Policymakers from across emerging Europe this weekend
appealed to the EU to show leadership, combat the fiscal storm
and step up its engagement with its eastern neighbours, amid
mounting fears that the regions economic recovery will be
The calls come in the wake of a week of market turmoil that
has cast a shadow over the European integration project and
dampened the appetite for eurozone enlargement.
Irina Akimova, deputy head of the Presidential
Administration of Ukraine, told Emerging Markets she
feared another crisis that would affect the whole continent
unless Western Europe showed solidarity... and fiscal
Lithuanian prime minister Andrius Kubilius said the problems
of the eurozone were problems for all those in the EU.
Usually after a big crisis, it is chance to
reflect, he said. We should have a more integrated
and co-ordinated policies in the European Community.
Jurgen Ligi, the finance minister of Estonia which
this week won backing from European for its bid to join the
single-currency said: Countries are showing
solidarity and we all need to provide good
Meanwhile Bozidar Djelic, the Serbian deputy prime minister,
said that leaders needed to explain to citizens the
common interest of greater integration.
Asked whether the financial problems in Western Europe
would blow Serbias EU accession bid off course, he told
Emerging Markets: There is the realization in
Europe that one needs to be careful when you open and you have
to take into account public opinion, which may not be
supportive of more integration.
The calls for economic solidarity in Europe came as fears
grew that high Western Europe government debt would trigger a
slowdown in exports from emerging Europe, which has been the
main driver for the regions economic recovery.
Today, the EBRD raised its 2010 economic growth forecast for
the region to 3.7% from 3.3% predicted in January although
growth was largely driven by economies with larger domestic
markets such as Turkey, Poland and Russia.
Akimova criticised the E110 billion Greek bailout, accusing
the EU of double standards and moral hazard. There is no
reason for the IMF to support Greece because it provided
extra-budgetary support and there was no balance of payment
problem, she said.
Ukraine is negotiating a second two-year programme the IMF
and is quibbling over the permissible budget gap. We have
the same issue of a high fiscal deficit and it will be cut two
times under pressure under the IMF. But I hope there will be a
level playing field and some flexibility on the IMF
But Marek Belka, director of European department at
the IMF and a former Polish prime minister, shot down these
fears, citing this weeks pan-EU financial stabilization
package: I think its a sign of resolve, its a
sign that European leaders when pressed can act, he told
Belka warned the crisis should not set off reform
fatigue in emerging Europe and said countries should privatize
unprofitable and state-owned enterprises, principally in Russia
and Ukraine, but there is no appetite for such a