France and Germany have pledged to announce details of a eurozone shake-up by the end of the month, in an effort to stem the region's debt crisis.

The promise was made during talks in Berlin between French president Nicolas Sarkozy and German chancellor Angela Merkel.

The changes are designed to encourage economic cooperation between countries using the euro, but Mr Sarkozy and Mrs Merkel remain tight-lipped on the details of the plan.

The leaders also say they are united on the recapitalisation of banks hit by fears of a possible debt default by Greece.

Making reforms now is crucial to securing the future of the region, Mr Sarkozy says.

"We are very conscious that France and Germany have a particular responsibility for stabilising the euro," he told a joint news conference.

"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."

There are reports the two leaders have been divided on who should fund support for the region's banks - individual governments or the eurozone fund.

Some French banks are heavily exposed to Greek debt, and it is thought that Mr Sarkozy wants the new 440 billion euro ($602 billion) European Financial Stability Facility to help keep them solvent. Mrs Merkel favours individual governments contributing first.

The announcement comes after an in principle agreement on the bailout of the heavily indebted Franco-Belgian bank Dexia, amid fears the debt crisis could create banking chaos throughout Europe.



