French and German officials were scrambling to put together a compromise agreement on recapitalising major European banks ahead of tomorrow's meeting between the two countries' leaders.
French President Nicolas Sarkozy meets German Chancellor Angela Merkel in Berlin tomorrow to discuss how best to recapitalise banks overexposed to risky sovereign debt.
However, before the meeting even began one senior German minister was suggesting that Greece might have to be given more breathing space to beat its debt crisis.
"We have to manage things so that the banks have enough capital" to deal with any further negotiated reduction of the Greek debt, Finance Minister Wolfgang Schaeuble told Germany's Frankfurter Allgemeine Sonntagzeitung.
Already in July, eurozone leaders agreed a 21% debt "haircut" for Greece, however Mr Schaeuble suggested that this might not be sufficient.
Germany's Welt Am Sonntag will tomorrow report that France and Germany are close to a compromise on how to approach the crisis.
Ms Merkel, whose country is Europe's strongest economy and effectively the eurozone's paymaster, has argued that under-pressure banks should turn to investors for funds before appealing for national or European cash.
France, the eurozone's next biggest player, is reportedly more ready to turn to public funds to shore up its at-risk lenders.
A state investment fund has already drawn up plans to rescue Franco-Belgian bank Dexia and a source close to the dossier in Belgium said the French and Belgian prime ministers would meet to discuss it tomorrow too.
According to Welt Am Sonntag, the compromise deal will involve France getting the public refinancing for the European rescue fund it has been seeking.
In return, Germany will get the second "haircut" on the Greek debt it has been seeking - and which Mr Schaeuble's press comments hinted at.
There is a growing sense of urgency to resolve the crisis.
Yesterday the European Commission gave member states ten days to agree a plan to shore up their lenders to cover potential losses.
The International Monetary Fund thinks that will take between €100-200bn.
The same day, ratings agency Moody's downgraded a dozen British banks over concerns that government support for lenders could be withdrawn. Also yesterday the Fitch agency downgraded Italy's and Spain's credit ratings.
Today IMF managing director Christine Lagarde had talks in Paris with Mr Sarkozy. She made no comment to press either before or after their meeting.
However French banks in particular are seen as overexposed to Greek, Italian and Spanish debts.
European leaders fear that a default in a weaker Mediterranean economy could trigger a financial crisis across the continent.
The recent moves by the ratings agency have concentrated minds in France, where top officials fear the country could lose its top notch AAA credit rating.
The debt crisis, which began in Greece, last year forced Ireland and Portugal to seek international bail-outs.
Now Italy and Spain are in the firing line, threatening to sink the entire euro project as banks scramble to raise funding.
