Home > economy, europe > EU Rejects a Rescue of Faltering East Europe

EU Rejects a Rescue of Faltering East Europe

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 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. Merkel said she couldn’t see the need for a broad grant of aid to Eastern Europe. “The situation is very different” in Europe’s economies. “We cannot compare Slovakia nor Slovenia with Hungary,” she told reporters.

Hungarian Prime Minister Ferenc Gyurcsany, who proposed a bailout package of up to €190 billion ($240.84 billion), warned that without aid a “new Iron Curtain” would descend on Europe and again separate East from West. Hungary has been battered by declining demand for its exports and a plummeting currency — straining Hungarians who borrowed in euros to buy houses that have now sunk in value.

[ Continue reading original article on The Wall Street Journal ]

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