Merkel Rescinds Pressure on Banks

After a two-hour meeting with France's President Nicolas Sarkozy, German Chancellor Angela Merkel took back earlier demands that private banks participate in Europe's efforts to help bolster debt-ridden Greece. "We would like to have a participation of private creditors on a voluntary basis," Merkel said, adding that there was no way to legally force banks to participate in the effort, and that the issue should be "worked out jointly with the ECB." Critics in the European Central Bank and many European capitals had expressed concern that forcing private institutions to help stimulate the Greek economy could result in a default on the country's debt, and end up drawing other indebted European countries into the mess. Meanwhile, Greece reshuffled its cabinet, and the deal between France and Germany sent the euro and EU stocks soaring.