The French government is finalizing an austerity package that could be unveiled as early as Monday, said a person familiar with the matter, as it seeks to meet its deficit reduction targets and hold on to its prized triple-A credit rating against a backdrop of slowing growth, The Wall Street Journal reported. French President Nicolas Sarkozy has already said he would need to pass an additional €6 billion to €8 billion ($8.3 billion to $11 billion) of austerity measures, the second set of government initiatives to shore up state coffers in just over two months.

France may unveil a new austerity plan to shore up its public finances as early as next week, a member of the National Assembly's finance commission said Thursday, only two months after the country took emergency measures worth €12 billion to hold on to its prized triple-A rating, The Wall Street Journal reported.

Decisions taken over the coming week will define Europe's destiny for generation, The Wall Street Journal Agenda blog reported. For the past 60 years, the European Union in its various guises has helped to ensure peace and prosperity.

Disagreement between France and Germany may prevent eurozone leaders from reaching a crucial deal on a second rescue package for Greece this weekend, a person familiar with the negotiations said Tuesday, The Washington Post reported on an Associated Press story. A common position of the two biggest eurozone economies is seen as a precondition for reaching agreement between all 17 countries in the currency union at a crisis summit on Sunday.

An autopsy of Franco-Belgian lender Dexia shows how funding and solvency are intertwined, highlighting the dangers facing other banks if the eurozone sovereign debt crisis is not resolved soon, International Financing Review reported. There are scores of financial institutions for whom wholesale funding markets are shut and who would be bust were it not for the European Central Bank pumping billions of unlimited liquidity into the system.

Europe's banks expect to be told to raise more capital under a Franco-German effort to solve the euro zone debt crisis after the state rescue of Franco-Belgian lender Dexia SA, Reuters reported. Dexia agreed to the nationalisation of its Belgian retail bank and secured 90 billion euros (£78.4 billion) in state guarantees, in a rescue that raises pressure on other euro zone countries to strengthen their banks.

Trading in Dexia's stock was suspended Thursday as governments and the bank's management scrambled to figure out what to do with the Franco-Belgian lender, The Wall Street Journal reported. It has been clear for days that the bank would have to be broken up, given its heavy exposure to Greek and Italian sovereign debt—a factor that has made other financial institutions wary of lending to Dexia. But details of the plan have yet to be agreed upon.

French Finance Minister François Baroin Wednesday said the extent of private-sector involvement in bailing out Greece may need to be reexamined after the volatility on financial markets over the summer, The Wall Street Journal reported. The comments mark a public acknowledgment from France—which up until now has argued that an agreement by euro-zone heads of state on July 21 should be applied in full—that further participation from private-sector creditors may be required as Greece's financial crisis deepens.

France and Belgium rushed to the aid of Dexia SA on Tuesday, in what will be the first state rescue of a European bank in the euro zone sovereign debt crisis, Reuters reported. The lender to hundreds of French and Belgian towns, which also needed propping up after the 2008 financial crisis, will see its French municipal finance arm broken off and put under the ownership of French state banks.

French President Nicolas Sarkozy will have to walk a fine line on Wednesday, when his government presents its 2012 budget amid faltering growth and a deepening debt crisis in the euro zone, The Wall Street Journal reported. Mr. Sarkozy's room to appeal to French voters ahead of next year's presidential elections is constrained by his commitment to rein in France's deficit—the highest among triple-A-rated euro-zone countries—and retain its prized credit rating. "In France, the problem of deficit reduction is a credibility problem," said ING economist Julien Manceaux.