Hungary warns about economic divide'

03-02-2009 | AFP

The economic crunch is hitting poorer eastern member states the hardest

Panama Star Prime Minister Ferenc Gyurcsany said the credit crunch is hitting poorer, eastern member states the hardest. The Hungarian leader called for a special EU fund of up to euro190 billion ($241 billion) to help restore trust and solvency in eastern EU members' financial markets.

"We should not allow that a new Iron Curtain should be set up and divide Europe," Gyurcsany told reporters. "In the beginning of the nineties we reunified Europe, now the challenge is whether we will be able to reunify Europe financially."

EU nations are all grappling with a worsening recession, compounded by a severe credit crunch that has left many EU countries looking ever more inward to protect jobs and companies from international competition. Those policies are now undermining the open market cornerstone on which the EU is founded.