Eyes were also on the United States as the Federal Reserve prepared to update on Wednesday its economic growth forecasts alongside announcing its latest interest rate decision.
Approaching midday trade in London, the benchmark FTSE 100 index was down 0.36 percent to 5,754.60 points, Paris the CAC 40 shed 0.43 percent to 3,860.30 points and Frankfurt's DAX 30 dipped 0.07 percent to 7,280.15.
Greece's crisis-hit government on Wednesday carried a confidence vote through parliament to pursue critical reforms needed to unlock vital new assistance from its international creditors.
The Socialist party of Prime Minister George Papandreou successfully mobilised its five-seat majority in the chamber to prevail by 155 votes to 143, according to a count released by the head of parliament.
In a closing speech after three days of debate, Papandreou called for support "to avoid bankruptcy and keep Greece in the euro core."
Athens now has two weeks to convince its European peers that it will carry out long-delayed structural reforms and privatisations to secure badly needed bailout money before its funds run out in July.
"With a relatively narrow majority sealing the result, another vote next week on the actual austerity measures and the fact that some just see this as delaying the inevitable fact that the eurozone is broken beyond repair, equities may well struggle to progress any further in the near term," said IG Markets analyst Cameron Peacock.
The euro dropped to $1.4365 from $1.4408 late on Tuesday in New York. The dollar eased to 80.20 yen from 80.22 yen on Tuesday.
The yield on 10-year Greek bonds slid to 16.595 percent by mid-day from 16.692 late on Tuesday.
However investors were demanding higher rates of return on bonds from Spain and Italy, which have been the centre of concerns of contagion from Greece.
The yield on 10-year Spanish bonds rose to 5.499 percent from 5.483 and for Italy the yield jumped to 4.868 percent from 4.810 percent.
"The (Greek) focus now passes to the budget passage and implementation, which is more contentious," said Lloyds Bank analyst Adrian Schmidt.
"But perhaps more of a concern for the euro is the lack of any real progress in designing a new debt solution for Greece, and the fear is increasing that this may drag out well beyond the new deadline of early July.
"This could be damaging for the euro, but for today it seems the focus will be more on the US."
Federal Reserve chairman Ben Bernanke is set to give his second-ever press conference Wednesday as signs of weakness in the world's biggest economy cloud prospects for a stimulus reduction.
The central bank's Federal Open Market Committee (FOMC) on Tuesday debated an eventual exit strategy from the more than $2.3 trillion of support the Fed has pumped into the economy since the 2008 financial meltdown.
Financial markets keenly awaited the conclusion of the two-day FOMC meeting, hoping to parse its policy statement, and Bernanke's second-ever post-meeting briefing, for clues on the direction of interest rates.
The Fed will also publish updated estimates on economic growth, unemployment and inflation.
Wall Street rallied on Tuesday, with the Dow Jones Industrial Average closing up 0.91 percent, the S&P 500 gaining 1.34 percent and the tech-heavy Nasdaq Composite surging 2.19 percent.
Japanese shares rose 1.79 percent to a three-week high Wednesday on relief that the Greek government survived its key confidence vote and as traders looked to events due in the United States.
"Developments regarding the US economy and Europe determine the global risk appetite and the short-term concerns in Europe for now have subsided," said Hisatsune Kobayashi, general manager at SMBC Nikko Securities.
Copyright AFP (Agence France-Presse), 2011