* Rehn calls for agreement on aid for Greece
* Says Europe should take the lead in the crisis (Adds quotes)
BRUSSELS, March 19 (Reuters) - The European Union's monetary affairs chief urged the bloc's leaders on Friday to agree on a clear standby aid package for Greece at a summit next week.
Olli Rehn, the economic and monetary affairs commissioner, underlined the importance of reaching a deal after Greece's prime minister held out the prospect of seeking help from the International Monetary Fund, a move that could embarrass the EU.
"It is essential that when we deal with a euro area country there is a European lead and a European responsibility," Rehn told a conference in Brussels.
He later told reporters it was important to conclude work on setting up a safety net for Greece in case the country requests financial aid to service its debts.
"It is important that the EU in the course of next week comes to a more specific conclusion, specific political conclusion about the European framework for coordinated and conditional action, if needed and required," he said.
Greek Prime Minister George Papandreou urged EU heads of state and government to make a clear pledge of financial support at a summit in Brussels next Thursday and Friday, and said Greece could turn to the IMF instead as a last resort.
Finance ministers from the 16 countries that use the euro currency drew up a standby plan this week to help euro zone member Greece financially if it needs it, but gave few details.
Germany, Europe's biggest economy, would be central to any European support for Greece but is reluctant to bail it out or to rush into anything before Athens shows it is willing to take the painful steps needed to fix its finances.
Rehn said Greece's problems showed a clear need for reinforced economic policy coordination in the 16-country euro zone.
"Greece is now on track to address its fiscal imbalances but we are not out of the woods with it yet," he said.
"The primary aim must be to ensure a safe exit from the current precarious debt dynamics in a number of countries and subsequently to make sure that no country in the euro area will embark on such a path in the future."
Speaking more broadly, he said the worst of the economic crisis was over but the recovery was not yet self-sustainable. (Reporting by Marcin Grajewski, writing by Timothy Heritage, editing by Dale Hudson)