A total of 18 observers are scheduled to arrive in Ukraine over the next few days, including those from Gazprom and four EU officials. Five of the team arrived in Kiev on Friday, paving the way for the flow of gas supplies to be resumed.

A Colombian suspected of being a major drug lord has been shot dead in a Madrid hospital where he was receiving treatment. Police believe the murder is linked to a settling of scores. Colombia had been offering five million dollars for his capture.

French President Nicolas Sarkozy met with German Chancellor Angela Merkel on Thursday in Paris at a conference on the future of capitalism. Merkel suggested the UN should create an economic council to oversee financial markets.

Italy's ailing carrier Alitalia was forced to cancel 114 flights after ground personnel fearful of losing their jobs started a wildcat strike. Alitalia is expected to sign an alliance with Air France after its takeover by an Italian investor group.

Following the German government's decision last year to offer a 400 billion euro rescue fund to the country's banks, it will now create a similar fund for private enterprise.

Spain’s Basque Country is primed for an historic trial against several high-profile politicians – among them the region's president, Juan José Ibarretxe (pictured) – who stand accused of links with the banned political movement Batasuna.

Troubled Greek Prime Minister Costas Karamanlis sacked finance minister George Alogoskoufis on Wednesday and initiated a broad cabinet reshuffle to restore government support, badly impaired by riots, scandals and financial woes.

Germany's two main parliamentary groups have agreed to agree on a new 50-billion-euro economic stimulus plan in the financial crisis which has rocked European economies for the last couple of months.

European Central Bank Vice President Lucas Papademos does not expect the eurozone to suffer from deflation but economic difficulties will probably remain until 2010.

European Union delegates are preparing to head to Cairo for multilateral talks aimed at establishing a ceasefire between Israeli troops and Hamas. EU leaders on Sunday repeated calls for an immediate halt to the hostilities.

France condemned Israel's ground offensive Saturday in the Gaza Strip and slammed Hamas for the continuing rocket fire. The Czech Republic, which holds the rotating EU presidency, called the operations "defensive".

Thousands of protesters joined singer Annie Lennox and former London mayor Ken Livingstone at a London rally Saturday to oppose the Israeli offensive on Gaza. Similar demonstrations happened all through the day across Europe.

Seven firefighters were injured in one of two explosions that shook the city of Kosovska Mitrovica on Friday. The city in the north of Kosovo remains deeply split between Serbs and ethnic Albanians nearly a year after Kosovo declared independence.

Despite the dramatic fall in the pound, a large majority of Brits are still against joining the euro, as is Downing Street, which has refuted comments by European Commission president José Manuel Barroso that London was considering the idea.

The financial markets of the 12 European countries adopted the single currency on January 1st, 1999. Ten years on, four others have joined them. The current global financial crisis is the euro's first real test.

The New Year marks the beginning of the Czech Republic term for the rotating European Union presidency. The nation will inherit a host of pressing issues to tackle, including the Gaza crisis and the world financial crash.

Ukraine and Russia promised to restore gas supplies to the EU as soon as observers are in place in Ukraine to monitor the pipelines, following talks between Russia's Gazprom and the Ukrainian state gas company in Brussels.

A Colombian suspected of being a major drug lord has been shot dead in a Madrid hospital where he was receiving treatment. Police believe the murder is linked to a settling of scores. Colombia had been offering five million dollars for his capture.

French President Nicolas Sarkozy met with German Chancellor Angela Merkel on Thursday in Paris at a conference on the future of capitalism. Merkel suggested the UN should create an economic council to oversee financial markets.