Negotiations on the solution to the sovereign debt crisis reach a deadlock

• Die Welt: The summit of the EU leaders may be postponed

Negotiations between the European leaders - France and Germany - concerning the solutions to the sovereign debt crisis, and the plan which is set to be adopted at the summit of October 23rd, in Brussels, seem tense.

Some sources quoted by the international press state that the disagreements revolve around the role which the European Central Bank (ECB) would have in the rescue of troubled countries.

German chancellor Angela Merkel and French president Nicolas Sarkozy had an emergency meeting on Wednesday night in Frankfurt, but made no statement after the discussions. Luxemburg PM Jean-Claude Juncker, who l leads the group of finance ministers in the Eurozone, yesterday said that Wednesday"s reunion of the European leaders in Frank-furt, did not result in a solution to the disagreements.

"We are still holding meetings", said Juncker, who added that the meetings would continue on Friday and Saturday.

It bears mentioning that yesterday, German publication Die Welt stated, quoting sources close to the Berlin coalition, that the German government does not rule out the postponement of the summit of the European leaders, scheduled for October 23rd. The reason why Germany is considering a potential postponement is the stagnation of the talks on the increase of the EFSF rescue fund.

German Finance minister, Wolfgang Schau-ble, said that heavy negotiations to find the solutions to the sovereign debt crisis have encountered certain hurdles, "but not because of France and Germany". Furthermore, Schauble said that the positions of Paris and Berlin are "in total agreement", but they do not yet represent a European solution.

"Germany and France have a responsibility to coordinate Europe, which does not replace the negotiations between the seventeen EU member states", the German PM said.

• The EFSF may buy bonds from the secondary market

The European Financial Stability Fund (EFSF) will be able to buy bonds from the secondary market under certain conditions, in order to keep the financing costs of the Eurozone under control, according to a document obtained by Reuters.

According to the document, which will be discussed today by the European leaders, the EFSF will be able to buy bonds from the secondary market by using the full lending capacity at its disposal, if one of the member states requires support, and the request will be approved by the European Central Bank, and by the Ministries of Finance in the Eurozone. The document notes that only countries that honor their commitments to lower their budget deficits according to the budget legislation of the EU (the Stability and Growth Pact). At the same time, a country will need a history of "reasonable" borrowing costs, as well as no insolvency problems in the banking sector, and to honor its commitments to lower macroeconomic imbalances.

The European Commission and the European Central Bank will prepare a memorandum of understanding with the country requesting aid, according to the document. It also states that the EFSF would then be able to sell its bonds back on the secondary market, once prices rise, or to keep the bonds until maturity, at the risk of lowering its lending abilities.

The issuer country will be able to buy back the bonds from the EFSF prior to their maturity, to lower its indebtedness, according to the document.