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EU summit pledges help – but offers no more money – for struggling East

By Staff writer / March 2, 2009

PARIS – With fears of a global financial crisis harming states in Central and Eastern Europe, and doing potential damage to Europe’s successful single currency, European Union heads of state agreed to help emerging states at an emergency summit in Brussels.

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The assistance will not resemble a US-style major bailout or recovery fund, but will take a yet-to-be-determined form on a “case by case” basis, as states need it, according to Jose Manuel Barroso, president of the European Commission.

The meeting, which was called in part to affirm “solidarity” among wealthy or older EU states and less affluent former communist states, comes in the wake of crises in states like Latvia and Hungary, which have needed billions in help in recent months.

The financial crisis has brought recession, hit European banks hard, and spawned fears of division, favoritism, and protectionism not only between eastern and western European nations, but between northern and southern states – as well as between the 16 states in the eurozone and the 11 that are not. As the Monitor reported last week,  what started as an ugly economic crisis across Europe – not only in the East – is now shaping into a crisis over the EU’s identity and character, say political economists.

Some of the divisions in the meeting to affirm solidarity were evident as Hungary proposed a European fund of some $228 billion for recovery – only to be rebuffed not only by Germany, but by the Poles and the Czech Republic. Hungarian Prime Minister Ferenc Gyurcsany responded to the rejection with a warning in the Brussels meeting of a “new Iron Curtain” dividing Europe.

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