Politicians from central and eastern European countries are calling for greater help — and understanding — from the eurozone for their struggling economies.
Mikolaj Dowgielewicz, Poland’s minister for Europe, said that while members of the eurozone were being allowed to depart from the rules of the Stability and Growth Pact by running high budget deficits in exceptional conditions, the new EU member states, which have not yet adopted the single currency, might be helped to join the eurozone.
Andrius Kubilius, the prime minister of Lithuania, said that his country, which narrowly missed entry in the eurozone in 2007 and was still committed to adopting the single currency, faced the additional difficulty of not being able to devalue its currency, the litas. “We are now looking with even more emotion to the event, a few years ago, when we missed entry to the eurozone. It would be very good to be part of the eurozone, to enjoy more stability and resources,” he said.
With the Baltic states in their worst recession since independence from the Soviet Union in 1991, Kubilius yesterday met Swedish leaders and bank chiefs in Stockholm. He asked Swedish banks, which control a major part of Lithuanian commercial banks’ capital, to contribute to a stabilisation fund for Lithuania, or provide a guarantee to their subsidiaries.
Dariusz Rosati, a Polish Socialist MEP and a former foreign minister, urged the European Central Bank (ECB) to “lend credibility to the new member states, and their central banks.”
“They are not part of the euro, but their situation is of common interest. A statement, from the ECB — that the situation is closely followed and that in case the situation deteriorates the ECB would be ready to support them — would help,” he told European Voice.
“I expect such a statement from the European Commission too,” Rosati said, adding: “This would release pressure on the currency and increase their scope for borrowing.”
Alexandr Vondra, the deputy prime minister of the Czech Republic in charge of European affairs, said it was not that the whole region was “a black hole.”
He said rating agencies, which had “painted everything rose a year ago, were now under attack and were painting everything black.”
“The situation of Poland, fiscally, is very different from that of other central and eastern European states: Poland is in good shape.”
But Poland’s ambition of adopting the euro in 2012 looked more doubtful this week after the central bank issued a report questioning the wisdom of entering the Exchange Rate Mechanism this year in the middle of currency turmoil. Under EU rules, countries wishing to join the eurozone have to ensure that their currencies do not trade outside fixed bands against the euro determined by ERM II. “We do not feel 2009 is a good year for bringing Poland into the ERM II,” said Witold Kozinski, the bank’s deputy governor.
Joaquín Almunia, the European commissioner for economic and monetary affairs, asked this week about Poland needing financial aid, said that he was “concerned by volatility in exchange rates for some currencies which have floating systems of exchange rates.”
Romania’s President Traian Basescu said that there was a big difference between how the countries from the eurozone and those from outside it were weathering the financial crisis and that the EU should take this into account. “The policy of the Union, implicitly of the European Commission, must be to allocate financial resources to transfer to banks in countries that are not in the eurozone,” he said.