European Union leaders yesterday rejected a mass bail-out of central and eastern European countries, but held out the prospect of bringing them faster under the protection of the euro zone.
At a summit called to bridge differences over how to handle the global economic crisis, leaders made a new commitment to the EU's single market - a response to fears that any protectionist moves to prop up national industries would undermine EU unity.
Hungary had led calls for a 180-billion-euro (159 billion pound) aid package to rescue east European economies whose currencies have been battered in the economic downturn, and called for the two-year preparatory phase for euro membership to be shortened.
"We should not allow a new 'Iron Curtain' to ... divide Europe into two parts," Hungarian Prime Minister Ferenc Gyurcsany said, warning of the growing divisions between rich and poor countries because of the economic crisis.
German Chancellor Angela Merkel said there could be no change to EU treaty rules requiring would-be euro members to get their economies into shape for the single currency zone, but indicated the process could be accelerated.
Referring to the so-called Exchange Rate Mechanism 2 currency grid, a two-year currency stability test which all must pass before entering the euro zone proper, she said: "There are requests to enter ERM 2 faster. We can have a look at that."
French President Nicolas Sarkozy also backed away from an outright change to existing rules.
But he said: "In the future, when the crisis is over, should we look and see what we have learnt from the crisis...to see whether we should integrate new criteria."
Hungary, Poland, Bulgaria, Romania, the Czech Republic and the three Baltic states are all would-be euro zone members.
Gyurcsany said it was time to unify Europe, as happened when communist rule ended in eastern Europe two decades ago.
"At the beginning of the 90s we reunified Europe. Now it is another challenge -- whether we can unify Europe in terms of financing and its economy," he said.
Despite his remarks, the summit agreed merely to look at helping any countries in difficulty on a case-by-case basis.
"The EU is going to leave no one in the lurch ... but that (regional) approach was rejected," Gyurcsany said.
Addressing concerns of protectionism, leaders said the single market should be used as an engine for economic recovery.
"We agreed that as much as possible we should use the single market as a motor for growth," said Topolanek, whose former communist country holds the EU presidency till the end of June.
The Union is split between rich countries such as France which want strong to buoy industry, especially carmakers, and poorer ones - largely in the east - who cannot afford such bail-outs.
Germany, the bloc's biggest economy, has said EU nations must be ready to help each other but has not explained how. It has resisted proposals such as issuing a eurozone bond to raise funds for worse-off members of the currency zone.
A French scheme for 6 billion euros in state loans to its carmakers on the proviso they will not shift production elsewhere has prompted fears that EU governments will rush to protect their own industries at the expenses of others.
The EU Commission has backed the French scheme, noting the loans do not contain any formal conditions on the location of activities, but has said it will monitor events closely.
Topolanek, who had a noisy row with Sarkozy over comments by the French leader suggesting that French carmakers should avoid shifting activities east, said the row had been set aside.
"We do not identify any case of protectionism in a member state," he told the final news conference.
Reuters