Germany and France finally find common ground

Euro debt crisis sparks European leaders into action.

German Chancellor Angela Merkel and French President Nicolas Sarkozy have emerged from seven hours of talks confirming an agreement over how to proceed with the euro debt crisis.

Although details are yet to be announced, it is believed that a possible tax on European banks is off the cards. Prior to the most recent meeting, Germany had expressed a keen desire to see private lenders to Greece subject to losses resulting from future rescue agreements. However, both the European Central Bank and France have expressed concerns that this could spark a much wider banking crisis in the eurozone.

France and Germany are the two countries most significantly affected by Greek debt, followed by the UK in third place. The meeting between Germany and France comes hours before European policymakers meet to discuss how to tackle the eurozone debt crisis, including a further loan package to Greece.

On Tuesday, President Barack Obama called the German Chancellor to highlight how important it is to address the euro debt crisis as part of an overall global economic recovery. European Commission President Jose Manual Barroso likewise points out how fundamental it is to address the european problem head on in order to avert future negative consequences: "Nobody should be under any illusion; the situation is very serious".