The global economic crisis threatens to divide Europe anew. While all of Europe is being battered by the slowdown, Eastern Europe is even more vulnerable and exposed than its Western neighbors. Yet, the two sets of economies are deeply connected. A plunge in the east will wash — not ripple — across the west. But just as important are political linkages between the two halves of Europe. The European Union was created to unite the continent in a single destiny. Western Europe's failure to help out those nations in the east would repudiate the notion that their fates are shared and could cripple the entire European project.
While the entire world is dealing with the impact of the financial crisis, Eastern European economies have been especially hard hit. According to the European Bank for Reconstruction and Development (EBRD), the region needs about $130 billion to refinance short-term debt owed to foreign creditors. The shortfall threatens an unprecedented crisis in the region and has governments scrambling to get help.
Their first impulse is to turn to the EU. The union held an emergency summit last month, at which Hungarian Prime Minister Ferenc Gyurcsany called for a 180 billion euro bailout package to help the weakest EU members. Ultimately, as much as $380 billion could be required. That plea fell on deaf ears. German Chancellor Angela Merkel, reflecting the traditional German suspicion of fiscal laxness, rejected the notion, arguing that Eastern European countries should be dealt with on a case-by-case basis. And, indeed, several of the EU's central and Eastern European members, such as Poland and the Czech Republic, whose economies are still in good shape, have protested against being lumped together with other countries who are not.