President Nicolas Sarkozy and Chancellor Angela Merkel have serious differences over how to fix the problems with currency and debt that is threatening to bring down the economies of Europe and the rest of the world.

But they've papered over those differences and have agreed to agree that something must be done to deal with Greek default, recapitalize the banks, and fix the problems with the euro before it's too late.

Reuters:

German Chancellor Angela Merkel and French President Nicolas Sarkozy said after talks in Berlin on Sunday evening that their goal was to come up with a sustainable answer for Greece's woes, agree how to recapitalise European banks and present a plan for accelerating economic coordination in the euro zone by a G20 summit in Cannes on November 3-4.

But they declined to reveal any details of their plan. As they met, British Prime Minister David Cameron urged them to take a "big bazooka" approach to the crisis, telling the Financial Times that euro zone leaders had to break their cycle of doing "a bit too little, a bit too late."

Merkel and Sarkozy were due to hold a working dinner after their news conference.

"We are very conscious that France and Germany have a particular responsibility for stabilising the euro," Sarkozy said, standing next to Merkel.

"We need to deliver a response that is sustainable and comprehensive. We have decided to provide this response by the end of the month because Europe must solve its problems by the G20 summit in Cannes."

Note that there is nothing concrete revealed nor is there likely anything of substance to report. They may agree that something has to be done but that is the extent of their unanimity.

Once that becomes clear, the markets will continue their downward spiral. And we are likely to get a watered down rescue plan by the G-20 summit that won't address the major problems and only kick the can down the road another few months.