Central Idea: American officials exhorted their European counterparts to use Europe’s own resources to try to solve the crisis.
Preview: Echoing past statements, Sarkozy and Merkel said banks should first raise money from the private sector before seeking state aid or money from the EU bailout fund. "These issues must all be resolved," Merkel said. "It's a painful process." Sarkozy stressed that the leaders are fully aware of their responsibilities, saying they have a "moral, political and economical obligation" to act decisively. The leaders are also working on how best to leverage the European Financial Stability Facility. The €440 billion fund, which was recently granted the power to intervene in sovereign debt markets and provide loans for governments that need to recapitalize banks, is widely seen as needing additional firepower. "It's important to boost the emergency fund to protect the euro," said Merkel. But many EU governments have ruled out backing the fund up with additional loan guarantees.
CANNES, France — President Obama plunged Thursday into the fast-moving European debt crisis, arriving here to exhort European leaders to get their financial house in order.
But while the president hustled from meeting to meeting with world leaders, he was in many ways thrust into the rare position of bystander, as the unfolding drama over whether the Greek government would fall (it did not) and whether Greece would back the comprehensive accord to protect the euro reached last week (it will, at least for now) dominated conversations in the hallways and conference rooms here in this iconic seaside town. The grand Espace Riviera is more accustomed to red-carpet arrivals by movie stars and hangers-on for the Cannes Film Festival; on Thursday it was transformed instead into ground zero for blue-suited bureaucrats grappling with a financial crisis and the global contagion that it threatened....