Prague  - Since headlines began asking whether Eastern Europe is like an "Argentina on the Danube", those of the region's countries that are in better financial shape have contested that grim image.

A flurry of reports describing Eastern Europe as "the eye of the next financial storm" have included the Czech Republic and Poland despite their economies being seen as capable of weathering the downturn with less damage than some of their neighbours.

As the bad news spreads, traders in far-away financial hubs have been shedding the Czech koruna and Polish zloty alongside currencies in region's troubled spots such as Hungary and Latvia.

"The global crisis resembles mad cow disease," the Hospodarske Noviny business daily wrote in a recent opinion piece.

"The whole herds are killed off. Nobody is wasting time with differentiating between the healthy and the ill."

It did not help when Czech Prime Minister Mirek Topolanek managed to confuse the markets and send the koruna tumbling even further.

He quipped at a February 19 economic conference that the Czech Republic may need aid because of region's bad reputation. The traders did not seem to get the joke.

"Everybody has learned a lesson and is averse to risk," said Ales Michl, a macroeconomic analyst with Raiffeisen bank's Czech subsidiary. "Any hint of a problem ... triggers negative sentiment."

On Monday, the Czech and Polish central banks joined Hungarian and Romanian counterparts and intervened in favour of their currencies, but the rhetoric worked only one day.

The export-reliant Czech Republic is not immune to the severe downturn following a drop in demand from Western Europe. But leaders and bankers insist that banks, while sitting on their money, remain healthy.

"We have to fix those problems case by case rather than anticipate huge problems and portray Eastern Europe as one black hole," said Vice-Premier for European Affairs Alexandr Vondra. So far the media have mostly painted the region in sweeping black strokes.

In an article using that question-marked comparison to Argentina, whose economy collapsed in 2001, the Economist erroneously grouped the Czechs with nations that borrowed heavily in foreign currencies.

Such loans had turned into a nightmare for families, for example in Hungary, when the forint began to plunge.

The Czech central bank rushed to correct the mistake, pointing out that Czech banks were never in need of foreign money as they had enough deposits in koruny.

Additionally, Czechs had no motivation to take out loans in Western currencies, as the interest rates at home were low during the time of prosperity.

In addition, efforts to separate the healthy "cows" from the sick prove difficult when the ailing ones demand help for the whole herd.

Hungary joined Austria, whose banks bought heavily into the region, in calling on the European Union to put together a bailout package for Eastern European member states.

Now a meeting of EU's new Eastern members, which precedes the bloc's informal summit on economic crisis in Brussels on Sunday, will reveal whether they can restore a common voice. (dpa)