The evidence has been trickling out in comments by French president Nicholas Sarkozy and German Chancellor Angela Merkel, but now talks are really happening: the two leading European nations are discussing creating a new euro for “core” nations like themselves. “You'll still call it the euro, but it will be fewer countries," a German official said. The countries involved would pursue greater economic and political integration to prevent the kind of deadlock that led to the current crisis. Other officials steadfastly denied rumors of the talks, saying Europe already has a two-tiered union and that forcing countries to drop out would destroy the system. Meanwhile, U.S. markets plummeted on fears that Italy is sinking.