Berlin - European Union (EU) leaders and finance ministers meet in Berlin Sunday to draw up an action plan aimed at combating the world economic crisis amid fears that financial pressures were intensifying across the EU and Eastern Europe.

Hosted by German Chancellor Angela Merkel, Sunday's meeting has been called to set out Europe's position on financial market reform and tackling the recession ahead of the April summit in London of the Group of 20 (G20) major economic powers.

Merkel called on the G20 leaders Saturday to work at rapidly to address the problems facing the world economy.

"It is necessary to ensure that in the future large imbalances in the world no longer exist and that therefore the risks are minimized," she said in a statement.

But another round of global market turbulence this week has underscored mounting concerns about the deepening sense of crisis surrounding the financial systems in Central and Eastern Europe (CEE) as well as parts of the 16-member eurozone, notably Ireland and Greece.

Moreover, the signs of market turmoil in Eastern Europe have underscored the exposure of western European banks in Austria, Sweden, Italy, Germany and Belgium to the risks of a market meltdown in the CEE.

Indeed, Central Europe is gearing up to mark the 20th anniversary of the fall of communism against the backdrop of crumbling economic growth, escalating unemployment, rising budget deficits and signs that consumers have been living beyond their means.

Officials in Berlin have indicated that economically strong eurozone states have already been examining measures for underpinning weaker members of the currency bloc.

But the economic links between western Europe and the new EU member states in Eastern Europe such as Poland, the Czech Republic and Romania, have also meant concerns about the CEE financial system and Europe's growth outlook have ratcheted up the pressure on the euro.

At one point last week Europe's common currency hit a three-month low against the dollar.

To be held in the Chancellor's office, the weekend EU meeting is expected to repeat calls for overhauling the world financial system to ensure greater coordination between national supervisory authorities while boosting government efforts to spur economic growth.

This could include further steps to beef up the role of the International Monetary Fund and the Financial Stability Forum, which was established a decade ago to boost co-operation between national financial supervisory bodies. The measures might include topping capital requirements during good economic times.

However, tensions could also resurface Sunday between nations such as Britain and Germany over the degree of market regulation and closing off supervisory loopholes around the world.

In the face of the slowdown, Merkel will press her colleagues from France, Britain, Spain, the Netherlands and Italy to draw up a new charter aiming at ensuring sustainable economic growth.

But the Berlin summit is also expected to warn again about the economic threat posed by protectionism as nations attempt to shield their economies from recession.

At the same time, the meeting in Berlin is also likely to renew the drive to reactivate the stalled world trade talks and for a crackdown on tax havens.

At their meeting in Washington last November, the G20 leaders drew up 47 points needing action in the face of the global crisis.

G20 officials are currently attempting what is proving to be the difficult task of coming to grips with the specifics of the changes to the international financial architecture called for in Washington. They have until the end of next month to present their proposals.

Also attending the gathering in Merkel's Berlin office will be the Czech Republic leaders, which currently hold the EU's six-month rotating presidency, as well Luxembourg Prime Minister Jean-Claude Juncker who as president of the euro group representing the eurozone.

European Commission President Jose Manuel Barroso and European Central Bank chief Jean-Claude Trichet have also been invited to the Sunday meeting. (dpa)