PARIS (AFP) ― Europe’s stock markets mostly rode out Standard and Poor’s downgrade of several eurozone players when they reopened stable on Monday, but the single currency itself remained under pressure.

Meanwhile, in a sign of trouble to come, European banks stowed record sums in the ECB for safe keeping and a top IMF official warned the eurozone faces a “downward spiral” if it fails to get its governance in order.

France’s President Nicolas Sarkozy received a boost when Moody’s declined to match rival agency S&P in stripping Paris of its “AAA” credit rating headed for crisis talks in Spain with clouds gathering.

And Paris was further buoyed when it successfully sold 8.59 billion euros in short-term bonds paying a lower rate of interest than at a previous similar auction despite the loss of its top-line rating.

“An investment is rarely risk free, which is why it is often profitable.

But a risk free investment does exist; that’s an investment in the sovereign wealth of our country,” said French finance minister Francois Baroin.

Eurozone banks, however, took a more gloomy view of the situation.

They put 493.3 billion euros ($623.7 billion) on 24-hours deposit with the European Central Bank overnight Sunday, topping a record set on Friday of 489 billion euros and highlighting fears of a credit crunch.

Meanwhile, IMF First Deputy Managing Director David Lipton warned Asian finance and banking chiefs meeting in Hong Kong of trouble ahead.

“Europe could be swept into a downward spiral of collapsing confidence, stagnant growth, and fewer jobs,” he said. “In today’s interconnected global economy, no country and no region would be immune from that catastrophe.”

European leaders are due to meet on Jan. 30 to agree a new fiscal pact to coordinate deficit reduction programs and attempt to reassure the bond markets that they are on top of the sovereign debt crisis.

But Friday’s S&P downgrade of nine European economies and stalled talks between private lenders and debt-wracked Greece have raised fears that the markets will not be content to wait until governments provide answers.

The agency’s decision “points to inadequate governance within the eurozone as a risk factor,” Italy’s Prime Minister Mario Monti told journalists after meeting the European Union’s President Herman Van Rompuy.

Greece promised to resolve its disagreements with creditor banks to allow for an orderly “haircut” on its debt, rather than running the risk of a “hard default” that would surely trigger market panic.

“The discussions which are ongoing have I think helped us to reach a point, which is close to an agreement, but some further reflection is necessary on how to put all the elements together,” Prime Minister Lucas Papademos told CNBC.

Sarkozy, who saw France stripped of its top “AAA” credit rating, was in Spain to receive an award from King Juan Carlos in Madrid before holding a working meeting with Prime Minister Mariano Rajoy.

S&P’s rival Moody’s gave Sarkozy some welcome relief on Monday when it said it would not follow suit but it also warned that it was still reviewing whether to maintain its “stable” outlook on France.

Spain and Italy were both hit by two-notch downgrades in the S&P report card, piling pressure on governments and the euro in the run-up to the EU summit.

The euro remained under pressure but edged up to $1.2680 in London trading from $1.2677 in New York late Friday, when it plunged to a 17-month low at $1.2624 ― a level last seen in August 2010.

European stock markets stabilized after opening slightly down but the true test of the effect of France’s humiliating downgrade will come on Thursday, when it conducts its first large-scale bond auction as an S&P “AA+” economy.

France will try to sell between 7.5 billion and 9.5 billion euros in bonds ― with maturities of between two and 28 years ― and markets will be keen to see how much interest Paris will have to pay to find buyers.

If Sarkozy’s government finds itself saddled with high yields in the wake of its downgrade it will call into question the credibility of his deficit reduction plan and plunge the eurozone into further turmoil.

Already, by slapping nine eurozone members with downgrades and putting all the others bar Germany on notice that they are under scrutiny, S&P has undermined the European Financial Stability Facility.

The EFSF is supposed to act as a bailout fund to back-stop weak economies but it owes its own credit-worthiness to its “AAA” backers and now faces a downgrade of its own.

But German Finance Minister Wolfgang Schaeuble told Deutschlandfunk public radio: “The guarantees for the EFSF are largely enough for what it has to do in the coming months.”

Many European leaders are furious over S&P’s decision and are scrambling to restore their credibility ahead of the Jan. 30 summit ― the latest in what is now a long line of emergency “save the euro” meetings.

“Let there be no mistake: this is not a crisis of the euro as a currency,”

the European Union’s internal market commissioner Michel Barnier told the Asian Financial Forum on Monday in Hong Kong.

“The euro is here to stay. In the last 10 years the euro has proven itself as a true world currency... And despite the difficulties, it remains strong.”