EU leaders rule out special aid plan for Eastern Europe[fr][de] 

In an attempt to address what top EU officials described as a negative media campaign depicting sinking Central and Eastern European economies, Czech Prime Minister and current EU president Mirek Topolánek noted that the new member states did not want a rescue plan for their region. 

He said those countries felt the need for solidarity but also shared responsibility. "The EU will not leave anyone in the lurch," he stressed, but would respect the rules of the European single market at the same time. 

Hungary has called for the establishment of a fund worth €160-190 billion to provide liquidity and debt rescheduling for Eastern European states, which are currently experiencing their worst economic recession since the Second World War (EurActiv 01/03/09). 

During their meeting, EU leaders agreed that Europe can only face the current financial and economic crisis by continuing to act together in a coordinated manner under the framework of the Single Market and the European Monetary Union (EMU), according to the summit's final statement. 

"It became very clear that the situation in the central and eastern European countries is quite different from country to country. It makes absolutely no sense to make general assumptions about the situation," said German Chancellor Angela Merkel, whose swift and strong-worded pre-summit comments on the plan may have dampened hopes that the EU can come up with a unified plan to tackle the economic crisis in Central and Eastern Europe. 

Her tough stance was echoed by Poland. "When it comes to any specific plans for Eastern Europe, we don't need those plans," said Mikolaj Dowgielewicz, Poland's EU affairs minister, stressing that help should address the real conditions on the ground and "not try to raise a barrier or a new wall between new and old member states".

The EU will pay great attention to the financial and economic evolution of all its member states, explained European Commission President José Manuel Barroso. "More will be done, but on a case-by-case basis" to reflect differing situations, he added. 

No support for fast-tracking new member states into the euro zone 

European leaders did not discuss at length the issue of speeding up the accession of troubled new member states to the euro zone to help their economic recoveries, but said all those willing to join the single currency would need to comply with the entry criteria. 

President Barroso acknowledged that the euro is seen as a "protecting factor", but stressed that it is up to member states to decide whether to convene a summit on the euro. He said he did not expect such a summit to be held any time soon. 

"Much more important is that we get out of this public perception that solidarity is no longer shown in the EU," underlined Chancellor Merkel. "We will not in any way water down the stability and growth pact and the euro criteria," she said. 

Poland's EU affairs minister pointed the finger at some eurozone members. "We are not asking for any special conditions for Poland. There are countries in the euro zone who do not actually fulfil the criteria for the euro zone, to put it mildly," Dowgielewicz underlined.

€24.5 billion pledged by international finance institutions

Meanwhile on Friday (27 February), major international finance institutions announced  a joint action plan to support Central and Eastern Europe's banking sector and lending to the real economy with loans of up to €24.5 billion in 2009-2010.

• The European Bank for Reconstruction and Development (EBRD) will finance up to €6 billion over the next two years in the form of "equity investment and capital supporting instruments to ensure that its clients are adequately capitalised". The focus will lie on "long-term debt finance to support lending to the real economy, particularly to the SME sector," the bank said.
• The European Investment Bank (EIB) has earmarked €5.7 billion in SME lending facilities to be made available to Central, Eastern and Southern European banks. A further €11 billion is expected during the 2009-2010 period as part of the European Economic Recovery Plan adopted by EU leaders at their December summit. Additional support of €2.8 billion should be approved by end-April 2009.
• The World Bank Group said it intended to propose lending and guarantee support to the banking sector and the real economy in the region of up to €7.5 billion.

French President Nicolas Sarkozy played down calls by Hungary to set up a specific fund to rescue Eastern European countries in financial trouble. 

"There is a risk of a new division of Europe," Sarkozy acknowledged. But he added that the line that had prevailed at the summit was one of "solidarity and responsibility", whereby Eastern EU states would receive support when needed but would also be expected to observe good budgetary governance. 

He recalled that a 25 billion euro fund had already been agreed in December 2008 under the French EU Presidency to intervene in cases where specific countries needed assistance, and that international financial institutions such as the International Monetary Fund (IMF) and the European Bank for Reconstruction and Development (BERD) stood ready to intervene where needed. 

"We have the elements we need today to face [the situation in Eastern Europe]," Sarkozy said. On the responsibility side, Sarkozy recalled that Eastern EU countries had a duty to follow the so-called "convergence criteria" prior to their eventual entry into the euro zone. But he said there was no need to accelerate their entry into the single European currency, saying: "I don't know, we shall see." 

Lithuanian Prime Minister Andrius Kubilius said the European Central Bank should extend lending facilities to EU member states currently outside the euro zone in order to help get credit flowing. Reacting to the idea of fast-tracking Eastern European states towards eurozone membership, he said Lithuania would be very keen to join the euro as soon as possible: "We would be very happy to join in the near future." 

Asked whether he was concerned that Western European banks are withdrawing capital from Lithuania, he said the European Commission and finance ministers should look at this problem very closely. 

Lithuanian diplomatic sources told EurActiv that Lithuania hoped to join the euro by 2011, if not earlier. The major barrier has been Lithuania's high inflation rates, but this risk is receding as an indirect result of the financial crisis. Lithuania's currency, the lita, is already pegged to the euro and the country has already designed a Lithuanian euro coin. 

Irish Prime Minister Brian Cowen declined to comment on media reports quoting German diplomats as suggesting Ireland may require financial assistance from the EU. 

He said Ireland has a strong balance sheet and is in a stronger position than several other countries. However, he acknowledged that a considerable deficit has arisen due to rapidly declining tax revenues. "We have submitted to the European Commission our plan to stabilise the economy by 2013 and to take whatever decisions necessary to work within the stability and growth pact guidelines. And they have accepted this," Cowen said. 

Bulgarian Prime Minister Sergei Stanishev rejected the argument that some countries are trying to cut corners on the road to membership. "Bulgaria is pleading for speedier accession, not for a shortcut to the euro zone," Stanishev explained. Bulgaria has fulfilled four out of five criteria for eurozone entry, with inflation [currently at 7.2%] the only outstanding criterion, Stanishev said.