Merkel, Sarkozy Meet as Debt Crisis Threatens to Engulf Banks

German Chancellor Angela Merkel and French President Nicolas Sarkozy met in Berlin to discuss ways to staunch the European debt crisis threatening to engulf the region’s banks.

Merkel and Sarkozy may be nearing a compromise on a possible Greek debt restructuring, greater flexibility for the European bailout fund and recapitalizing European banks, Welt am Sonntag newspaper reported, citing unidentified negotiators involved in the talks. The two leaders are scheduled to give a press conference at the Federal Chancellery at 5:30 p.m.