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Darling asks EU for more funds to help out

BRITISH Treasury chief Alistair Darling yesterday called on the European Union to spend more to help eastern European countries and other emerging economies hit by the global downturn.

EU finance ministers were expected to agree at talks yesterday to double the funding of the International Monetary Fund to US$500 billion, but Darling said that European governments must do more.

"Our priority must be to support those countries most at risk from the aftershock of the global financial crisis, starting with those on our own doorstep in Europe," Darling wrote in the Guardian newspaper published yesterday.

Some of the EU finance ministers are also warning that the EU may need to set aside more money to help both member nations and neighbors in central and eastern Europe.

Romania will become the fourth country from the region to seek a bailout from the EU, the IMF and the World Bank, officials said on Monday, following Hungary and Latvia ?? both EU members ?? and Ukraine.

Austrian Finance Minister Josef Proell said that the EU's 27 nations needed to think about increasing the 25 billion-euro (US$32 billion) fund earmarked for EU members that don't use the euro.

The EU has already spent 9.6 billion euros of this in loans to Hungary and Latvia, raising money by selling bonds.

Enough funds

EU officials and German Finance Minister Peer Steinbrueck were reluctant to talk about more bailout money. EU Economic and Monetary Affairs Commissioner Joaquin Almunia said on Monday that he thought enough money was there to help Romania and others. Steinbrueck said yesterday that the fund already exists - hinting that more wasn't necessary at the moment.

Darling estimated that eastern European economies will need US$100 billion this year to pay the costs of the recession.

The region went from boom to bust last year as rapidly growing economies - and rocketing house prices - braked sharply in the wake of the financial crisis. Few have built up large financial reserves to weather the storm.


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