By Julien Toyer and John O'Donnell
The ministers also face pressure to paper over cracks in a plan signed off by EU leaders to inject around 100 billion euros of extra capital into banks to protect them against the impact of a Greek sovereign default.
Against the worsening economic backdrop, European banks are finding it hard to borrow and are increasingly reluctant to lend to one another.
In an attempt to arrest this creeping credit freeze, ministers examined offering state guarantees to borrower banks or injecting cash into the European Investment Bank (EIB) so that it can lend them more.
They also attempted on Tuesday to settle growing discord over a bank recapitalization framework agreed at last month's EU summit.
That was set to cost more than 100 billion euros, the European Banking Authority (EBA) watchdog predicted, but some countries including Italy now want a more flexible approach to cut this bill.
"We should not change the criteria and we should stick to the accounting rules set out by the EBA."
French Finance Minister Francois Baroin played down any talk of changing the plan.
"There is a deal. We have to implement it in its modalities," said Baroin, leaving the meeting. "There is no change on this from our point of view."
Few decisions were expected from the meeting and many ministers left the gathering with little to report.
"People were kind of hesitant and waiting developments in Greece and in Italy," said Irish Finance Minister Michael Noonan, commenting on the mood in the meetings of euro zone ministers on Monday and EU ministers on Tuesday.
"There is a feeling, whatever economic and financial decisions need to be made can't be really made until the political logjam is released. People were kind of watching and waiting."
TOO LITTLE, TOO LATE?
Regardless of the outcome, the EU's attempts to support its lenders, which give banks until the middle of next year to strengthen their capital base, may be overtaken by events.
Recapitalizing banks was in part intended to cope with a default by Greece. But if debt-ridden Italy -- the euro zone's third biggest economy -- were also to need financial assistance, the scale of the problem would change entirely.
Yields on Italy's 10-year bonds touched a record high on Tuesday morning at 6.71 percent, close to levels widely seen as unsustainable.
European countries also disagree over whether states should back up banks with a guarantee when they borrow, with one proposal under consideration being a pan-European single guarantee scheme.
"There is a tough discussion on whether we should provide common guarantees to European banks so that they can get funding on the interbank market," said one official. "France and others are against."
Ministers also considered a request to inject fresh capital into the European Investment Bank (EIB) so it can lend more.
In that proposal, the EIB said it could lend up to 74 billion euros ($101 billion) to banks over two years if its shareholders, which include Germany and Britain, were to inject new capital. That compares to about 40 billion euros projected otherwise.
Allowing European banks to seek more funding from the EIB could alleviate pressure on those struggling to borrow, although the assistance is modest compared to the more than 460 billion euros now lent by the European Central Bank to banks.
But boosting the EIB's clout in this way could raise objections from countries like Britain which are reluctant to provide money for the benefit of others at a time of domestic cutbacks.
Any call by the EIB for extra cash from the 27 EU states that control it would fall hardest on its top shareholders. France, Italy, Britain and Germany have paid in or pledged about two-thirds of its capital.
Ministers also discussed the idea of a financial transaction tax, strongly backed by Germany but opposed in equally strong measure by Britain.
"I would suggest that we put to rest the idea that there is going to be some European financial transaction tax," Britain's George Osborne told the gathering.
(Reporting by Jan Strupczewski, Robin Emmott, Annika Breidthardt, Julien Toyer, Francesca Landini, Ilona Wissenbach and John O'Donnell; Editing by Rex Merrifield, John Stonestreet, Catherine Evans)