Merkel, Sarkozy to discuss eurozone debt crisis

By the Associated Press | October 9, 2011 | 8:20 AM EDT

BERLIN (AP) — The leaders of Germany and France, the eurozone's two biggest economies, are meeting to discuss new measures to counter the bloc's debt crisis.

German Chancellor Angela Merkel and French President Nicolas Sarkozy are holding the talks at Berlin's chancellery to forge an agreement on the next steps in tackling the debt crisis ahead of a summit of the European Union's 27 leaders later this month.

A key issue in the talks is likely to be the need for a coordinated plan to bolster Europe's shaky banking sector to withstand a possible government bond default by Greece.

Merkel spoke out in favor of a coordinated bank recapitalization earlier this week following talks with the International Monetary Fund and other European leaders, adding the issue must be discussed at their Oct. 17-18 summit in Brussels.