European leaders try to find way out of financial storm

PARIS, Satuday (AFP) -

European leaders were set to try to cobble together a response to the global financial crisis at a mini-summit on Saturday despite disagreements that killed off talk of a Europe-wide bailout package.

French President Nicolas Sarkozy spent Friday laying the groundwork for the Paris meeting with leaders of Britain, Italy and Germany.

European leaders are hoping to forge a common position on how to tackle the financial storm sparked by the US banking crisis ahead of the Group of Eight meeting of finance ministers in Washington next week.

But summit preparations exposed sharp divisions when Germany flatly rejected an idea floated by France for a 300-billion-euro ($416-billion) European fund to shore up troubled banks.

Both Germany and Britain have been reluctant to commit their taxpayers’ money to a Europe-managed fund and instead advocate a case-by-case approach to rescuing financial institutions.

German Chancellor Angela Merkel and British Prime Minister Gordon Brown only confirmed they would attend after France made clear it would not push for a fund mirroring the 700-billion-dollar US bailout plan.