Paris - The leaders of the 15 nations using the euro as a single currency are to meet later Sunday in Paris to discuss common responses to the finance crisis.

As the crisis has spread from the United States, European nations have largely acted unilaterally to contain the damage.

Britain has undertaken a 60-billion-euro (80-billion-dollar) plan to partly nationalize four large banks, Ireland has guaranteed deposits in its six largest banks and other countries have acted on a case-by-case basis to bail-out struggling banks.

However, the European banking system remained paralyzed by the reluctance of the financial institutions to lend each other money. And European equity markets continued to plunge the past week, with bourses in London, Frankfurt and Paris all losing more than 21 per cent of their value in the five trading days.

On Saturday, after talks with French President Nicolas Sarkozy, German Chancellor Angela Merkel said the aim of Sunday's summit would be to find a "balanced reaction in the euro-zone to the financial crisis with the necessary leeway for the individual member states."

"Balanced behaviour by all member states" was necessary, and each nation must have "the same toolboxes" to fight the crisis, the German chancellor said.

It is widely expected that the euro-zone leaders will repeat Friday's declaration by finance ministers of the G7 group of industrial nations to undertake all necessary measures to prevent "important financial institutions" in their countries from collapsing.

These measures could include the partial nationalization of struggling banks, such as Britain has done. British Prime Minister Gordon Brown is to hold separate talks with Sarkozy in Paris before the euro-zone summit, because Britain does not use the single currency.

German media reported Saturday that Berlin could pass legislation as early as Monday to recapitalize its banks with a vast cash injection of up to 100 billion euros.

Chancellor Angela Merkel has said she will sign off with euro-zone leaders Sunday on the extraordinary bail-out before announcing details. Other countries may decide similar measures.

However, many analysts believe that this may not be sufficient to halt the meltdown, and that governments need to guarantee intra-bank trades to ease the credit crunch.

Whatever comes out of Sunday's euro-zone summit will not be the final European decision on the crisis, as the European Union is holding a summit in Brussels on Wednesday and Thursday during which new proposals could be put forward. (dpa)