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3/2/09

Forbes: EU- Tough Love For Eastern Europe - by VGidya Ram

For the complete report from Forbes.com click on this link

EU- Tough Love For Eastern Europe - by VGidya Ram

The European Union's decision to play tough and reject Hungary's call for a 180.0 billion-euro ($226.3 billion) aid package for Eastern and Central Europe weighed on the region's already-beleaguered currencies on Monday, but it was probably a good move. European leaders, including German Chancellor Angela Merkel and European Commission President Jose Manuel Barroso shot down Prime Minister Ferenc Gyurcsany's suggestion that an aid package of that size was necessary to avoid "a new Iron Curtain…to divide Europe into two parts." He also called for the E.U. to relax the stringent criteria for joining the euro zone. The rejection triggered a sell-off in both currencies and stocks, with the Hungarian forint down 2.4% against the euro, at 306.98 to the euro, and the Polish zloty down 2.2%, at 4.75 to the euro, in Monday morning trade.

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