The President of the World Bank, in an interview to be published on Monday by the German press, called on Western Europe to assist banks in Eastern European countries affected by the financial crisis.
"I think it would be a great tragedy if Europe were to split again" due to the crisis, said Robert Zoellick in a conversation with the daily Sueddeutsche Zeitung. Eastern European countries need 120 billion euros for the recapitalization of banks that are in distress, as they will not be able to do so without external assistance, believes Zoellick. Western banks have recently restricted loans to banks in Eastern Europe, thereby increasing pressure on them.
Hungarian Prime Minister Ferenc Gyurcsany also recently proposed that a "broad circle of countries (EU member states) gather to establish a fund to support banks (in Eastern Europe) amounting to 100 billion euros," which is also supported by Austria. Additionally, the President of the World Bank proposed the establishment of a solidarity fund with developing countries, to which industrialized nations would contribute 0.7 percent of the amounts allocated for economic recovery programs in their countries. Meanwhile, European countries in the G20 called on Sunday at a meeting in Berlin to establish a fund of 500 billion dollars that the International Monetary Fund could manage during economic crises. (H)
