‘Iron curtain’ fears over EU summit

‘Single market’ approach

EU leaders are committed to putting their single market at the centre of their economic recovery plans, a draft statement issued on half of the bloc read.

Member nations must “make the maximum possible use of the single market as the engine for recovery, to support growth and jobs,” the statement said.

But EU states in central and eastern Europe have expressed concern that their western neighbours are not doing enough to help them provide support to their ailing banking sectors.

Ferenc Gyurcsany, Hungary’s prime minister, called on Sunday for EU members to show solidarity with eastern Europe, while asking for an international support fund for the region.

He proposed that a fund worth up to 190 billion euros ($240bn) be set up for eastern Europe – an amount which would dwarf the 24.5 billion euros in aid that international institutions agreed on Friday to make available to the region.

“We should not allow a new iron curtain to be set up and divide Europe in two parts,” he said.

“At the beginning of the 90s we reunified Europe. Now it is another challenge – whether we can unify Europe in terms of financing and its economy.”

Economies in central and eastern Europe have been hard hit by the financial crisis as they have traditionally received credit from western sources, which now have their own liquidity crises.

‘No separation’

Although Austria has said that eastern Europe should receive support and assistance from older members of the EU bloc, most other countries are against giving the region what they see as special treatment.

“I do not believe that it is necessary now to separate several countries in the European Union,” Mirek Topolanek, the Czech prime minister, said as he arrived at the summit.
 
“I will support an individual approach of the European Union to help and support any countries or European countries, [and] not especially eastern Europe,” he said.

There are growing concerns in eastern Europe that some members of the EU are moving towards protectionism, particularly after France made aid to its car sector conditional on companies not moving production to the region.

The European Commission declared on Saturday that the French move was not protectionism, but concerns remain that rich western governments will rescue their industries at the expense of poorer EU nations.

“Always we must resist the temptation of protectionism,” Donald Tusk, Poland’s prime minister, said after a pre-summit meeting of leaders from nine eastern European countries.