German Chancellor Showing Cautious Support for Spain, Italy Aid

"European heads of government also feel a duty and have a duty to do everything possible to preserve the common currency."

In a signal that August vacations are ending and it is time for European leaders to start grappling with the sovereign debt crisis again, Angela Merkel, the German chancellor, has expressed cautious support for measures to support Spain and Italy, while a Finnish official has suggested that euro zone leaders are preparing for the worst, including a possible breakup of the currency bloc.

Major European stock indexes advanced Friday after Ms. Merkel backed a statement by Mario Draghi, the president of the European Central Bank, that the bank would do whatever it took to preserve the euro.

In contrast to some members of the German Parliament, Ms. Merkel expressed no objections to plans by the E.C.B. to buy bonds to hold down borrowing costs for stricken countries, if certain conditions were met.