EU Rejects Multi-Billion Dollar Rescue Plan For EE

[Jaga]

European Union leaders have ruled out a multi-billion dollar rescue plan for Eastern Europe in the face of the global economic crisis, despite warnings from Hungary that the rejection could lead to an economic "iron curtain" across the continent. The announcement followed an emergency EU summit on Sunday at which officials debated ways to tackle Europe's biggest financial crisis in generations.

Ahead of the EU summit in Brussels, Hungary's Prime Minister Ferenc Gyurcsany urged the European Union to show solidarity by establishing a support fund of about $240 billion to help failing economies in Eastern Europe. That was far more than the roughly $30 billion that international institutions agreed on Friday to make available.

Mr. Gyurcsany, whose country is among the hardest hit by the global economic crisis, said his plan could prevent the creation of a new "iron curtain" which, he warned, would "divide Europe" between rich and poor nations.


Germany's Chancellor Angela Merkel at the EU summit in Brussels, 01 Mar 2009
However, Chancellor Angela Merkel of Germany, Europe's largest economy, made clear she strongly opposes a bailout plan for Eastern Europe.

www.voanews.com/english/2009-03-01-voa20.cfm

[karl]

For I wish not to toss salt upon the open wounds of those suffering. But, the financial crises pain has now struck and in doing so, has brought equal to all, for the rich countries have much to lose, the less rich, less to lose, for they were previous with out much.

Cash smiles Credit frowns and the loser crys

And for what?

For some years to the present, my country has felt a great deal of increase in taxs/cut backs on various welfare programmes/increase of health insurance cost out of the pay envelope. All, as a Federal mandate for balancing the national budget.

Our Eastern neighbours, have in this stead, spent freely and enjoyed of the boom in their property and money markets.

Now, the rainbow is gone and now what, the money in the piggy bank is empty. To shake and rattle, and yes, no more money...

For now the financial world is not so rosy, and now these very same countries come to us with their hands out for money to replace into the empty coffers, and for what? They actually believe this will solve their financial problems of that we are all feeling?

We should reward reckless spending as a virtue for incompetence? And at similar, forget those for only a short time past, had spit in our direction for we are the inheritors of our former Nazi government?

I think not.

For as of most, we are all dependent upon foreign trade. But, there must be people able to purchase our products, for this is the foundation of most any industrialized economy. Goods and services must be exchanged for like, for this is foreign trade.

We build advanced machinery and autos, in exchange, we receive in exchange, goods and services needed within our economy and if not like export is received, then we have the credit placed upon the books of the receptor nation, for future business use at a latter date.

If inventories are not shipped because of over-production, then it is a rational that production must be slowed until those inventories are used and not setting about and as simular, new markets must be located and developed.

This is the road to recovery, and our eastern neighbours need be provide attention to that fact of life. For money given as useless, is money received as wasted...

Karl

[Jaga]

Karl,

I agree that Germany was stressed terribly by the German unification. Germany also contributed to EU more than other countries.
I posted this first post not because I support Hungarian request. Hungary is in bad economical situation, worse than Poland or Czech republic due to its debt.

Here is more about the crisis in Europe:

www.iht.com/articles/ap/2009/03/02/business/EU-Eastern-Europe-Crisis.php

WARSAW, Poland: Jerzy Staros remembers the Nazi atrocities committed on the streets of Warsaw during World War II and the empty store shelves under communism. So he isn't particularly shaken by the world financial meltdown.

"I've lived through crises, and this is no crisis," said Staros, a stooped 81-year-old who lives on a monthly pension of 2,000 Polish zlotys ($545). "A crisis is when people can't feed themselves and starve on the street."

Attitudes like Staros' have helped mute the reaction in Eastern Europe to the rejection of pleas for help for the region at Sunday's European Union summit.

Germany's Chancellor Angela Merkel rejected a proposal from Hungarian Prime Minister Ferenc Gyurcsany for a regionwide bailout, and EU leaders also turned aside pleas for accelerated membership into the euro zone from countries who have seen their national currencies slide.

The region's economic setbacks have led some to fear that social unrest could feed xenophobia and extremism, wipe out the progress achieved since the end of communism, or drive a wedge between the European Union's richer Western members and the 10 ex-communist states that joined in the past five years.


The crisis has led to unrest in Latvia, where the governing coalition fell and people rioted. But much of the anger is being diffused by disputes among governments in the region, or met with a shrug and memories of far worse times and far worse leaders. And local politicians, not European Union membership, are often the target.

So far, all those factors are helping keep down tensions, and for now many people still play down the bad news because it pales in comparison with the deprivations of communism or the 20 percent jobless rate of only six years ago. It's a situation bolstered by the newfound glitz of cities like Warsaw and Prague, where wealth is still on display.