March 2, 2009

EU turns down Hungary’s $240B plan

The European Union has said no to a proposal by Hungary to assemble a $240 billion bailout for Eastern European countries.

German Chancellor Angela Merkel said a sweeping bailout proposal wasn't appropriate, The Washington Post reported Monday.

Saying that the situation is the same for all Central and Eastern European states "¦ I don't see that, Merkel said after a summit meeting Sunday in Brussels. You cannot compare Slovenia or Slovakia with Hungary, she said.

Hungarian Prime Minister Ferenc Gyurcsany proposed the rescue package. On Sunday, he said large-scale defaults would occur in counties that have spent years recovering from communist economic policies, the newspaper said.

We should not allow a new Iron Curtain to be set up and divide Europe into two parts, Gyurcsany said before the summit began.

But, Czech Republic Prime Minister Mirek Topolanek said he didn't want a Europe divided along a north-south or an east-west line.

Poland and the Czech Republic said they didn't need to be rescued from default and resented being lumped into a block of countries requesting aid, the report said.