EU can help bloc's wobbling economies

"Europe is equipped to help the weakest economies within the EU," he said.

Mr Almunia said however that the EU was already engaged in support for the region.

"We are supporting the economies through the instruments we have in our hands in the EU: ... the structural and cohesion funds, the European Investment Bank lending activities, and we can also mention the European Bank for Reconstruction and Development," he said.

The commissioner also told western European banks that they should re-open the taps on lending by their eastern European subsidiaries.

"The private sector should support their own investment [in eastern Europe]," he said.

Much of eastern Europe is riddled with banks on the brink of credit defaults as a result of sharp currency drops and deep economic declines.

European banks have a financial engagement of some €1.1 trillion in the region, but Austrian financial institutions are particularly exposed, being owed €220 billion - equivalent to around three quarters of the country's GDP - that they fear may not be able to be paid back. Italy, Sweden, the Netherlands, France and Belgium are also among western Europe's big lenders to the east.

Mr Almunia said that funds supplied to western banks would also be passed on to eastern daughter outfits.

"Where governments decided with guidelines provided by the commission to recapitalise banks, I am sure they are also thinking about recapitalising banks that have invested ... in central and eastern European countries," he said.

"Banks that are established either directly or through subsidiaries in these countries are recapitalising their subsidiaries," he added.

Mr Almunia also said that the commission would like EU member states that are able to boost their contribution to the IMF to do so.