Berlin (CNN) -- French President Nicolas Sarkozy and German Chancellor Angela Merkel presented a united front Sunday in the face of regional economic woes, but offered few details about how they would solve financial problems.
"We are on the same wavelength in making decisions," Sarkozy said, pledging along with his German counterpart to pursue a "recapitalization" of European banks.
"We will do this together with...
our German friends in full agreement. There is no prosperous economy if there are no stable, reliable banks," he said.
Sarkozy said detailed proposals were still in the works, but he stressed the importance of acting quickly.
"We need to contribute with a lasting and global solution. And this response is one that we (have) decided to respond to before the end of this month," Sarkozy said.
Sarkozy and Merkel met in Berlin amid fears that Greece will default on at least some of it debts, having warned it will run out of money this month.That will put pressure on the euro, the common currency used by Greece and 16 other European Union countries.
"We would like to reiterate the importance of the euro and the necessity to find the necessary answer for the involved countries," Merkel said Sunday.
"The decision of a joint government has been a very difficult one. It's visionary. But the decision of a joint currency is at the very foundation of that," she added.
Merkel cheered European stock markets on Thursday, hinting that governments could inject cash into troubled banks.
Merkel said providing government money for European banks that are struggling with liquidity issues "is sensibly invested" if it's clear that such action is needed to prevent a broader financial crisis.
"We should not hesitate," she said, "because otherwise there will be far greater damage to our systems."
European banks have been struggling with fears about potential losses on government bonds issued by troubled European governments such as Greece. The threat of a so-called sovereign debt contagion has also led to a pullback in lending between banks.
The IMF recently estimated that European banks face an overall credit risk of up to 300 billion euros ($401 billion) stemming from bonds issued by Greece, Portugal, Ireland, Italy, Spain and Belgium.
Analysts suggest the euro will survive, but that tense times lie ahead.
"The system will hold together but it will not be a stress-free exercise. The benefits of keeping Europe and the euro together outweigh the risks over the long-term," said James Rickards, senior managing director at Tangent Capital Partners. "What's going on in Europe is classic brinksmanship."
Dan Dorrow, senior vice president of research at Faros Trading, an independent currency broker-dealer, agreed.
"The risk of someone leaving the euro is a small tail risk probability," said Dorrow.
Merkel and Sarkozy's meeting Sunday comes ahead of a meeting of finance ministers of the Group of 20 nations in France October 14-15.
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