* European shares rebound from lows in cautious trade * Euro steadies near 22-month low * Euro zone PMI data seen confirming economic slowdown LONDON, May 24 (Reuters) - The euro hovered above a 22-month low and European shares saw a fragile recovery, as investors braced for data that could reveal the damage wrought on the region's economy by prospects of a Greek exit and a lack of progress in tackling the debt crisis. A meeting of European Union leaders, who have been advised by senior officials to prepare contingency plans in case Greece decides to quit the single currency, shed no new light on what euro zone nations plan to do, leaving the threat of a Greek exit hanging over the markets. "Rising economic uncertainty in Europe and the lack of a policy response are proving too much for the market to handle," analysts at Barclays Capital said in a note. The FTSE Eurofirst index of top European shares opened up 0.5 percent at 976.86 points on Thursday, but only after key European share markets two days previously recorded their biggest daily loss in a month. The euro was steady near its lowest level since July at $1.2580, while German Bund futures which have reflected a flight to safety by investors, stood little changed at 144.08, having reached a record high of 144.28 on Wednesday. The euro area's private sector slump was expected to have deepened slightly in May, with the flash reading of the Markit Composite Purchasing Managing Index (PMI), due at 0758 GMT, seen at 46.5 against 46.7 the previous month.

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