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Edgy times make for nervous observers and we are all looking eastwards to see if there will be further downward spiral of the banking crisis in Hungary or the Baltics, dragging in Sweden or Austria and perhaps even the rest of us. Given that, at least at the moment, economics seems two-thirds psychology - the more we all write about it, the more likely it is to happen.

One of the reasons the latest snap EU summit was held on a Sunday was because the markets were closed. Nevertheless, Hungary's currency, the forint, fell on Monday by 2.5% and its credit rating was cut.

But I am puzzled by much of the . Many focused on the accurate fact that the EU did not come up with a rescue plan for Eastern Europe and its banks. It's fair enough, and obviously true. But a casual reader could be forgiven for thinking that this was the rejection of a long-awaited plan, a further confirmation that the EU dithers in the face of a crisis, and exceptionally bad news for the East. For me, the main story was the row over protectionism. But, as far as the East goes, I feel only the Pink-un got it right with the rather , just not at once.

The single rescue plan was only suggested by Hungary and got no support from the special meeting of Eastern European countries before the summit. As far as I can tell, it was never seriously on the cards. Of course, the fact that 26 leaders didn't think it was necessary doesn't make them right. I stress my interest in this is not to defend the EU against its critics, but simply to wonder whether this was a failure, or indeed whether saying it was makes it so. For what it's worth, one economist I have just spoken to feels that it sent the wrong signals and that eventually the leaders will pull their fingers out, but only when a meltdown is much closer. "Not good then?" I said, rhetorically. "No, but the world is not a good place." Do you think the leaders should have come up with a gigantic pot of money, or are they best biding their time? How will you feel if Gordon Brown asks the British taxpayer to help bail out Latvian banks?

Just a couple of replies to earlier comments: Thanks to SuffolkBoy2 for such a detailed reply to my tease on protectionism. Freeborn-John, you are again suffering from what I call "toothless Serb syndrome" - reacting to what you think I have written, not what is on the page. In fact I think my analysis in all my recent postings on protectionism have made a similar point to yours - there is a gap between the sort of European solidarity which the leaders of the EU countries are signed up to in the various treaties, and what their citizens expect. Into that gap comes protectionism. You seem to think that if I point this out, it is an argument for federalism. But if you highlight it, it is an argument against the EU. It's an observation about the chasm between the ambitions of the elite and aspirations of the people and you can hang what arguments you like upon it. And the "economic orthodox" I was talking about was not socialism, but free trade.

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