This is the VOA Special English Economics Report.
of the European Union met Sunday in Brussels to discuss measures to deal with
the world financial crisis. But the emergency meeting showed growing divisions between
western European countries and newer members of the European Union.
in central and eastern Europe have been hit hard by the worldwide credit crisis
and less demand for exports in western Europe.
Hungary's prime minister, Ferenc
Gyurscany, has called for two hundred thirty billion dollars in aid for the
weakest of the twenty-seven members of the European Union. The leader of
Europe's biggest economy, however, opposes such a large plan. German Chancellor
Angela Merkel has suggested targeted aid for a few countries instead.
The European Union and the International
Monetary Fund have already lent Hungary twenty-five billion dollars. Latvia
received more than nine billion from the I.M.F. in December. But demonstrations
fueled by the economic crisis led the Latvian government to resign last month.
The World Bank and two European
development banks agreed last week to provide up to thirty-one billion dollars in
aid to central and eastern Europe. A main concern is that the failure of some banks
or governments to pay their debts could send a financial shock across many
The effects could reach beyond central and eastern
Europe. Banks in Austria, Italy and Sweden that expanded into the area during
good times are now in danger of heavy losses.
in countries outside the euro area, like Hungary and Poland, businesses and
individuals often borrowed in euros. Lower interest rates made euro loans a
good deal at the time. Now, those loans have become more costly as local
currencies have lost value. Chances are greater that foreign currency loans in
some countries will not be paid back.
But some of the central and eastern
economies in the European Union are in relatively good health. Poland is the
biggest and its economy is less dependent on exports. The Czech Republic is
also considered in a better position. The Czechs currently hold the E.U. presidency.
On Wednesday, banking supervisors from
the Czech Republic, Slovakia, Poland, Romania, Bulgaria and Hungary released a
statement. They expressed concerns that information about risks to financial
systems in central and eastern Europe is "often simplified and
And that's the VOA Special English Economics Report,
written by Mario Ritter. I'm Steve Ember.