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EU uses Regional Development Fund to guarantee up to €1 billion worth of loans for Greek enterprises

21/03/2012

EU Commissioner for Regional Policy, Johannes Hahn, in Athens on 21 March, added another element to boost growth by launching a new Guarantee Fund for Small and Medium-Sized enterprises (SMEs) for Greece. This new facility, agreed in cooperation with the European Investment Bank (EIB) will help SMEs which have been worst hit by the crisis to access credit, by providing the banks in Greece with sufficient liquidity. This is another step to assist the country in optimizing the use of EU Structural Funds: some €500 million from the European Regional Development Fund (ERDF) will guarantee loans with an expected leverage of €1 billion through EIB loans to SMEs. Banks will act as intermediary bodies.

Commissioner Johannes Hahn commented: "Today's decision is crucial to put the Greek economy back on track and give the country new hope. The European Commission and the European Investment Bank have acted in great cooperation to find tailor made solutions for Greece and secure small businesses financing. This is of crucial importance to turn the wheel around and get business off the ground in Greece".

This initiative comes in addition to a number of financial tools already designed to boost the Greek economy: up to the end of 2015, the total available credits to be injected to SMEs amount to about €4.352 billion including expected leverage (direct grants: €1.972 billion not yet disbursed, funding via the special programme for small companies JEREMIE: €360 million, ETEAN-Entrepreneurship Fund (National Fund for Entrepreneurship and Development): €900 million, ETEAN Guarantee: €160 million, new Guarantee Fund: €500 million).

The European Commission has already created the temporary possibility for Greece to use an increased co-financing rate of up to 95% of EU contribution for the financing of projects with structural funds. Greece is now using this possibility, which has lead to payments of top-ups or advances to the country. This increased co-financing rate does not change the allocation of EU funds to Greece for the funding period of 2007 until 2013, which remains at 20,2 billion Euro. Greece only has to co-finance a lower part itself, to enable a quicker realisation of projects.

 

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