Reinfeldt: multinational approach for eastern Europe aid

Prime Minister Fredrik Reinfeldt on Monday urged the International Monetary Fund to take a leadership role in helping eastern European countries weather the current financial crisis.

Only if the IMF needed more funds, would Sweden “take part in the discussion,” Reinfeldt said in Vienna, after meeting with Austrian Chancellor Werner Faymann and Finance Minister Josef Proell.

The IMF, the European Union and northern European states have already worked together to provide a lifeline to Latvia, said the Swedish leader whose country will take over the rotating EU presidency in July.

Another way to help eastern European economies was for EU states to provide guarantees to their banks, as Sweden has done, thus also helping their subsidiaries in central and eastern Europe, Reinfeldt added.

Sweden plans to inject up to 50 billion kronor ($6.0 billion) into the country’s banks to help boost lending as credit crunch bites.

Fears of exposure to huge debts for western European banks in crisis-hit central and eastern Europe arose last week after regional currencies tumbled against the euro.

“We have an interest in these countries being stable,” said Faymann at a joint press conference.

After a period of economic boom, it is “now also our duty in difficult times to ensure stability,” he added.