Quotes of the Day

One of the qualities that helped eastern Europeans survive more than four decades of communist rule was a keen sense of irony. The sentiment was on show even as the old system of central control began to unravel and democracy and capitalism rushed in. The summer and fall of 1989 were full of passionate protestors and revolutionary honesty. But the millions of people who ripped open the Iron Curtain generally did so with an eyebrow cocked at what was replacing their decayed regimes. In the street markets of Warsaw and Prague in those early years of freedom, the symbols of communism — badges, pins, posters — were sold off, their proceeds helping folk survive in the wild and freewheeling free market. But there was also a knowing embrace of the absurdity of it all. A popular Polish cartoon showed a man clutching a Polish flag stepping out of the jaws of a vicious-looking fish labeled Socjalizm and straight into the open mouth of an equally angry-looking fish labeled Kapitalizm.

In the 20 years since, capitalism has transformed the former Soviet vassals. The transition was not always easy. "Shock therapy," slashed budgets and the privatization of state factories and firms stoked corruption and left millions temporarily worse off. But with political stability and reforms (most of them tied to European Union membership), the region went on to enjoy more than a decade of rollicking growth, massive foreign direct investment and steady employment.

In the past few months, though, Kapitalizm's jaws have snapped shut. The global credit crunch has hit the economies of Eastern Europe hard. In Hungary and Latvia the International Monetary Fund has stepped in with emergency aid. (Latvia's government collapsed anyway.) Currencies have crashed, leading the European Central Bank to help Hungarians and Poles keep paying their foreign currency-denominated mortgages by pumping in euros. The fear now is that the region's banks could collapse, especially if Western banks yank credit lines to eastern subsidiaries. Such a move would be counterproductive. Western banks, particularly in places such as Austria, Belgium and Sweden, have huge exposure to emerging Europe's economies. If banks there crash, it could trigger a financial domino effect that ends up hurting everybody.

To avoid that, Hungarian Prime Minister Ferenc Gyurcsány wants $230 billion in aid for Eastern members hardest hit by the crisis, and fast-track membership to the eurozone, the club of nations that uses Europe's common currency. Without help, Gyurcsány says, there is likely to be social and political unrest and a new economic Iron Curtain across Europe.

At a summit in Brussels on March 1, German Chancellor Angela Merkel rejected the call for a mass bailout. Luxembourg Prime Minister Jean-Claude Juncker, who chairs meetings of the eurozone's finance ministers, dismissed the idea of relaxing the entry criteria to the euro. And French President Nicolas Sarkozy, who just a few weeks ago raised the specter of a return to protectionism when he suggested that French carmakers should close their factories in the East and move home, accused Eastern Europe of putting the entire E.U. at risk.

The truth is, Western Europe is already helping and will doubtless help more. But the squabbling and divisions within the E.U. are unfortunate. At this moment of grave crisis Europe should be pulling together, not behaving as if it might fall apart.

There are two main reasons for regret — one practical and one symbolic. The practical point is best made by the phrase: the West made them do it. Yes, some of the countries on the brink of collapse have brought disaster on themselves. Places such as Latvia and Bulgaria have run massive current-account deficits and are now paying the price. But the ability to borrow and spend so much comes, in part, because the countries had opened up their capital accounts and sold off their banks to Western Europe at the E.U.'s urging. Financial liberalization and free trade were mantras recited by the E.U. (and others) as the Eastern states readied to join. The policies work. But as Katinka Barysch of the Centre for European Reform in London wrote recently, they have also "left the region exceptionally vulnerable in the downturn." Populist Eastern politicians may now use the crisis, and the perceived lack of Western help, to roll back reforms.

That's where the second, symbolic, point comes in. Irony can only get you so far. The greatest light during communism's darkest days was the promise of a united Europe, a continent undivided. Twenty years after the most visible of the divisions was torn down, there's a growing sense that it's back to every man for himself. 
 As Europe prepares to commemorate 1989, it's worth 
 recalling what the struggle was for.

With reporting by Leo Cendrowicz / Brussels

• SIMON ROBINSON
• The fall of the Wall reunited Europe. The financial crisis is dividing it again