Local view for "http://purl.org/linkedpolitics/eu/plenary/2009-12-15-Speech-2-303"
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"en.20091215.18.2-303"2
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"Ladies and gentlemen, the crisis has demonstrated that the countries of Central and Eastern Europe outside the euro area are much more vulnerable than those where the single currency is used. As a result of their dependence on strong exports and foreign capital, as well as the population’s high level of foreign currency debt, the rate of recovery is also slower than in those countries enjoying the security of the euro area. If the solidarity between Member States does not work in practice, rather than just as a sound bite in slogans, the European Union’s internal cohesion will diminish, thereby hampering the whole EU’s performance.
However, we do not need any new EU instruments to achieve this solidarity, especially not handouts. The existing opportunities and resources must be used sensibly. In this respect, the European Central Bank can help in constantly maintaining the liquidity of the banks in the region. The European Investment Bank can also help by providing targeted credit to the region’s small and medium-sized enterprises, while the EU’s institutions can help by adapting the rules for using the money from the Cohesion and Structural Funds to suit the extreme situation. I would particularly like to draw your attention to the fact that many people like to treat Central and Eastern European countries en masse, even though these countries are very diverse, with different crisis exit strategies as well.
For instance, after nearly eight years of incompetent socialist administration, Hungary has used up all its reserves. At the moment, it is forced to exercise restraint, which is in stark contrast to the practical actions adopted in other European countries for managing the crisis, based on economic recovery. While the Western European governments are already thinking about drawing up their exit strategies, some countries in Central and Eastern Europe which have been worst affected by the crisis are still facing major recession in 2010 as well. Therefore, when it comes to devising exit strategies, it is vitally important to have some way of differentiating between countries.
EU leaders should not devise standard rules which would only exacerbate further the situation of some countries and that of their population. When drawing up the new financial system regulations, attention must be focused on ensuring that the tightening of capital requirements does not generate unfair competition between banks. The banks in Central and Eastern Europe which have turned out to be healthy have not received any injection of capital from anyone. This means that they would only find it more difficult to deal with the stricter capital requirement regulations than their rescued counterparts in Western Europe. This would result in a decline in their desire for credit, which was not very great anyway, with small and medium-sized enterprises ultimately ending up the victims of this situation. We must avoid this scenario at all costs."@en1
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