German Chancellor Angela Merkel will meet French president Nicholas Sarkozy on Tuesday afternoon in Paris to talk about the debt situation in Europe. The meeting has been met with high expectations and stock markets slightly rebounded last week, when the first news about the high-level meeting broke.

Markets expect the two leaders to talk about joint borrowing and mutual guarantees, ideas that have been rejected so far. A press briefing is scheduled after the 16,00 meeting on Tuesday. France is the second largest economy in the EU, after Germany.

The German economy almost stalled in the second quarter this year, as the region’s sovereign-debt crisis weighed on confidence, according to Bloomberg.  Gross domestic product, adjusted for seasonal effects, rose 0.1 percent from the first quarter, when it jumped a revised 1.3 percent, according to the Federal Statistics Office in Wiesbaden. Economists had forcast a 0.5 percent quarter-on-quarter growth.

The French economy also stagnated in the last three months through June, while Italy and Spain's GDP grew by 0.3 and 0.2 percent, respectively.

editor@romania-insider.com

(photo source: German Chancellor Office)