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23 February 2024

Germany, EU reject blanket bailout for eastern Europe

French President Nicolas Sarkozy (L), British Prime Minister Gordon Brown (C) and German Chancellor Angela Merkel (R) attend a G20 preparation meeting at the chancellery in Berlin. (GETTY IMAGES)

German Chancellor Angela Merkel and other EU leaders have flatly rejected a new multibillion euro bailout for eastern Europe, suggesting that additional aid be given to struggling nations only on a case-by-case basis.

Germany and the Netherlands also shot down suggestions that eastern European countries that have seen their currencies plummet be given a quick entry to the euro, which has remained strong against the US dollar and Japanese yen. But French President Nicolas Sarkozy said the EU could look at reviewing the stringent euro currency membership criteria and two-year waiting period once the global economic crisis ends.

Germany, the region’s largest economy, has been under rising pressure to take the lead in rescuing eastern EU members staggering from sinking currencies, shrinking demand for exports and rising debt, but Chancellor Angela Merkel insisted a one-size-fits-all bailout was unwise.