Paris - Pressure mounted once again on debt-ridden eurozone economies on Monday, after last week's EU summit deal afforded only a brief respite from tensions on the financial markets.
Rating agency Moody's was first to turn the screw, declaring the talks had failed to produce "decisive policy measures" and threatening to review the credit ratings of all EU states within the next three months.
Meanwhile, traders were nervously watching to see whether Italy would be able to sell €7bn in bonds without paying sky high interest rates, and EU and IMF inspectors headed to Greece.
European markets opened down. London's FTSE 100 index began trading down 0.38% to 5 508.20 points, Frankfurt's DAX 30 was down 0.69% to 5 945.19 and in Paris the CAC 40 slid 0.67% to 3 150.84.
European leaders had hoped that Friday's agreement to move towards a fiscal pact, seeking to eradicate their public deficits under close EU supervision, would reassure markets of the safety of their debts.
But Moody's, the first credit agency to pronounce on the deal, complained of an "absence of decisive policy measures" and warned it would join Standard & Poor's in reviewing sovereign debt ratings.
"The absence of measures to stabilise credit markets over the short term means that the euro area, and the wider EU, remain prone to further shocks and the cohesion of the euro area under continued threat," Moody's said.
Many market analysts were also scathing about the measures, but said traders might not be in a hurry to write off the plan immediately.
"It is possible that investors will hold their fire to see what the ratings agencies make of the new plan," currency experts Moneycorp said in its daily note to investors.
"If the agencies downgrade euroland sovereign risk... that would mean more pain for government bonds and, in turn, more losses for the banks that would have to mark down the value of their bond holdings," it said.
The first big test of market confidence was due to fall immediately, as Italy sought buyers for €7bn in government bonds to fund its debt while Prime Minister Mario Monti pursues austerity measures.
The bond sale came amid nationwide strike action against the cuts, and Monti's newly-installed technocratic government warned of "an extreme financial and economic emergency".
If buyers insist on high interest rates on the debt it could threaten the government's deficit reduction plan and act as a signal that even Europe's biggest economies will struggle to escape the crisis.
Meanwhile, Greece was to hold tense talks with its international creditors and debt holders on the application of a new eurozone bailout designed to alleviate the country's huge loan repayments.
Greek Finance Minister Evangelos Venizelos was to meet with senior auditors from the European Commission, the European Central Bank and the International Monetary Fund (IMF) from 09:00 GMT, his office said.
"There will be negotiations on the new programme," a finance ministry source said, referring to the eurozone lifeline thrown to Athens in late October which includes a 50% writedown on the country's debt.
Venizelos was then scheduled to meet with Institute of International Finance chief Charles Dallara, who represents the banks that will be forced to take a "haircut" or writedown on their Greek debt holdings.
The minister has warned of "a hard battle ahead" under "very difficult conditions in Europe and the world".
Greek reports said the international representatives were also expected to discuss a new tax code to be put to parliament by next month, and a private sector pay freeze to cut operating costs.
Athens was forced to seek EU-IMF bailouts last year after markets turned on it because it had provided inaccurate deficit data and built up an unsustainable debt mountain of more than €350bn ($470bn).