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European Commission chief Jose Manuel Barroso tells MEPs that Greece will stay in the eurozone but warns the EU is facing its "greatest challenge".

France is ready to do whatever it takes to rescue Greece, the government said, and urged the debt-laden euro-zone member to swiftly implement the July 21 plan to prevent bankruptcy.

Markets declined on Friday in the wake of President Obama’s jobs speech that added to the uncertainty already weighing on global markets over the euro zone.

By insisting that it receive collateral from Greece in return for aid, Finland threatens to upend an agreement that euro zone countries made in July to expand the E.U. bailout fund.

U.S. President Barack Obama and German Chancellor Angela Merkel discussed the eurozone crisis and financial-market turbulence on Saturday and vowed action to bolster the global economy, the White House said in a statement.

Standard & Poor's cuts Greece's credit rating, saying eurozone plans to restructure the country's debts would constitute a default.

European Council President Herman Van Rompuy has called an emergency meeting of top officials dealing with the euro zone debt crisis for Monday morning, reelecting concern that the crisis could spread to Italy, the region's third largest economy.

Hours of talks between eurozone finance ministers on the imploding finances of Greece broke up early Monday morning without the ministers signing off on a vital installment of rescue loans needed to avoid bankruptcy next month.

Eurozone finance ministers meet in Luxembourg, where they are expected to approve a 12bn-euro (£10bn) loan to debt-stricken Greece.

Worry about lack of substantive progress towards a blueprint for tackling the euro zone debt crisis kept investors on edge, traders said. In the United States, consumer inflation rose more than expected in May.