Rating agencies must play second fiddle to the EU, the ECB and the IMF when it comes to deciding the fate of debt-ridden Greece, German chancellor Angela Merkel said today.

'I think it's important that we in the Troika - the International Monetary Fund, the European Central Bank and the European Commission - don't allow ourselves to relinquish our freedom to judge,' she told reporters at a news conference.

'That's why I trust in the evaluations of these three institutions when it comes to specific procedures' rather than those of rating agencies.

Germany and France have been at the forefront of European efforts to bail out Greece; rating agencies have warned this could amount to a debt default.

The proposals centre on voluntary renewal by the private banks of debt, in the form of bonds, of from five to 30 years that would give Athens some breathing space without actually reducing the amount it owes creditors.

The main point of the exercise is to ease the burden on Greece while avoiding at all costs triggering a debt default which would be disastrous for the country and the wider euro zone.

Mrs Merkel's comments come as the German Constitutional Court has opened hearings on complaints against bail-out loans for Greece and European Union emergency funds.

The highest court in Karlsruhe, south-western Germany, considered appeals against the government's decision to contribute to rescue funds for Greece last year and the European Financial Stability Facility, which was established a short time later.

The government's decision committed Germany to guaranteeing loans of up to €22.4 billion for Greece and €211 billion for other euro zone countries.

Finance Minister Wolfgang Schaeuble, defending the government, attended in person to tell the court that Europe had to act in 2010 to prevent contagion from struggling countries to the rest of the currency union.

'The danger of such contagion... justified the need to help Greece in April 2010 with coordinated bilateral loans,' Schaeuble said.

A ruling is expected only in a few months, but questions posed by the court should indicate the issues it considers most pertinent, and it could bolster the German parliament by acknowledging additional supervisory powers, observers said.

Germany's partners within the 17-nation euro zone will follow the proceedings closely given a popular undercurrent of resistance to aid from the bloc's economic powerhouse.

A group of lawmakers within the Bundestag, including within chancellor Angela Merkel's conservative coalition, have become outspoken objectors for the discontent.

Some claim the rescue measures violate no bail-out terms of the Maastricht Treaty, or the German constitution.

The court's ruling is also expected to consider Germany's participation in the European Stability Mechanism, the permanent rescue fund expected to replace the EFSF in mid 2012.

'We find ourselves on a path we cannot see the end of, and we want to know if this is the right path,' said Joachim Starbatty, a university professor who was one of the first to file a complaint with the court.

Earlier, Schaeuble had argued in a statement to the court that Berlin had to stand alongside its euro zone partners, saying 'a common currency cannot make it without solidarity among its members.'

A jurist by training, Schaeuble also noted that European treaties allowed for the possibility of EU member countries providing 'mutual support' in times of trouble.

Banks meet to discuss French plans on Greece

Meanwhile, international banks were due to meet in Paris today to discuss France's proposed plan for the private sector to contribute to Greece's bail-out effort, people familiar with the matter have told Reuters.

The meeting was due to be overseen by the Institute of International Finance lobby group, the sources said.

The IIF on Friday said banks supported proposals to aid Greece and were considering a small number of options, and bankers are trying to hammer out details of those options.

The IIF could not immediately be reached.

The sources said getting clarity on the accounting treatment of France's plan remains a key issue to getting momentum.

The IIF, which represents insurers and other financial firms as well as banks including BNP Paribas, Deutsche Bank, HSBC and Société Générale, is playing an informal role coordinating international banks to reach consensus about private-sector involvement in a bailout of debt-ridden Greece.

Greek finance minister Evangelos Venizelos said this afternoon that Greek banks are willing to take part in a rollover.

Venizelos tweeted that 'Financial stability in Greece is a key point for financial stability in the euro zone'.

'We are a member of the European Union and a member of the euro zone,' he said. 'This is definitive and not a reversible situation.'

Finnish warning on new bail-outs

Finland's new finance minister says the country will demand guarantees against participation in any new euro area bail-outs and wants private investors to bear more of the burden.

'We want to limit Finland's responsibilities. The new government has taken a tougher stance than the previous government regarding crisis countries' aid packages,' Jutta Urpilainen told in a television interview with public broadcaster YLE.

She said guarantees could be shares in a company managing a struggling euro state's properties.

Ms Urpilainen admitted Finland's demands had not met wide support in other euro area countries.

In Finland the parliament, unlike in other euro zone countries, retains the right to approve funds for aid packages to euro area countries such as Greece, Ireland and Portugal.

Ms Urpilainen was appointed finance minister last month after her party, the Social Democrats, joined the coalition government led by the right-leaning National Coalition.

The government has promised to keep Finland on a pro-European course despite the growing popularity of the euro-sceptic True Finns party, which is against the country's participation in bail-outs.