International news wires are covered with a very interesting story – The EU will not bailout Eastern Europe.  I believe this quote sums up the view the powers of the EU have quite well:

“Saying that the situation is the same for all central and eastern European states, I don’t see that,” said Merkel, adding “you cannot compare” the dire situation in Hungary with that of other countries. 

Two thoughts come to mind with this statement, but I fully admit that my understanding the European Economic climate is limited to Germany, France, Poland and Hungary, so I may be missing key counterarguments.  

The first problem I see with the bail out on a case-by-case basis for Eastern European countries is much like the U.S. faces with banking and financial institutions.  When one situation pops up, you beat it down like a “whack-a-mole” but another one pops up in place of the original.  The governments of the EU end up trading one problem for another as the financial distress ripples from one country to another.  

What the U.S. needed to do at the outset of this crisis was establish a fund that addressed all the toxic debt in the financial system.  They failed to do so and each financial institution has become an endangered animal as a result.  The EU in the same position as the US, only months later and with the opportunity to do it right.  Instead of preventing the collapse of governments by proactive solutions, the EU elite will allow the smaller countries to suffer (and so will their people).

The second problem comes down to a matter of politics. What if the EU does not wish to see Eastern European countries succeed?  What if the European Union is looking for a reason to NOT admit additional Eastern European countries into the EU.  What better way to keep a county out because they do not qualify to join because of their economic status?

What if the EU is attempting to keep countries like the Ukraine, Belarus or Georgia out of the EU due to pressure from Russia?  

Think about this – Russia is against former Soviet Union countries from gaining further independence. As a result, Russia reminds the EU that the majority of energy resources the EU consumes comes from Russia.  The EU has strict policies on finical requirements in order to join the Union, and what better way to impede a countries entry into the Union than hitting their pocketbook.  

If the European Union truly feels each country needed help on a case by case basis, they risk creating a larger financial crisis, much like the U.S. intensified the situation by not creating a blanket solution.  On the other hand if this is a political move by Russia and the EU, it was created to break the back of smaller former soviet states which would allow Russia the opportunity to regain the territory.