European Union leaders, led by German Chancellor Angela Merkel, rejected a call by Hungary for a sweeping bailout of Eastern Europe, as the bloc struggled to find consensus on an approach to the spiraling financial crisis at a summit Sunday, The Wall Street Journal reported. The global recession has greatly strained the bonds holding together the 27 nations that now make up the European Union, formed in the wake of World War II, and poses the most significant challenge in decades to its ideals of solidarity and common interest. Ms.

Ukraine, once considered a worldwide symbol of an emerging, free-market democracy that had cast off authoritarianism, is teetering, The New York Times reported. And its predicament poses a real threat for other European economies and former Soviet republics. The sudden, violent protests that have erupted elsewhere in Eastern Europe seem imminent here now, too. World leaders are increasingly worried about the discontent and the financial crisis in Ukraine, which has 46 million people and a highly strategic location.

A New York private-equity group, KPS Capital Partners LP, agreed to buy the Irish and U.K. operations of Waterford Wedgwood PLC, the historic ceramics-and-crystal maker that was placed in a form of bankruptcy in January, The Wall Street Journal reported. The deal was announced by accounting firm Deloitte LLP, which has been trying to sell the company since it was placed in administration Jan. 5 after years of heavy losses under its former chairman and major shareholder, Irish businessman Sir Anthony O'Reilly.

The board of General Motors' German Opel subsidiary met on Friday to agree a restructuring plan that could cost thousands of jobs and open the way to state support, Reuters reported. The meeting comes a day after thousands of workers protested in Ruesselsheim, calling for an independent Opel after 80 years as a unit of GM. It is the first carmaker in Europe to ask for government support to survive.

European Union governments agreed Thursday to raise the coverage level for bank deposits to €50,000 ($63,565) from the end of June and to €100,000 from the end of 2010, The Wall Street Journal reported. The decision aims to "help restore confidence in the banking sector by strengthening depositor protection," said the Council of the European Union, the EU institution where governments are represented. The EU had set a previous minimum coverage level of €20,000.

A group of multilateral lenders on Friday unveiled a lending package of up to €24.5 billion ($31 billion) to help central and eastern Europe’s battered banking systems weather the financial crisis, the Financial Times reported. The World Bank, the European Bank for Reconstruction and Development and the European Investment Bank, which announced the package in London, hope the move will encourage the international banking groups that control most of the region’s banks to support their subsidiaries.

Hayman Advisors LP, the firm that earned $500 million betting on the U.S. subprime mortgage-market collapse, says Europe’s monetary union is about to fall apart, Bloomberg reported. Richard Howard, a managing director for global markets at Dallas-based Hayman, said Germany may opt to shore up its own economy, Europe’s biggest, rather than bail out fellow euro nations such as Austria, Italy and Spain as their banks sag under the weight of bad debts. That might lead to defaults and compel Germany to renounce the euro, he said.

Germany is the world's leading exporter and fourth-biggest economy, but during the global financial meltdown, it has also been among the most tightfisted. For months, German leaders have warned that spending and lending huge sums to fend off recession--such as the United States' $787 billion stimulus package--will backfire in the long run. In recent days, however, German officials have had a swift change of heart, according to a Washington Post analysis.

The EU is falling short of the US response to the economic crisis because governments have failed to work closely enough, the economic and monetary affairs commissioner has warned. “I really think that the degree of co-ordination could be seriously improved,” Joaquín Almunia said in an interview with the Financial Times. His comments emphasise fears Europe has sown the seeds of a slow recovery and will lag behind the US when the recession ends. There was too little co-ordination between capitals when economic stimulus packages were drawn up, Mr Almunia said.

European Union officials are concerned that the pound’s slide to a record low against the euro could destabilize the British economy, according to a document prepared last month by European Commission and EU finance ministry officials. The pound’s “very rapid” drop “raises questions about the financial stability of the British economy,” said the document, which was prepared ahead of the Feb. 14 Group of Seven meeting in Rome and obtained by Bloomberg News. The currency’s weakness “is a source of concern for the euro area.” The report contradicts Prime Minister Gordon Brown’s argument on Feb.