France and Italy are trying to bounce a reluctant Germany into swift action to prop up the euro as the deepening crisis sent unemployment to its highest level since the creation of the 17-nation single currency zone in 1999.

Mario Monti, the Italian prime minister, and François Hollande, the French president, made it clear after talks in Rome that they wanted measures to help euro members struggling with high borrowing costs.

The joint statement on Tuesday evening followed a day in which news of lengthening dole queues and a standoff between the Greek government and the troika group responsible for setting bailout conditions rattled financial markets.

Officials from the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Union refused to soften demands for a fresh €11.5bn (£9bn) package of cuts despite pleas from the coalition government in Athens. Greece has warned it will run out of money on 20 August but the troika said more austerity was the price for continued financial help.

Before a crucial meeting of the ECB on Wednesday, investors ditched Spanish and Italian bonds and sought out safe havens in Germany and the Netherlands as doubts continued to surface about the central bank's ability to make good on its promise to do whatever it takes to save the euro.

European financial markets have rallied strongly since Mario Draghi, the ECB's president, said last Thursday that he had the necessary firepower to prevent rocketing interest rates on the borrowing of weak eurozone countries leading to the disintegration of monetary union.

The rally has lost momentum in the past two days as markets have downgraded their expectations of the ECB meeting.

Louise Cooper, analyst at BGC Partners, said: "I am beginning to think that Mr Draghi's comments last week were made from a position of weakness rather than strength. Isn't it also better to 'shock and awe' the markets rather than promising them they will be shocked and awed at some stage of the future?

"It could be argued that Draghi had to say something quickly to halt the rapidly rising Spanish bond yields – prior to his comments, Spanish two-year yields went over 7% – and so he was forced by the markets to say something, which is never an ideal position.

"He may also have been acting pre-emptively to force recalcitrants both on the ECB and within Germany's Bundestag to back his more aggressive ECB stance."

Monti, who said on Tuesday that he could see "light at the end of the tunnel", will hold talks in Finland on Wednesday and in Spain on Thursday as he seeks to put pressure on Angela Merkel to agree to the use of radical measures by the ECB to bring down long-term interest rates.

The German government remains cautious about some of the ideas being floated, including pumping more cheap money into European banks, the purchase of bonds by the Frankfurt-based central bank and the granting of a banking licence to Europe's bailout fund, the European stability mechanism, to allow it to receive financial backing from the ECB.

Figures released by Eurostat in Brussels showed that the number of jobless people across the Eurozone rose by 123,000 in June, taking the total to 17.8m, the highest level since the eurozone was formed in January 1999. The 14th successive monthly rise in eurozone joblessness brought the cumulative rise to 2.25m since April 2011, and left the unemployment rate at 11.2%

Howard Archer, of IHS Global Insight, said: "With the Eurozone already looking odds on to suffer further GDP contraction in the third quarter after a likely appreciable drop in the second quarter, and with already weak eurozone business confidence softening further across all sectors in July, the likelihood is that the eurozone unemployment rate will move significantly higher over the coming months.

"Indeed, it now looks odds on that the eurozone unemployment rate will exceed 11.5% by the end of the year, although the situation will vary markedly between countries. Furthermore, there looks to be a very real danger that the eurozone unemployment rate could reach 12% in 2013."

In Greece the troika's hardline stance is putting strains on the fragile "pro-austerity" coalition formed after the country's elections in June. Talks between the coalition partners will take place on Wednesday after the socialist leader, Evangelos Venizelos, said the bailout conditions were not working and would have to change.