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(BBC News) By Chris Morris - European Union leaders are locked in late night talks at a summit called to tackle the eurozone debt crisis and save the single currency.
The key item on the agenda in Brussels is a Franco-German plan on budgetary discipline, with automatic penalties for eurozone nations that overspend.
German Chancellor Angela Merkel has said the euro has "lost credibility".
Meanwhile, world shares fell after the European Central Bank ruled out any substantial aid for indebted nations.
The US Dow Jones index closed down 1.6%. French and Italian shares ended down 2.5% and 4.3% respectively. Shares on Asian markets opened lower on Friday.
Just before the summit started on Thursday, UK Prime Minister David Cameron, French President Nicolas Sarkozy and Chancellor Merkel held 45-minute talks, but sources told the BBC there was "no movement" with each side setting out their respective ground.
UK Prime Minister David Cameron has repeatedly warned he will veto anything which harms British interests.
In a speech in Marseille earlier on Thursday, President Sarkozy warned that "never has the risk of disintegration been greater" for Europe.
The leaders of the 27 EU nations began the summer with an informal dinner, and later continued their talks behind closed doors. A number of working sessions is also planned on Friday.
A set of draft conclusions has been circulating in Brussels and has been seen by the BBC.
The draft text proposes a limit on structural deficits of 0.5% of GDP, compared with the present limit of 3% including debt repayments.
It also includes a way of increasing the firepower of the eurozone bailout fund above 500bn euros (£426bn; $670bn) - a measure which Germany has staunchly opposed.
However, the draft conclusions are likely to change substantially before a final text is adopted at the end of the summit.
Read full story at BBC News...
