EU Debt Talks Stalled Over Bailout Fund: Sarkozy

Sarkozy told French parliamentarians the dispute was holding up negotiations. He then flew to Frankfurt to talk with German Chancellor Angela Merkel in an attempt to break the deadlock ahead of a make-or-break European leaders' summit on Sunday.

A French presidency source said the French and German leaders were meeting other euro zone policy chiefs and International Monetary Fund head Christine Lagarde on the sidelines of an event mark the end of Jean-Claude Trichet's presidency of the European Central Bank.

France has argued the most effective way of leveraging the European Financial Stability Facility is to turn it into a bank which could then access funding from the ECB, but both the central bank and the German government have opposed this.

"In Germany, the coalition is divided on this issue. It is not just Angela Merkel who we need to convince,'' Sarkozy said to the parliamentarians at a lunch meeting, according to Charles de Courson, one of the legislators present.