Top world finance ministers began meeting here Friday amid fresh reminders of the instability gripping Europe’s economy — another credit downgrade for Spain, fear over the strength of European banks and a political battle over austerity measures in Italy.

French Finance Minister Francois Baroin said private investors will probably face greater-than-expected losses on their holdings of Greek bonds, beyond the roughly 21 percent included in the July rescue plan for Greece. That program has collapsed amid a deepening recession in that country, and Baroin said on French radio that it is “more or less certain” that banks, pension funds and others will have to shoulder larger losses.

Baroin said the Greek plan and other details should be finished by the time European leaders meet next weekend in Brussels.

“We are on track for a Franco-German agreement, which will be disclosed in about 10 days, on ways to cut the [Greek] debt,” Baroin said. “We started at 21 percent on July 21. It will be higher than that — that is almost certain. How much? We are discussing it.”

Officials including U.S. Treasury Secretary Timothy F. Geithner said European leaders were moving forward on Greece and other core issues. That progress includes an effort to raise new capital for banks and a strategy for increasing the financial power of a $600 billion European rescue fund.

But in an interview with CNBC, Geithner said the “hard part is still ahead” as officials try to nail down the details. For example, disagreement between political leaders and the European Central Bank has stymied an idea urged by U.S. officials that would effectively make the bank the ultimate guarantor of debts issued by euro-area governments. Instead they are examining others ways to maximize the effect that funds in the European Financial Stability Facility have on government bond markets, perhaps by using them as an insurance pool for government debt.

Baroin’s comments were among the most candid acknowledgments yet that European officials are negotiating a direct write-down in the value of Greek bonds. Private analysts have long said that such action was necessary but that European politicians have tried to avoid it for fear it would stigmatize the 17-nation euro currency region.

Baroin’s remarks also emphasized how the stakes have changed for the Group of 20 finance ministers. The meeting was originally envisioned by host nation France as a lofty discussion of issues, such as how to control world food prices or reform the international monetary system.

Instead, they will be working to keep a global slowdown from slipping into a new recession, trying to calm new tensions between the United States and China and pressuring Europe over its response to government debt and banking problems.

The meeting takes place just days after the U.S. Senate approved a bill imposing tariffs on countries judged to be manipulating their currency for economic gain — a key allegation against China, especially by the United States. China responded by lowering the trading range for its currency, the yuan.

Europe, however, will be the central point of discussion. The United States, Japanese and Canadian delegations arrived here with stern words for top European officials, urging them to more forcefully address government debt and banking problems that have kept world markets on edge for a year and a half.

According to wire service reports, Japanese Finance Minister Jun Azumi said he would emphasize Japan’s “bitter experience” in not pumping more capital into its banking system during a crisis in the early 1990s. The slow response was blamed for contributing to Japan’s years of ensuing slow growth.

Analysts at the International Monetary Fund and elsewhere fear Europe may be confronting lost decades of its own and have urged action on a number of fronts. IMF Managing Director Christine Lagarde has called for an “urgent recapitalization” of European banks.

European officials are moving in that direction. They expect to approve a plan at a summit next week and present it to the G-20 heads of state when they gather in Cannes, France, in early November.

However, the speed and extent of the European effort remains unclear. In downgrading Spain’s credit rating on Thursday, Standard & Poor’s said that, with Europe’s dimming growth prospects, the country may not be able to pay its bills. That analysis has been steadily repeated by top credit agencies across Europe over the past year. The Fitch ratings agency separately cut its ratings of several European banks.

In Italy, Prime Minister Silvio Berlusconi survived an afternoon confidence vote, 316 to 301, in the lower house of Parliament. But the country remained under increasing pressure to meet short-term budget targets and make longer-term reforms to boost economic growth — changes many outside analysts doubt Berlusconi has the will to make.

Much of Europe’s crisis response is centered on keeping Spain and Italy from needing a bailout. Their size and levels of outstanding debt would challenge the financial ability of countries such as France and Germany to support them.