European stocks were indicated to open lower Wednesday, after Moody's put Spain's credit rating on review for a possible downgrade, on worries over the country's debt and funding needs for next year.
European shares rose in thin volume to gain for the seventh straight session on Tuesday, as upbeat US retail sales figures reinforced confidence in the pace of economic recovery.
Unions have called for a Europe-wide day of action against austerity plans on Wednesday as the debt crisis in Europe continues to cause unrest.
Economist Nouriel Roubini argued in a commentary piece for Project Syndicate that the decision to press ahead with spending cuts before seeing strong signs of an economic recovery could be detrimental to Europe's recovery.
Italian Prime Minister Silvio Berlusconi survived a no-confidence vote in parliament Tuesday, preventing new elections in the country and a possible attack by bond vigilantes.
Karen Olney, head of European thematic strategy at UBS, recommended buying Italian bonds with the vote out of the way. "It looks a very good yield. I'd start to pick some up," she told CNBC.
Belgium also came under fire on Tuesday after rating agency Standard & Poor's warned it could cut the country's credit rating within six months if it did not form a government soon.
In Ireland, proposals to merge stricken Irish lenders Anglo Irish Bank and Irish Nationwide Building Society will be presented to parliament Wednesday, the Irish Times newspaper reported Tuesday.
The bill is due to be brought before Ireland's lower house of parliament after a vote on Ireland's bailout package from the European Union and International Monetary Fund, scheduled for around 1400 GMT Wednesday.
Economic data on tap on Wednesday includes Spanish inflation numbers for November and UK unemployment and consumer confidence figures, also for November.
Also on the agenda is the euro zone flash services PMI index, compiled from surveys of around 2,000 businesses ranging from banks to restaurants. The index will provide an indication of the growth rates in the euro zone's services and manufacturing sectors.