The leaders of France and Germany will make a statement on Greece later on Tuesday, according to reports.
President Sarkozy and Chancellor Merkel spoke on the telephone on Monday and were determined, said one source, “to do what is necessary” to calm the crisis on confidence over Greece and in the euro zone.
Shares in France’s largest bank, BNP lost almost eight per cent due to the unease over the Greek scenario, with analysts saying questions continue on how to address the problem.
“As of last Monday, the question of abandoning Greece is no longer a taboo. But there are very many scenarios about moratorium on debt, the idea of making a two-speed euro with the good and the bad students, all the scenarios are in the market and it’s that instability and uncertainty that’s weighing enormously on the euro,” said Lionel Jardin of Global Equities.
The euro did rally after the news of the meeting, gaining slightly against the dollar. The pan European share index fell over one per cent.
The growing risks to the European banks led to claims that France will have to provide capital to its banks.