BRUSSELS — German Chancellor Angela Merkel and other EU leaders flatly rejected a new multibillion-dollar bailout for eastern Europe on Sunday, suggesting that additional aid be given to struggling nations only on a case-by-case basis.
Germany had been under rising pressure to take the lead in rescuing eastern EU members staggering from sinking currencies, shrinking demand for exports and rising debt, but Merkel insisted a one-size-fits-all bailout was unwise.
“Saying that the situation is the same for all central and eastern European states, I don’t see that,” said Merkel, adding “you cannot compare” the dire situation in Hungary with that of other countries.
That tough stance came even as Hungarian Prime Minister Ferenc Gyurcsany warned that the global credit crunch was creating a widening economic chasm in the 27-nation bloc that threatened to rend Europe.
Noting that eastern members were being hit the hardest, he suggested setting up an EU fund of up to $241 billion to help restore trust and solvency in eastern members.
“We should not allow that a new Iron Curtain should be set up and divide Europe,” Gyurcsany told reporters.
Eight other EU nations had joined Hungary in vowing to pressure richer members to back up vague pledges of support with action — Poland, Slovakia, the Czech Republic, Bulgaria, Romania and the three Baltic states — but Hungary’s plan was quickly shot down by Germany and others, who balked at the costs.
EU Commission president Jose Manuel Barroso said eastern European countries already were getting billions in emergency rescue funds and loans from the EU, the World Bank and other financial institutions.
