EU leaders hold economic crisis summit

BRUSSELS: EU leaders struggled on Sunday to overcome divisions over the economic crisis as protectionism fears and appeals of help from poorer members prompted a warning of a “new iron curtain” in Europe.

Heads of state and government were holding an emergency summit in Brussels to thrash out a united front in the face of the worsening crisis after wrangling for weeks over what to do as Europe slips ever deeper into recession.

With eastern European countries particularly hard hit, Hungarian Prime Minister Ferenc Gyurcsany called for a new show of solidarity, recommending an international support fund for the region.

“We should not allow a new iron curtain to be set up and divide Europe in two parts,” he warned, proposing a fund worth up to 190 billion euros (240 billion dollars).

That was far more than the 24.5 billion euros in aid that international institutions agreed on Friday to make available to eastern European countries to help them cope with the crisis.

German Chancellor Angela Merkel, who arrived late at the summit due to a technical problem with her plane, warned against lumping EU countries into groups.

Stressing that “the situation is very different” from one eastern European nation to another, she cautioned against launching into a debate on “massive figures” of aid for the region.

The financial and economic turmoil has clobbered eastern and central European countries particularly hard because their economies are highly dependent on a steady stream of credit from western sources, which has all but dried up recently.

Monday, AFP