French President Nicolas Sarkozy on Wednesday ordered his finance and budget ministers to find new ways to prune the public deficit as markets fretted over the country's strained finances and banks in the wake of a U. S. debt downgrade.

Shares in French banks -- among the most exposed to Italian and other peripheral euro zone government debt -- tumbled in afternoon trade as fears about the currency bloc's debt crisis moved back to the forefront of investor concerns.

Sarkozy, who played a leading role in frantic diplomacy over the weekend aimed at halting two weeks of market turmoil, had earlier summoned his top ministers and central bank chief to emergency talks, interrupting the summer recess.

He urged French political parties to support his proposal for a constitutional rule to limit future deficits which is set to be defeated if put to a special two-chamber parliamentary vote. Budget Minister Valerie Pecresse said after the talks she would target tax loopholes in the 2012 budget.