The gap between France and Germany over a deal to work through the European debt crisis is apparently closing, but work remains. In news reports over the weekend, European leaders who met have agreed not to tap the European Central Bank's balance sheet to build up the area's rescue fund.
Leaders are working on a deal that could have European banks taking a bigger hit in an effort to get through the sovereign debt crisis. Greece may be the poster child for this problem, but Portugal and Spain also have issues; and some have expressed concerns about Italy.
When leaders met this weekend, many observers thought they would come up with an agreement to get the ball rolling on solving the debt crisis. Early Sunday, it became apparent that such an agreement might not be possible before Wednesday. That will leave markets in limbo as trade opens Monday.
The new agreement or blueprint for getting out of the crisis will come together Wednesday wen 27 EU leaders will gather.
The euro has fallen on concerns about that anti-crisis package. The worry is that the proposals as they now stand don't go far enough to avoid creating vulnerabilities moving forward. And there's a worry that whatever agreement shows up will not be comprehensive enough to avoid the problem.
How the markets will react to the lack of agreement remains to be seen.
The debt crisis, which has been hanging over the markets remains a focal point for European leaders. The two lead negotiators - France and Germany - have been far apart on how to achieve a solution and provide financial support where needed. However, talk that the meeting Wednesday may bring an agreement is being viewed as a hopeful sign by most observers.
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