Economical crisis - the end of the EU?

The economical crisis has been widely covered by all the media outlets. The majority are trying to find out who is responsible, while others are desperately looking for the solution. Many newspapers have concentrated on the United States and whether or not Obama’s Stimulus Bill will help save the world’s economy.

Meanwhile the crisis is also taking a rough turn right here in Europe. Two articles in the New York Times and the Time Magazine analyze the issue and give an overview of the situation. I will bring out the aspects I found most interesting.

The difficulty of the situation is caused by the differences in the levels of development among the 27 member countries of the European Union. One of the concerns is maintain the Euro as the common currency. Only 16 nations currently use the Euro, and analysts believe the common currency will protect the whole Union from bigger damage. (Poland's zloty has dropped 29% against the euro in the past six months, the Hungarian forint by 20%, the Romanian Ieu 17% and the Czech koruna 12%.)

A big concern is the separation between the older and newer member states. Despite the crisis Poland and the Czech Republic are doing quite well, while Hungary, Romania and the Baltic States are in a meltdown.

Here is where the concern for the split of European Union comes in, as according to the Time Magazine “The major split is over how much Europe's richer western countries should do to help their poorer eastern neighbors.”

Hungarian Prime Minister Ferenc Gyurcsany appealed for $230 billion in aid for eastern member states, since: “without help,” he says “there is likely to be a new economic “Iron Curtain” across Europe”. His colleague from the Czech Republic adds “We do not want any dividing lines; we do not want a Europe divided along a north-south or east-west line, pursuing a beggar-thy-neighbor policy.”

“On Friday, the European Bank of Reconstruction and Development, the European Investment Bank and the World Bank said they would jointly provide $31.1 billion to support Eastern European nations, but (NYT) World Bank President Robert Zoellick says East European banks need $140 billion of fresh capital, much of which may have to come from Western Europe.” (Time).

“The new members are finding that their European partners are putting their own national interests ahead of “collective and necessary solidarity,” Mr. Klau of the European Council on Foreign Relations said.”

Only two new member states Slovakia and Slovenia are protected since they have joined the Euro zone. However the EU leaders did not want to change the rules so that more members could join faster.

“Charles Grant, director of the Center for European Reform, a research group in London, is more positive, however. “My expectation is that the euro zone countries, out of pure self-interest, will bail each other out,” he said.”

At some aspects it seems that the situation is worse than expected. But as hope dies last, let´s keep our trust in the European Union and survive the crisis together, shall we?