* FTSEurofirst 300 index rises 0.2 pct
* French banks gain after sell-off
* German vote a focus
By Joanne Frearson
LONDON, Sept 29 (Reuters) - European shares moved higher in volatile trade on Thursday, with banking stocks featuring among the top performers having recently being sold off.
French banks BNP Paribas and Societe Generale were among the biggest gainers, up 4.5 percent and 2.9 percent respectively, in a recovery after a recent decline sparked by concerns over their exposure to Greece and Italy.
BNP Paribas has fallen 36.1 percent and Societe Generale 46.4 since late July due to concerns about slowing growth and worries they could be hit by a funding squeeze if the debt crisis worsens.
The moves in Europe were volatile, however, as investors fretted about whether German Chancellor Angela Merkel would face dissent in her own party in a vote on new powers for the rescue fund, potentially making a further decision to resolve the euro zone debt crisis difficult.
There has been worries in Merkel's coalition about the costs of a Greek bailout and any dissent could dampen hopes that further votes like the second Greek rescue package will go through lawmaking process smoothly.
The vote is at 0900 GMT.
"There is going to be a lot of volatility until the German vote," Joe Rundle, head of trading at ETX Capital, said. "It is widely expected to go through, the key is how much support Merkel gets in her own party."
"A weak German leader makes decision-making very difficult, we need a unified front for the euro zone and any sign of weakness is going to jeopardize that."
RISK APPETITE
By 0835 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.2 percent at 928.73 points after falling 1.2 percent in the previous session on concerns about the obstacles faced by any plan to ease the euro zone debt crisis.
The Euro STOXX 50 volatility index , Europe's main fear gauge, was down 1.3 percent, but is still up 28.4 percent for month.
The higher the volatility index, the lower investor appetite for risk.
Hennes & Mauritz
But the overall market's move up could be no more than a relief rally as there were still many hurdles to overcome in the euro zone debt crisis.
Talks between the European Union and IMF on the aid tranche in Athens on Thursday will see if Greece has done enough to avoid running out of cash and being forced into a near-term default.
Analysts said Italian borrowing costs were set to increase at an auction on Thursday as worries grow about the debt level in Italy.
The FTSEurofirst 300 index is on track for its biggest quarterly decline in three years on concerns about the handling of the euro zone debt crisis and worries about a slowdown in growth. (Editing by David Holmes)
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