BRUSSELS/BERLIN (Reuters) – European leaders promised yesterday to speed up plans to strengthen spending rules and get a permanent bailout fund up and running as soon as possible, a day after US agency S&P cut the ratings of several eurozone countries’ creditworthiness.

In a conference call with reporters and analysts after downgrading nine of the eurozone’s 17 countries, Standard & Poor’s said it saw continued risks from the debt crisis that has overshadowed Europe for the past two years and said the single currency area was heading towards recession.

It also warned that France, which suffered a downgrade to AA+ from the top-notch AAA, was at risk of further cuts if a recession further inflates its debt and budget deficit.

“The policy response at the European level has in our view not kept up with the rising challenges in the euro zone,” S&P credit analyst Moritz Kraemer said on the call, forecasting a 40 per cent chance of eurozone gross domestic product contracting by up to 1.5 per cent in 2012.

The downgrades were delivered hours after talks between private bond holders and the Greek government aimed at restructuring Greece’s vast debts broke down, pushing Athens closer to default, an event that would tarnish eurozone unity and pose a contagion threat which could engulf the bloc.