* EU's Almunia defends EU measures for E.Europe
* Some E.Europe countries reject bailout plan
* EU summit to discuss plan for E.Europe "platform"
(adds platform proposal, Merkel comments)
By Marcin Grajewski and Boris Groendahl
BRUSSELS/VIENNA, Feb 26 (Reuters) - The European Union
defended its efforts to help emerging Europe before a summit on
Sunday while some members pushed for a more coordinated approach
to the crisis creeping into the region.
A letter from EU Monetary Affairs chief Joaquin Almunia to
the World Bank seeks to dispel the notion that the bloc is
complacent about the threat to stability of collapsing
currencies and strains on the banking system in the east.
The letter, obtained by Reuters on Thursday, details various
EU aid schemes for the region and says help for banks in western
Europe should also help their units in poorer countries.
"I hope that this explanation of policy action and options
will clarify the leading role the EU is already playing in
responding to the macro-financial problems of central and
eastern European economies," Almunia said in the letter dated
Feb. 20.
His letter became public as some EU members tried to move
emerging Europe higher up the agenda of a Sunday EU summit, in
the face of resistance from eastern countries who fear that a
bailout plan for the region may label them as unstable.
The former group want to discuss a proposal for a "platform"
of member states and the Commission charged with coordinating
measures to stem a crisis creeping into the region, a government
source from one of the countries told Reuters on Thursday.
"Some of the central European countries feared that they are
also tagged with a 'bad country' label if there is a package
lumping together the entire region," the source said.
Leaders from emerging European states plan to meet ahead of
the summit to plot a common stance.
Austria and Hungary are the most prominent backers of a
special aid programme for emerging European economies and their
banks, which are mostly owned by Western lenders.
German Chancellor Angela Merkel said on Thursday that while
there was a willingness within the EU to work together on the
problems, the eastern countries had to provide information and
give a clear message about what exactly was needed.
"I think on Sunday at the EU summit, members of those
countries which are affected will at least be in a position to
report on the status of the situation," said Merkel.
CZECHS, OTHERS RELUCTANT
The Czech Republic, which holds the rotating EU presidency,
is among the countries whose economies are in better shape than
those of peers like Hungary and Romania, but whose bonds and
currencies have been hit by a broad selloff of emerging European
assets this year.
Czech Finance Minister Miroslav Kalousek said in a Reuters
interview on Wednesday he rejected any plan that would not
differentiate between countries in the region.
"I admit I am exceptionally reserved toward the plan as it
has been proposed, because the region is thrown into the same
bag," he said. "I believe this is an untrue and distorted
picture." []
The Czech koruna <EURCZK=> has lost 5 percent and the Polish
zloty <EURPLN=> 12 percent against the euro this year amid fears
the financial crisis will hit their export-heavy industries and
fears linger over their reliance on foreign capital.
World Bank head Robert Zoellick said last week the EU should
do more to support economies in central and eastern Europe by
leading a coordinated global effort to help the region.
In his letter to him, Almunia said hundreds of billions of
euros earmarked for banks in EU countries would also help the
units in the countries which do not offer aid on such a scale.
"To date 18 EU member states, representing more than 90
percent of the EU's economy, have committed more than 300
billion euros for public recapitalisation and more than 2,500
billion in public guarantees," he said.
"Because of the existence of large European banking groups,
the effects of these packages are felt beyond the originating
country. The EU framework should provide benefits across the EU,
including in central and eastern European member states..."
Almunia's letter noted that the EU increased to 25 billion
euros from 12 billion euros its fund for members outside the
euro zone which have balance of payments problems and had
granted loans from the facility to Hungary and Latvia.
The EU has also speeded up payments of some regional aid
funds for central and eastern Europe from the bloc's 2007-2013
budget, and increased loans available from the European
Investment Bank and the European Bank for Reconstruction and
Development.
