Sarkozy, Merkel in phone talks on debt crisis: Paris

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French President Nicolas Sarkozy and Germany's Chancellor Angela Merkel were to hold telephone talks on the eurozone debt crisis Wednesday, just days before a crunch EU summit.

France's Budget Minister Valerie Pecresse, the spokeswoman for Sarkozy's cabinet, said Paris would be in constant touch with Berlin until October 23 when Europe hopes to announce a definitive solution to the crisis.

"The president did not go into detail on the deal that must be struck on the 23rd. He simply recalled all that is at stake in this agreement, which is historic for Europe, and historic for France as well," she said.

"Today, the president will hold phone talks with the German chancellor. It is obvious that contacts between France and Germany will be constant until the 23rd," she added, in remarks to reporters after a weekly cabinet meeting.

European leaders are to gather in Brussels at the weekend for crisis talks, as world financial markets continue to watch the sovereign debt crisis sinking Greece and threatening its Mediterranean neighbours.

The 17-nation eurozone's two biggest economies are France and Germany and, while their own economies are stronger than those of the southern neighbours, their banks are exposed to risky sovereign debt.

Sarkozy and Merkel have differed over how to manage the crisis, with France urging the eurozone bail-out fund to underwrite lenders and Berlin pushing for the private sector to take a bigger hit.

But Paris has said it is vital that they come to an agreement quickly.

"Allowing the destruction of the euro would be to take a risk of destroying Europe," Sarkozy said on Tuesday.

"This crisis is going to lead us in the days ahead to take important, very important decisions," he said.

© 2011 AFP

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