* FTSEurofirst 300 bounces back, up 0.2 percent
* Barroso's comments on euro bonds help equities
* Banking shares recover after hefty falls
By Atul Prakash
LONDON, Sept 14 (Reuters) - European shares turned positive on Wednesday after European Commission President Jose Manuel Barroso said the commission will soon present options for the introduction of common euro bonds, which some believe can help resolve the debt crisis.
Barroso told the European Parliament that some of these could be implemented within the terms of the current European treaty, whereas others would require treaty changes.
"It could be a turning point and a major step forward as countries with higher debt levels will have the ability again to finance themselves," said Klaus Wiener, chief economist at Generali Investments, which manages 330 billion euros ($451 billion).
"But if we get euro bonds, there will be some strings attached. There will be strong governance in terms of fiscal prudence otherwise it can not work."
At 0828 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 902.19 points after falling to a low of 892.01 earlier in the session. The index, which hit a two-year low on Tuesday before closing 1.1 percent higher, is still down xx percent so far this year.
Banks , which fell sharply in early trade following Moody's downgrade of two French banks, gained ground on hopes that the introduction of euro bonds could help the euro zone in coming out of the debt crisis and improve conditions for banks.
French bank Societe Generale cut losses to trade 0.5 percent lower, while BNP Paribas gained 0.2 percent after early losses.
But concerns remained and analyst said investors should stay cautious.
The region's debt crisis, which has potential to derail global economic recovery, prompted the United States to urge European leaders to take more effective coordinated fiscal policy measures, while China said rich economies should show they are serious about tackling the euro zone debt problem.
"A lack of leadership is really a matter of concern for the market. A lot of worries are now focussed on Germany in terms of splits there on how to deal with the region's debt crisis," said Keith Bowman, equity analyst at Hargreaves Lansdown.
"Valuations are low, but the problem is that they are dependent on future earnings . The concern is that if we have a deteriorating economic backdrop, the earnings outlook could also deteriorate. Stocks could be cheaper tomorrow."
According to Thomson Reuters Datastream, the STOXX Europe 600 index carried a 12-month forward price-to-earnings ratio of 8.3, against a 10-year average of 13.2.
Focus was also on a conference call by Greek Prime Minister George Papandreou on Wednesday with French President Nicolas Sarkozy and German Chancellor Angela Merkel, but analysts said they did not expect much from the call. (Editing by Hans-Juergen Peters) ============================================================ For rolling updates on what is moving European shares please click on ============================================================ For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. STOXX Europe index.................................. Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................
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