crisis started infecting the eurozone’s weaker economies, although he urged governments to work faster to turn plans into action.

“The amount of progress is outstanding,” he said. “If you compare today with even five months ago, the eurozone area is another world.”

Draghi said that the fiscal compact most EU states — aside from Britain — are negotiating is crucial to efforts to resolve the crisis, praising governments’ willingness to give up sovereignty.

He said a lack of regulation was one of the main causes of the crisis, as well as underlying flaws in the banking sector.

“The time that has elapsed since then has seen an extraordinary development in the regulatory policy design. Much has been discussed and put on paper,” he said, warning however that there had been less implementation.

The deal under discussion in Athens would see private creditors take a “haircut” of at least 50 percent on 200 billion euros in debt. Previous talks stalled over the amount of interest to be paid on the remaining debt.

Any failure to strike a deal could trigger a messy default, which would be an economic disaster for Greece itself and a threat to banks holding too much sovereign debt while piling pressure on other eurozone states.

The Financial Times, meanwhile, reported on Friday that Germany wants Greece to surrender sovereignty over fiscal policy to a eurozone commissioner before it gets a second bailout.

The eurozone’s woes were again underlined when credit rating agency Fitch cut the ratings of five of its members including Italy and Spain, citing their poor finances and vulnerability to sharp turns in market sentiment.

However speaking the day after the US Federal Reserve cited the eurozone crisis as a reason for trimming its growth forecast, Treasury Secretary Timothy Geithner said there were signs the worst of the crisis was over.

“Europe is making some progress,” he told delegates, saying that over the past two months they had laid the foundations for a “more credible framework.”

Geithner said Europe needs a “stronger and more credible firewall” and hinted the US and emerging economies could supply the IMF with more funds to help the rescue effort.

“If Europe is able to do that, we believe that the IMF can play a substantive role. It can’t be a substitute for a European response,” he said.

Agence France-Presse