Heading into a European Union summit meeting on Friday, Chancellor Angela Merkel is lobbying hard for strengthened continental unity, reaching out to the other member states, the European Commission and skeptics at home to cement the rescue of the euro by agreeing on a new conformity on everything from pensions to corporate tax rates, the International Herald Tribune reported. It is an unusual move for the German leader, who since taking office in 2005 has made few memorable speeches on Europe.

Banco Financiero y de Ahorros SA, Spain's third-largest bank by assets, will set aside €9.2 billion ($12.52 billion) to cover loan losses and write down the value of its real-estate holdings, illustrating the ongoing fallout from the country's property bust, The Wall Street Journal reported.

The Sunday Tribune newspaper has been placed into receivership after its main financial backer, Independent News & Media (IN&M), withdrew its support from the company yesterday, the Irish Times reported. The move puts the jobs of 43 staff at the newspaper in doubt although IN&M has agreed to pay staff for four more weeks to give the receiver – Jim Luby of McStay Luby – an opportunity to secure an investor for the title. It was not clear yesterday if Mr Luby would have sufficient financial resources to publish the newspaper this Sunday.

Alexander Knaster's Pamplona Capital Management seems set to retain a stake in oil drilling contractor KCA Deutag, after agreeing jointly with holders of the mezzanine debt to write one of the largest equity checks ever offered for a debt restructuring-led takeover in Europe, said sources close to the matter, Dow Jones Daily Bankruptcy Review reported. Around 50% of KCA Deutag's senior lenders have accepted the proposal from private equity firm Pamplona and holders of its mezzanine debt, a form of quasi-equity, to inject $550 million of new money into the company.

Cash-strapped Egoli Tossell Film, the German producer of Golden Globe winner "Carlos," has embarked on financial restructuring to bring in a new shareholder and secure its future, Variety reported. It is in negotiations with an unnamed Frankfurt-based investor, which will take a significant equity stake in the company. As part of this reorganization, ETF filed last week for the German equivalent of Chapter 11. It expects to emerge within three to four months with its new shareholder and a clean balance sheet.

One of Northern Ireland’s leading family-owned development and building companies has revealed it has been forced to enter into talks with its creditors because of “economic pressures”, the Irish Times reported. The Belfast-based Carvill Group, which has been in business for more than 60 years, has contacted creditors to discuss an insolvency procedure that involves a legally binding agreement between a company and its creditors.

European leaders could announce broad outlines of a new deal to boost the euro zone's bailout funds at a summit on Friday, paving the way for a final agreement when they next meet in March, European officials say, The Wall Street Journal reported. It isn't yet clear whether enough agreement will emerge at the meeting to make an announcement about the rescue funds, but European officials said they expected discussions over the issue Friday as part of a two-step process that will be concluded in late March.

A second group of Spanish savings banks says it has begun work to merge operations and establish a new bank following pressure from the government for the troubled sector to raise more capital and reveal its exposure to bad debt with greater transparency, Bloomberg reported on an Associated Press story. Unnim, a Catalan-based group formed by Caixa Manlleu, Caixa Sabadell and Caixa Terrassa — all savings banks or "cajas" — said in a statement late Friday its board has agreed to begin the process of creating a listed bank.

SAirGroup (formerly Swissair) was responsible for the bankruptcy of Sabena in November 2001, a Belgian court ruled, although it ordered a much lower payment than the claimants had sought, ATWOnline reported. It said the Swiss group, which held a 49.5% stake in the Belgian flag carrier, did not respect an August 2001 agreement to provide 60% of a €430 million ($589.4 million) cash injection needed to keep Sabena in business. The court ordered SAirGroup to pay Sabena’s creditors, its liquidator and the Belgian state €18.3 million in provisional damages.

Spain's unemployment rate soared back above 20% in the last three months of 2010 as more than 138,000 jobs were lost, casting doubts about the strength of the ongoing recovery in the euro zone's fourth-largest economy, data released Friday by the country's statistics institute INE shows. Fourth-quarter unemployment stood at 20.3%, up from 19.8% in the third quarter, and the highest level since the second quarter of 1997, when it was at 20.7%. The third-quarter decline had been the first since the rate started a continued rise in the second quarter of 2007, from well below 10%.