A German source said Paris wanted to tap the euro zone‘s 440 billion rescue fund to recapitalize its own banks, which have the largest exposure to peripheral euro zone debt, while Berlin insisted the fund should be used only as a last resort when no national funds are available.

„The French have misunderstood the EFSF. Our position is that banks should seek money in the markets first, then come national backstops, and only when there is no money available would it kick in at the European level,“ the source said.