Concerns were also intensifying over the debt restructuring of state-owned conglomerate Dubai World, which pushed the cost of insuring Dubai sovereign debt against default 11-month highs.

The premium investors demand to buy 10-year government bonds in Portugal and Ireland - other highly indebted euro countries - rather than German benchmarks rose.

At a meeting in Brussels on Monday euro zone finance ministers exerted more pressure on Greece to implement planned budget deficit cuts and some stressed that Greece itself must solve its own problems.

World stocks held steady in trading thinned by holidays in China and the United States. They posted its first weekly gain in a month last week, supported by expectations interest rates will stay low, especially in the euro zone where governments are coming under pressure to withdraw fiscal support.

The MSCI index was unchanged on the day, after posting its first weekly gain in a month last week. The FTSEurofirst 300 index gained 0.3 percent with banks such as HSBC and Barclays leading the way. Emerging stocks rose 0.3 percent.

The euro fell 0.2 percent to $1.3591, having fallen as low as $1.3529 on Friday. The dollar was unchanged against a basket of major currencies.

European Union leaders said last week the euro zone would take determined and coordinated action if necessary to safeguard financial stability, a vague pledge which disappointed investors.

Finnish Finance Minister Jyrki Katainen told Reuters Insider television on Monday that Greece must get the money it needs from the market. He added that if some EU countries can help Greece bilaterally it was up to them but not the EU as a whole.

Greek markets are shut for a holiday but five-year credit default swaps - measuring the cost of insuring sovereign debt against default - stood at 352 basis points on Friday.

Commerzbank said the level of CDS pointed to a default probability of 21 percent.

Meanwhile, oil prices on Monday extended losses caused by China's latest bid to cool down its booming economy, traders said.

New York's main futures contract, light sweet crude for delivery in March, was down by 23 cents at 73.90 dollars a barrel at about 1700 GMT.

Brent North Sea crude for April delivery shed 40 cents to $72.50 a barrel.

Trading activity was subdued amid holidays across much of Asia, including China, and in the United States.

Prices had plunged Friday on the back of China's latest attempt to control its booming economy.

The People's Bank of China announced it would raise the deposit reserve ratio for banks by 50 basis points as of Feb. 25, the second increase since the start of the year.

The hike in the ratio - the minimum amount of money that banks must keep in reserve and not use for lending or other purposes - was seen as the latest sign that Beijing is moving to prevent its economy overheating.

"While Beijing's tighter monetary stance should ward off inflation in the country and keep the domestic economy from overheating, it may also stifle interest in global commodity markets, including oil," said analysts at the JBC Energy consultancy in Vienna.

The market had dived last Friday also after news of an unexpected rise in crude stockpiles in the United States, indicating sluggish demand in the world's biggest energy consuming nation.

A key US inventories report for the week ending Feb. 5 said that crude stockpiles rose for a fourth week running, by 2.4 million barrels. That compared with analyst expectations for a gain of 1.3 million barrels.

Also, gasoline stocks rose much more than expected, according to the report, usually published on Wednesdays but delayed due to a snowstorm in the northeastern US.

Oil prices have been under pressure in recent weeks by stubborn concerns that the Greek debt crisis may infect other euro zone countries and hamper economic recovery - and demand for energy.

Euro zone finance ministers meeting in Brussels on Monday were expected to back an exceptional measure to instill some budgetary discipline into debt-plagued Greece.

EU leaders stopped short last Thursday of offering a bailout to rescue Greece.