Greek Prime Minister George Papandreou has said his government is determined to meet all obligations agreed with international lenders in exchange for an EU-IMF bailout.
Following a 25-minute conference call with French President Nicolas Sarkozy and German Chancellor Angela Merkel this evening, a Greek government spokesman said that ''despite recent rumours, all parties stressed Greece will remain in the eurozone".
France and Germany said they were convinced that debt-ridden Greece's future lay in the eurozone.
"The Greek prime minister confirmed his absolute determination to put in place all the necessary measures to carry out all of the commitements made," it added.
The credit ratings of two French banks have been cut because of their exposure to Greece's debt, highlighting growing risks to Europe's financial sector from a deepening euro zone sovereign debt crisis.
But the euro and European stocks have been lifted by an announcement by the head of the European Commission that it will soon present options for issuing a common eurozone bond, despite huge political hurdles especially in Germany.
Moody's one-notch downgrade of Societe Generale and Credit Agricole came hours before the leaders of Greece, France and Germany were to hold a video conference on measures to head off a potential Greek default.
Moody's kept BNP Paribas on review for a ratings downgrade saying the bank's profitability and capital base provided an adequate cushion to support its Greek, Portuguese and Irish exposure.
France's biggest bank announced a plan to sell €70bn in assets to help ease investor fears about leverage and funding that hit its two main rivals.
With senior EU and IMF inspectors due in Athens on Monday to check Greece's faltering compliance with its bailout plan, Chancellor Angela Merkel and President Nicolas Sarkozy were set to press Prime Minister George Papandreou to enforce harsh austerity measures to meet fiscal targets.
"We want a guarantee that the recovery plan announced will be put into action," French government spokeswoman Valerie Pecresse said. No statement would be issued after the call.
While Europe's leaders struggle to avert a first default in the 12-year-old single currency area, the head of the European Union's executive has challenged them to prepare for a great leap forward in fiscal integration that would be deeply divisive.
European Commission President Jose Manuel Barroso told the European Parliament that closer union, particularly in the 17-nation euro area, was the only way to reverse the negative cycle in financial markets.
"Today I want to confirm that the Commission will soon present options for the introduction of eurobonds. Some of these could be implemented within the terms of the current treaty, and others would require treaty change," he said.
But he warned that such bonds, which face political and legal obstacles in Germany and other north European creditor states, were no silver bullet to end the crisis, and could only be part of a comprehensive plan.
A German Finance Ministry spokesman reaffirmed Berlin's opposition to the idea but said it awaited the proposals.
EU Economic Affairs Commissioner Olli Rehn said issuing common eurozone bonds would require much more intrusive surveillance of member states' fiscal and economic policies, which would have to be fully debated in each country.
China and the United States have both voiced concern that eurozone governments may be losing control of the debt crisis.
Chinese Premier Wen Jiabao said Beijing was willing to help its biggest trading partner, but added that Europe must stop the crisis - which now threatens Italy - from growing.
"What we have to take note of now is to prevent the sovereign debt crises from spreading and expanding further," Wen said on Wednesday in an apparent response to pleas to buy more euro zone government bonds.
Wen's comment echoed concerns voiced by US President Barack Obama who earlier this week urged the big euro area states to take responsibility for supporting weaker members and called for a "more effective coordinated fiscal policy".
