European leaders are struggling with the question of whether Greece should be entitled to the next tranche in the $155 billion rescue package created a year ago by the European Union and the International Monetary Fund.
In addition, leaders are debating how to assemble a second rescue loan for Greece, The New York Times reported Friday.
After a 2-hour meeting with French President Nicolas Sarkozy, Merkel said, "We would like to have a participation of private creditors on a voluntary basis," a reversal from Finance Minister Wolfgang Schauble's stance that banks share in the losses rather than have the European Union foot the bill for a Greek bailout.
It is estimated Greece requires an additional $84 billion. In Germany, footing the bill for budgeting errors and government generosity in Greece has proven unpopular.
In Greece, where protests continue in the streets of Athens, Prime Minister George Papandreou has assembled a new Cabinet in hopes of creating a coalition that will adopt a new round of austerity measures.
Papandreou named former Defense Minister Evangelos Venizelos as the next finance minister.