Merkel, Sarko Reach Bank Deal

The leaders of Germany and France, the eurozone's two biggest economies, say they have reached agreement on strengthening Europe's shaky banking sector. German Chancellor Angela Merkel says she and French President Nicolas Sarkozy "are determined to do the necessary to ensure the recapitalization of Europe's banks." Merkel spoke after talks with Sarkozy at Berlin's chancellery today aimed at forging an agreement ahead of a summit of the European Union's 27 leaders later this month.

Sarkozy said it was "not the moment" to go into the agreement's details, but said that the French-German accord "is total." When asked whether all European banks would be recapitalized, Merkel did not directly answer the question, saying only that all banks across the eurozone would be measured by the same criteria that would be established in coordination with, among others, the European Banking Authority and the International Monetary Fund. Both leaders declined to elaborate on their proposal, saying it must first be discussed with other European leaders. (More financial crisis stories.)