German chancellor Angela Merkel says Europe should work towards a full fiscal union as it strives to resolve the eurozone's debt crisis.<br /><br />This would entail closer supervision of national budgets, with countries facing penalties from Brussels if they falter. <br /><br />But while European stocks have been rising ahead of a crucial EU summit next Friday, indicating optimism, many banks have already begun preparations for a eurozone break-up.<br /><br />Rory Challands reports.
