Trade unions asked the Italian government this week to promote a production alliance between Italy's two largest steel producers, ILVA and Lucchini, to help the troubled firms stave off further declines, Reuters reported. The Italian steel sector, the second largest in Europe after Germany, has been hard hit by a drop in demand that has been exacerbated by tough austerity policies. Its output contracted by more than 11 percent in May from a year before. "Only by pushing forward production integration among the largest Italian steel players can we think of getting out of this tough situation.

Britain did not suffer a double-dip recession early last year as previously thought, but household living standards suffered their biggest drop in a generation at the start of 2013. The Office for National Statistics said on Thursday that following a major annual revision of historic economic data, figures now showed that output flat-lined in the first three months of 2012 rather than contracting.

A nationwide strike froze public-transport services, shrank hospital staffs and kept many public offices shut across Portugal on Thursday amid a growing consensus among workers and businesses that austerity has reached its limit, The Wall Street Journal reported. Protests and strikes have become common since Prime Minister Pedro Passos Coelho's government took over in mid-2011 to implement measures to control the country's spiraling deficit under a €78 billion ($101.49 billion) bailout from the European Union, the International Monetary Fund and the European Central Bank.

The board of Seat Pagine Gialle approved on Thursday a debt restructuring proposal and new strategic guidelines to relaunch the Italian yellow pages publisher, Reuters reported. In February, the heavily indebted company said it would ask creditors for a debt restructuring after conceding its interest burden and the recession had made its targets to 2015 unachievable. In a statement, Seat said the debt proposal, which will be presented for review to a court in Turin, envisages that a portion of its debt will be converted into equity and part of it reimbursed with cash.

Rules to force losses on creditors in failed banks were agreed by EU finance ministers early on Thursday, putting in place another piece of a eurozone banking union that could eventually share the costs of future bank bailouts, the Financial Times reported. After more than a year of complex and fraught talks on how to lift the burden of paying for bank rescues from taxpayers, ministers brokered terms in Brussels preserving some national discretion when dealing with lenders in trouble.

European leaders sparred Thursday over whether the region's fight against its youth unemployment crisis needs a big infusion of new money, with some of the bloc's financial powers resisting calls from other nations to do more, The Wall Street Journal reported. Meeting at their regular summit in the European Union capital, the leaders discussed proposals to reduce sky-high youth unemployment rates in countries hardest hit by the crisis: Greece, Spain, Italy, Ireland and Portugal. Even in France, more than 25% of young workers are unemployed.

European Union finance ministers sought Wednesday to agree on rules for dealing with failing banks amid divisions over when governments should be allowed to bail them out, The Wall Street Journal reported. The new rules are supposed to put an end to expensive taxpayer-funded bailouts, which have pushed several European governments to the brink of bankruptcy, and instead place the burden on a bank's investors and creditors.

The U.K. government on Wednesday renewed its commitment to austerity by setting out plans for another round of deep spending cuts that will begin in April 2015—a month before the next general election is likely to take place, The Wall Street Journal reported. The wisdom of cutting budget deficits at a time of slow economic growth has been questioned by a growing number of economists, the International Monetary Fund and other international bodies.

The shareholders of Spanish plastics bottle maker La Seda de Barcelona on Wednesday rejected a debt refinancing plan that would have allowed the company to withdraw from insolvency proceedings, its largest shareholder said, Reuters reported. The Catalonia-based company, which makes bottles in Europe, Turkey and North Africa, has been in talks with creditors for months since high material costs and excess supply of the PET plastic containers it makes put pressure on its business.

Italian Prime Minister Enrico Letta unveiled a package of measures aimed at bringing down Italy's spiraling youth unemployment—among the highest in Europe—fulfilling one of the signature promises of his shaky government, The Wall Street Journal reported. With the measures introduced on Wednesday, Mr. Letta hopes to persuade the European Union at a summit this week to grant Italy new tools that could help it boost growth and employment. The stakes are high, with pressure building on Mr.