Australia’s ailing car industry has taken another blow, with Albury manufacturer Drivetrain International Systems falling into receivership with debts of $30 million to $40 million, SmartCompany.com.au reported. Production has been suspended for a week, with the company’s 400 workers stood down. Receivers and manager Stephen Longley from PricewaterhouseCooopers will assess the company’s financial position and attempt to sell the business as a going concern. Production is expected to resume next week in a reduced form.

Fears are growing that Ireland could default on its national debt after the cost to insure against possible losses on loans to the country rose to record highs at the end of last week, The Guardian reported. Credit ratings agency Moody's recently followed rival Standard & Poor's in warning it might downgrade Irish debt, amid fears that one of Europe's former success stories is falling into a deepening recession.

The European Union's emergency summit on March 2 to discuss growing protectionism is a make-or-break moment for the 27-nation bloc. At stake is its greatest achievement -- the single market for goods, people and capital. A row over France's latest car-industry bailout plan threatens to drive a wedge between member states. How the EU responds will have consequences not just for the EU but for global free trade. Unfortunately, the omens don't look promising. On the face of it, the French plans look like a clear case of state aid--illegal under EU rules.

Moody's Investors Service placed the bond ratings of Estonia and Lithuania on review for possible downgrade Tuesday, citing severe deterioration in the regional macroeconomic environment. Analysts said a downgrade was likely. The three Baltic Sea-hugging neighbors Latvia, Lithuania and Estonia face an uphill struggle to resuscitate their economies, mired in recession or headed there, rein in their current-account deficits and maintain their currency pegs, MarketWatch reported. Within the emerging-markets universe, Eastern Europe is the region most vulnerable to economic and financial risk.

Swiss bank UBS AG said it has appealed a recent ruling by a Luxembourg court ordering it to reimburse a French fund-management company €30 million ($38.6 million) that had been invested with New York financier Bernard Madoff, The Wall Street Journal reported. UBS is appealing the ruling because it doesn't agree with "the decision's rationale," according to a UBS spokeswoman. The French fund-management firm, Oddo & Cie.--which has already received the €30 million--said it had been notified of the appeal.

Spain’s economy shrank by the most in more than 15 years in the fourth quarter, as what may be the worst recession in half a century pushed the unemployment rate to the highest in Europe, Bloomberg reported. The economy contracted 1 percent from the previous three months, the National Statistics Institute said Wednesday, compared with a median forecast of 1.1 percent in a Bloomberg News survey. The economy entered its first recession since 1993 after shrinking a revised 0.3 percent in the third quarter. From a year earlier the economy contracted 0.7 percent.

Bank of England Governor Mervyn King said the U.K. is in a “deep recession” that may force policy makers to create money and pump it into the economy after cutting interest rates to a record low, Bloomberg reported. “Further easing in monetary policy may well be required,” said King at a press conference in London after presenting the central bank’s revised quarterly forecasts Wednesday.

EU finance ministers on Tuesday urged coordinated action to tackle the economic crisis, against a backdrop of increasing criticism over French "protectionist" moves in its auto sector, Agence France-Presse reported. With Europe in a growing recession the ministers agreed to work together on ways to deal with their banks' "toxic assets" which are hampering lending. They also looked at the progress of a €200 billion ($260 billion) stimulus package designed to kick start their ailing economies. Overall the cry went out to avoid the temptation of protectionism at all costs.

Ireland’s Ulster Bank has today launched what it terms "a new initiative designed to help potential home buyers onto the property ladder”, Finfacts.com reported. The Ulster Bank Secure Step Mortgage gives customers access to the local housing market with a five-year protection against falling house prices. The Secure Step Mortgage is being launched in conjunction with residential property developers from across Ireland and is available to first-time buyers and customers trading up.

As the worldwide economic crisis continues, DLA Piper has launched a formal layoff consultation that will likely eliminate 140 jobs in its United Kingdom offices, Bankruptcy Law360 reported. "This is a difficult but necessary decision based on our reassessment of resource levels following the continuing deterioration of the market. This prudent action will align our capacity levels with existing client demands," DLA Piper managing partner and joint-CEO Nigel Knowles said in a statement.