Some aid approved, some (thus far) turned down.... possibly more later:
EU secures €50bn to bail out new members
Published: Friday 20 March 2009
euractiv.com
At their spring summit which ended on Friday (20 March) in Brussels, EU leaders decided to double an emergency facility to bail out East European EU members that are not members of the euro zone.
Background:
Created in 1988, an EU facility to help with balances of payments was recently used in the case of Hungary as a consequence of the ongoing financial crisis (Budapest received a bail-out to the tune of 6.5 billion euro in October 2008). The facility has since been increased from 12 to 25 billion euro.
The funding comes from the money markets. The Commission in fact borrows money from the markets using EU-denominated bonds.
Latvia was the next country to make use of the facility, as the country had to take out a 7.5 billion euro, IMF-led rescue loan. The package included financing from the EU, the Nordic countries, the Czech Republic, Poland, fellow Baltic state Estonia and the World Bank.
In early March, it became known that Romania too is holding talks with the European Commission and the International Monetary Fund to secure a similar rescue package (EurActiv 05/03/09). During the summit, Romanian Prime Minister Emil Boc said his country may need 20 billion euro from the EU and the IMF.
More on this topic:
ListNews: Eastern EU members seek shelter from economic storm
Other related news:
* Bulgaria in the eurozone waiting room
* Early Eastern eurozone entry a must, France warns
* Media blamed for Eastern Europe panic
* Eastern EU in plea for multi-billion bailout fund
* Nordics debate need for euro's shelter from crisis
Mirek Topolánek, Czech prime minister and current holder of the rotating EU presidency, chose the language of figures to sum up the summit's decision.
"I would like to mention three particular figures – five, 50 and 75. Each time, it is billion euros. Five billion for particular projects with concrete objectives for the energy security of the EU, supporting innovation and new technologies. That's the EU stimulus package, and I'm very happy that we adopted that" (EurActiv 20/03/09).
"Fifty billion – that's the amount to which we increased the guarantee for countries which have difficulties with their balance of payments. And that's a doubling of that amount, from 25 to 50 [billion euro]. If there is a need to help countries which are particularly hit by the crisis, then there is the possibility to help them."
"And 75 billion [euro] – that's the figure for a voluntary loan to the IMF, to enable it to react better in the context of the crisis. So we have three real outcomes in figures," Topolánek said. .....
Fears of unrest in eastern Europe grow as Czech government collapses
Presidency of EU in question as Mirek Topolanek loses confidence vote
By Vanessa Mock in Brussels and Daniel McLaughlin in Budapest
Thursday, 26 March 2009
independent.co.uk
The collapse of the Czech government sent shivers through financial markets in eastern Europe yesterday fanning fears about the growing political unrest that appears to be sweeping through the EU's eastern fringes.
Prime Minister Mirek Topolanek's government narrowly lost a vote of no-confidence on Tuesday night, four days after the Hungarian leader, Ferenc Gyuarcsany, threw in the towel and five weeks after the Latvian government fell under a barrage of public protests. Most of eastern Europe's main currencies lost value yesterday as Czechs pondered the impact of Mr Topolanek's defeat, while Romania turned to the IMF for a €20bn lifeline.....
...
On the brink: The sick men of Europe
Latvia
A few months ago, it was the EU's fastest growing economy, with growth of nearly 11 per cent. Now Latvia faces economic ruin. In February the government collapsed following violent demonstrations in the capital Riga in protest at the government's handling of the crisis and steep IMF-imposed cutbacks. Farmers have blockaded the capital in protest at plummeting incomes, while unemployment has risen to 10.4 per cent, more than double what it was a year ago.
Hungary
Premier Ferenc Gyurcsany resigned last weekend amid efforts to impose austerity cutbacks demanded by the IMF. Hungary was the first EU member to seek an IMF bailout to stave off economic collapse. The Hungarian economy is expected to contract by as much as 3.5 per cent this year. Public sector unrest over tax and pension reforms is at boiling point and social tensions have risen with "Gypsies" blamed by nationalist groups for a crime wave linked to the worsening economic conditions.
Ukraine
Demonstrations occur almost daily as the country teeters on the brink of collapse. Economic output has plummeted and Russia continues to meddle in its energy industry. Despite this, President Viktor Yushchenko and Prime Minister Julia Tymoshenko are still locked in a power struggle that has paralysed Ukrainian politics since the 2004 Orange Revolution. Now the IMF has postponed payment of the second tranche of a $16.4bn loan due to their failure to agree on a budget.... |
