Leaders reject bailout deal for eastern Europe at summit
The hardline stance came as Hungarian prime minister Ferenc Gyurcsany warned that the global credit crunch was creating a widening economic chasm in the 27-nation bloc.
Pointing out that the credit crunch was hitting eastern members hardest, Mr Gyurcsany had called for an EU fund of up to €190bn to help restore trust and solvency in those nations.
“We should not allow that a new Iron Curtain should be set up and divide Europe,” he said.
His plan was quickly shot down by Germany and others, balking at the costs involved.
Germany had been under rising pressure to take the lead in rescuing eastern EU members, but chancellor Angela Merkel insisted that a one-size-fits-all bailout was unwise. “Saying that the situation is the same for all central and eastern European states, I don’t see that,” said Ms Merkel, adding you cannot compare the dire situation in Hungary with that of other countries.
EU Commission president Jose Manuel Barroso said eastern European countries were already getting billions in emergency rescue funds from the EU, the World Bank and other financial institutions and did not need a sweeping new bailout plan.
He said the EU has worked with others to provide €25bn to countries in need.
However, Czech prime minister Mirek Topolanek, who chaired yesterday’s talks said the EU would not leave any nation in the lurch.
EU members agreed that governments should make sure that bailouts for banks or car makers should not be protectionist or hurt the economies of other members in the bloc.
Some leaders also called on the bloc to consider making it easier for EU nations to join the euro currency, which has so far proved a stable financial anchor in turbulent markets.
French president Nicolas Sarkozy said the EU could look at reviewing stringent entry criteria for joining the now 16-nation Eurozone.
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