European stock markets mostly rose and the euro gained versus the dollar Monday as attention once more focused on the eurozone after a week dominated by US economic data and prospects of more stimulus.
In morning deals, Frankfurt's DAX 30 index gained 0.20 percent to 7,054.78 points, the Paris CAC 40 won 0.11 percent to 3,492.14 points and in London the FTSE 100 dipped 0.05 percent to 5,849.58 compared with Friday's closing levels.
Milan grew 0.70 percent and Madrid climbed 0.55 percent.
In foreign exchange deals, the euro climbed to $1.2353 from $1.2330 late on Friday in New York.
"European markets opened cautiously this morning as investors were tentative due to comments by the European Central Bank that they would intervene to cap borrowing costs for Spain and Italy," said Spreadex trader Shavaz Dhalla.
The European Central Bank is considering buying the bonds of crisis-wracked eurozone countries in a move that would ensure borrowing costs do not rise beyond a pre-determined level, German newsweekly Der Spiegel said Sunday.
The bank will define an upper limit for borrowing costs in countries such as Spain and Italy and intervene in the markets to ensure it is not breached, Spiegel said, without citing its sources.
Spain and Italy have seen their borrowing costs shoot up during the eurozone crisis to levels that forced Greece, Portugal and Ireland to seek a bailout.
Germany nonetheless downplayed the chances of such a decision, with a spokesman for the finance ministry saying: "Such an instrument would of course be very problematic."
As the leading contributor to eurozone bailout funds, Germany's position is key to any decisions.
Meanwhile, "Greece is also back on the agenda today," said Dhalla.
"Headline reports over the weekend have indicated that German policy makers have insisted there is no room for negotiation over Greece's current austerity measures.
"Thus, it seems today investors will ponder the possibility of Greece leaving the euro, again, because of excessive austerity measures imposed by eurozone officials as well as the potential that private funding to eurozone nations could dry up," he added.
A Greek exit from the eurozone would be "manageable" even if it would be expensive and result in higher unemployment, a top member of the European Central Bank was quoted as saying on Monday.
In an interview with the Frankfurter Rundschau, Joerg Asmussen, a German member of the ECB's Executive Board, was asked about the possibility of debt-wracked Greece being forced out of the eurozone.
"First: My preference is clear. Greece should stay in the eurozone. Second: It is in Greece's hands to achieve that. Third: A Greek exit would be manageable. Fourth: An exit would not be as orderly as some imagine," he said.
Such an exit would spark a slump in growth, job losses and would be "very expensive. In Greece, in Europe and in Germany," said Asmussen.
His comments came at the start of a crucial week for Greece as it bids to persuade its European partners to release a further slice of aid to keep its economy on life support and enable it to stay in the 17-nation bloc.
Prime Minister Antonis Samaras holds talks with German Chancellor Angela Merkel in Berlin on Friday and with French President Francois Hollande the day after.
Greek Foreign Minister Dimitris Avramopoulos was in Berlin Monday for a meeting with his German counterpart Guido Westerwelle to prepare the talks.
Asian stocks markets edged lower in subdued holiday trade on Monday with Tokyo stocks buoyed by a weaker yen amid dimming chances of fresh stimulus measures by the US Federal Reserve, traders said.
Global stock markets rose last week, with Frankfurt's blue-chip DAX 30 index rising back above the psychological 7,000 points-level, on hopes of more economic stimulus measures by central banks and thanks to positive US data.
Spirits were also lifted by Merkel, who reasserted her pledge to get fully behind the euro.