US President Barack Obama has warned that the debt crisis in Europe is "scaring the world" and eurozone leaders need to deal with the situation more quickly.

His comments came as sketchy details of an international plan to stabilise the zone and sort out its debt crisis began to emerge.

“They have not fully healed from the crisis back in 2007 and never fully dealt with all the challenges that their banking system faced. It is now being compounded with what is happening in Greece,” Mr Obama said at a public meeting in California.

“So they are going through a financial crisis that is scaring the world and they are trying to take responsible actions but those actions haven’t been quite as quick as they need to be.”

Despite the move to calm concerns yesterday, fear and nervousness look set to dominate financial markets up to a world leaders’ summit in November.

However, markets have responded positively to the details, with shares in French and German banks climbing by around 10%. Over recent months, these banks, which collectively hold more than £60 billion of Greek debt, have seen their shares halved in value.

The FTSE-100, after dropping nearly 100 points below the 5000 mark, closed up 23 points at 5089 while Germany’s Dax finished the day up almost 3% and France’s CAC 40 nearly 2%.

Louise Cooper, markets analyst at BGC Partners, predicted a rollercoaster ride for markets in the weeks ahead.

She said: “A sufficiently credible plan to solve the eurozone crisis will necessitate changes to treaties, laws and, not least, the German constitution. There will be wobbles and uncertainty at every vote and stage of political implementation. So what have we to look forward to? Continued financial uncertainty, high volatility and nervousness.”

Yusuf Heusen, a sales trader at IG Index, said markets were giving politicians the benefit of the doubt over resolving the Greek debt crisis but warned their patience was unlikely to last. He said if the full plans did not emerge in the next few days, shares could experience “another lurch back to the August lows”.

Although Evangelos Venizelos, the Greek Finance Minister, denied suggestions he had discussed a so-called “orderly default” with Christine Lagarde, the IMF chief, and Jean-Claude Trichet, head of the European Central Bank, the plan emerging out of America involves lenders writing off as much as 50% of what they are owed by Athens.

It also involves boosting the eurozone bailout fund from £380bn to £1.7 trillion and strengthening banks by ensuring they have more capital to protect them from the effects of any future default.

However, there are many hurdles before any orderly default is agreed. Angela Merkel, the German Chancellor, was adamant at the weekend a Greek default was not an option because it would destroy investors’ confidence in Europe.

Today, George Papandreou, the Greek Prime Minister, will discuss his austerity plans with her in Berlin, two days before the German parliament is due to vote on new powers for the eurozone’s financial rescue fund.

Last week, UK Chancellor George Osborne’s message was EU leaders had six weeks to stabilise the eurozone and even save the euro, a reference to the G20 meeting in Cannes in November.

Yesterday, Downing Street, when asked if six weeks was too long to wait, insisted there was a “greater sense of urgency”. A spokesman pointed to a series of finance ministers’ meetings ahead of the G20, as well as an EU summit, which would hammer out the detail of a new deal.

Meantime in Athens, Greek officials said the IMF was seeking written commitments on its latest austerity promises before sending inspectors back this week to conclude a review of compliance with a £95bn bailout programme. Greece has repeatedly missed its deficit reduction targets. IMF and EU approval is essential to release a £7bn emergency loan, without which, public salaries, pensions and other bills will go unpaid.