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BERLIN (Reuters) - German Chancellor Angela Merkel said on Tuesday that European Union leaders would make an important step at their upcoming summit toward solving the debt crisis, but more steps would be necessary.
"The EU summit is an important step but further steps will follow because this is about overcoming a sovereign debt crisis," Merkel told a news conference in Berlin.
"These sovereign debts have been built up over decades and therefore one cannot resolve them with one summit but it will take difficult, long-term work."
"Nonetheless, I do think we will also be able to take relevant, important decisions," Merkel said.
Earlier on Tuesday, sources from her party quoted Merkel as saying she expected European leaders to produce a "work plan" for Greece at a summit on Sunday.
Speaking with President Jose Mujica of Uruguay alongside, Merkel also said the EU would seek to further discussions over a trade deal with South America's Mercosur bloc at the upcoming G20 summit in Cannes in November.
The EU and Mercosur -- which groups Argentina, Brazil, Paraguay and Uruguay -- have been trying for years to draw up a free trade deal that would encompass 750 million people and commerce worth $125 billion a year.
Talks were relaunched in 2010, but unresolved issues dashed hopes of reaching a deal by the middle of this year.
"Uruguay is a country that has a big interest in deepening Mercosur's cooperation with Europe, and I said the EU also has a strategic interest, so we will do everything on the sidelines of G20 summit" to bring the negotiations forward, Merkel said.
Reporting By Sarah Marsh and Matthias Sobolewski; Editing by Mark Heinrich