Francois Hollande and Angela Merkel
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Merkel: Germany will not guarantee eurozone debts

27 June 2012 Last updated at 22:15 BST

Francois Hollande and Angela Merkel have held talks in Paris ahead of a crucial European Union summit on Thursday.

Spain and Italy are expected to make desperate pleas for action to reduce their soaring borrowing costs.

However, the German chancellor has again stated that her country is not prepared to guarantee the debts of other countries.

Hugh Schofield reports.