A House Divided: EU Braves Tough Times

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As the recession spreads through European markets, EU leaders are scrambling to overcome the fault lines that threaten prospects for a unified recovery. Last week, a collective of Eastern European nations approaching EU leaders for a $240 billion bailout — only to be promptly shot down by an opposition charge from German chancellor Angela Merkel. Since then, currencies have fallen across the board, with the Hungarian florint and Polish zloty dropping 3 percent against the euro, and the euro itself continuing to fall against the dollar. Striking a balance between national interests and continent-wide initiatives has never come easily for Europe; underlying the difficulties are concerns about protecting jobs, recapitalizing banks, and preserving what remains of a fragile lending system.

Sagging Eastern European currencies are exacerbating tensions within Europe, but as Slate’s Anne Applebaum points out, the European financial crisis can’t be read as a straightforward case of East vs West. With Iceland’s shocking declaration of bankruptcy last fall and Britain’s recent economic woes, the distribution of debt isn’t bipolar, and recovery won’t be either. As EU leaders have struggled to forge an equitable plan of action, anti-globalization protests shook the continent, culminating in violent demonstrations in Greece and Latvia. In an effort to quell fear and unrest, British prime minister Gordon Brown met with Barack Obama this Tuesday to renew a pledge to institute a “global New Deal” — an initiative the two hope will repair the international banking system and reestablish confidence.

Image: Luis García