Sarkozy says euro zone talks stuck, flies to Germany

Wed Oct 19, 2011 4:09pm EDT
 
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By Yann Le Guernigou and Paul Carrel

PARIS/FRANKFURT (Reuters) - Plans to tackle the euro zone debt crisis have stalled with Paris and Berlin at odds over how to increase the firepower of the region's bailout fund, French President Nicolas Sarkozy said on Wednesday.

Sarkozy told French lawmakers the dispute was holding up negotiations and flew to Frankfurt to talk with German Chancellor Angela Merkel in an attempt to break the deadlock ahead of a make-or-break European leaders' summit on Sunday.

The two leaders left that meeting without speaking to waiting reporters.

Asked if a deal had been reached, Jean-Claude Juncker, chairman of the Eurogroup of euro zone finance ministers who attended the evening meeting, replied: "We're still in meetings Saturday, Sunday."

Sarkozy was expected to return to Paris where his wife, the singer and former supermodel Carla Bruni, was at a maternity clinic and believed to be close to giving birth to their first child together.

A French presidency source earlier said the French and German leaders were meeting other euro zone policy chiefs and International Monetary Fund head Christine Lagarde on the sidelines of an event mark the end of Jean-Claude Trichet's presidency of the European Central Bank.

France has argued the most effective way of leveraging the European Financial Stability Facility (EFSF) is to turn it into a bank which could then access funding from the ECB, but both the central bank and the German government have opposed this.

"In Germany, the coalition is divided on this issue. It is not just Angela Merkel whom we need to convince," Sarkozy told the parliamentarians at a lunch meeting, according to Charles de Courson, one of the legislators present.   Continued...

 
<p>France's President Nicolas Sarkozy enters his car as he leaves the maternity clinic, Clinique de la Muette, in Paris, October 19, 2011. French media reports that his wife Carla Bruni-Sarkozy is at the clinic. REUTERS/Gonzalo Fuentes</p>