BRUSSELS (AP) — The chairman of the eurogroup of finance ministers says the delay to a debt crisis creates a "disastrous" image of the eurozone to the outside world.
Jean-Claude Juncker, who is also the prime minister of Luxembourg, added that it's not necessarily just France and Germany that have differences of opinion on how to tackle the crisis.
He said decisions had to be taken by all 17 eurozone countries.
Juncker made the comments as he arrived for a meeting of eurozone finance ministers in Brussels Friday.
The meeting will be followed by talks between EU finance ministers Saturday, a summit of EU leaders on Sunday, and another crisis summit early next week.
The second summit was made necessary when France and Germany realized that a deal would not be reached in time for Sunday.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
BERLIN (AP) — Germany and France agree over the main points of a plan to deal with Europe's crippling debt crisis, Chancellor Angela Merkel insisted Friday, a day after the two countries conceded that a new strategy won't emerge this weekend.
Markets appear to be giving Europe the benefit of the doubt that they will eventually be able to agree to a comprehensive package of measures in time for a second summit, which France and Germany say will be held by Wednesday at the latest. Europe's main stock markets all opened higher Friday, with the Stoxx 50 of top European shares up 0.7 percent.
Finance ministers from the 17 countries that use the euro will be looking to thrash out differences of opinion later Friday as they gather in Brussels, ahead of the arrival of the leaders on Saturday.
Sunday's leaders' summit had been earmarked as the time Europe would finally deliver a comprehensive plan to get a grip on the currency union's debt troubles, which has seen three countries bailed out and threatened the future of the euro currency itself.
Leaders had been expected to detail new financing for debt-ridden Greece, produce plans to make Europe's banks fit to sustain worsening market turbulence and further empower the eurozone bailout fund.
Though Merkel insisted in discussions with lawmakers Friday that there are no major differences of opinion between herself and French President Nicolas Sarkozy, Europe's two biggest economies appeared to be at loggerheads over how to make best use of the bailout fund, the so-called European Financial Stability Facility, or EFSF.
A spokesman for Merkel's conservative Christian Democrats said the chancellor refused to be drawn on reports of the split between her and Sarkozy in talks with lawmakers from her party.
"She would not say anything other than that they were in agreement," Dominik Geissler told reporters in Berlin.
Yet, while France proposes turning the EFSF into a bank that would have access to unlimited credit from the European Central Bank, Germany has refused to sanction such a move, arguing it would compromise the ECB's impartiality.
"Considering the importance of the discussions and there potential impact upon the European economy, global capital markets and the future of the EU itself a delay of a few days is neither here nor there in the overall scheme of things," said Gary Jenkins, an analyst at Evolution Securities. "However the suggestions that they are still far apart on how to make best use of the EFSF is of some concern."
What to do about the euro440 billion ($607 billion) EFSF doesn't seem to be the only point of contention.
Germany and several other rich countries have been pushing for banks and other private investors to take steeper losses on their Greek bondholdings, before the eurozone can sign off on a second multibillion euro rescue package for the struggling country.
France and the European Central Bank had so far opposed forcing banks to write off more Greek debt, fearing that would destabilize the banking sector and worsen market turmoil.
France is thought to be particularly worried about losing its cherished triple A credit rating, a scenario which Standard & Poor's said was possible if Europe slides back into recession or its borrowing rises even further. In a stress test report, S&P warned that France Spain, Italy, Ireland and Portugal could have their ratings reduced by one or two notches.
On the future of Greece, the French and German statements Thursday indicated that the two countries may be edging toward a solution. They have asked Greece to immediately start negotiations with the private sector to reach a deal "that would improve (Greece's) debt sustainability."
A leading German banker, Commerzbank chief Martin Blessing, said in comments published Friday that Athens should declare bankruptcy, saying it is the only way out of the debt crisis.
"States have only two options," Blessing told Germany's top-selling Bild newspaper. "Either they pay back their debts as agreed, or they declare themselves insolvent and accept the consequences that brings."
Lawmakers from Merkel's junior coalition partner, the Free Democrats, said the chancellor had indicated that Spain and Italy in particular were concerned about such a move, which could further undermine confidence in their own ability and willingness to repay their debts if markets start to think that Greece is not a one-off case.
The main worry in the markets is that the debt crisis, which has already seen Greece, Ireland and Portugal bailed out, could envelop the much bigger economies of Spain and Italy.
The eurozone's third and fourth largest economies are currently being supported by the European Central Bank's bond-buying program, which has helped prevent their borrowing costs in the markets from rising up to unsustainable levels.
The ECB has been a reluctant buyer of their bonds in the markets; the EFSF is soon set to take on that role.
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