Sarkozy, Merkel Want Balanced Budgets For Eurozone

European financial market-watchers are monitoring reaction to Tuesday's meeting between French President Nicolas Sarkozy and Germany Chancellor Angela Merkel. The two leaders are trying to stop the European debt crisis from expanding.

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DAVID GREENE, host:

A meeting in Paris between the leaders of France and Germany yesterday was intended to ease concerns about the European debt crisis.

German Chancellor Angela Merkel and French president Nicolas Sarkozy announced several plans, but that did not satisfy skittish markets. They were looking for a quicker fix.

NPR's Jackie Northam reports from Paris.

JACKIE NORTHAM: Analysts say the proposals laid out by Chancellor Merkel and President Sarkozy to harness the European debt crisis are sound enough, but they're long-term plans, while markets are looking for more immediate solutions.

The two leaders called for a tighter economic and political union among the 17 nations that make up the eurozone. And they want all member nations to adopt what they called a golden rule, to commit to balance their budgets and work on budget deficits, something lacking among troubled countries such as Greece. But the leaders chose not to commit to issuing euro bonds, which would distribute responsibility for the debt across the eurozone.

Merkel in particular is opposed to the collective bonds because it would place too much burden on Germany. But, like Sarkozy, she did not rule them out in the future. Her meeting with Sarkozy came shortly after news that Germany's economy had ground to a near standstill in the last quarter, far below predicted growth. Merkel said there was no magic wand that would resolve the debt crisis, that it will be a step-by-step process, one which she and Sarkozy signed off on, but which may not go far enough to calm the markets.

Jackie Northam, NPR News, Paris.

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