EASTERN MEMBERS of the European Union have denounced bleak reports suggesting their economies are on the brink of collapse and their banks could drag down western parent firms.

The joint statement from financial authorities in Poland, the Czech Republic, Slovakia, Romania, Bulgaria and Hungary was backed up by comments from the European Bank for Reconstruction and Development (EBRD), which said western banks had far less exposure to eastern Europe than was being claimed by many supposed experts and media.

“The published information . . . [is] often oversimplified and misleading, and it can have a negative impact on banks that are operating in these countries,” the banking authorities said.

“Such self-fulfilling speculation totally disregards fundamental economic developments in the CEE [central and eastern European] countries and creates misperceptions that could inevitably be detrimental to both the CEE region and Europe as a whole.”

The region’s stronger and less indebted economies, Poland, the Czech Republic and Slovakia, have previously sought to distance themselves from nations with bigger budget imbalances such as Hungary, Latvia, Romania and non-EU states such as Ukraine. Of those countries, only Romania has not received international aid, but it is now in talks to do so.

Last week, the EBRD, the World Bank and the European Investment Bank said eastern Europe’s banks would receive €24.5 billion to bolster their finances. However, the EBRD’s chief economist, Eric Berglöf, decried “nonsensical” claims that western banks faced a massive €1.7 trillion exposure to debt held by eastern European banks.

A more realistic figure for regional short-term debt to foreign creditors was $130 billion (€104 billion), Mr Berglöf claimed.