EU offers funding to help Greece boost economy

Updated: 2012-03-08 11:19


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BRUSSELS - European Commission has offered funding to help debt-laden Greece stimulate growth and competitiveness, according to a letter from the head of the commission published on Wednesday.

"The commission is ready to support the Greek authorities in taking decisions that can restore confidence and begin the process of revitalizing the Greek economy," European Commission President Jose Manuel Barroso said in the letter sent to the Greek Prime Minister Lucas Papademos on Tuesday.

Barroso said the commission would work with the European Investment Bank (EIB) and some other funds to "unblock" the 650 million euros ($855 million) available for supporting small businesses to provide them much-needed liquidity and risk coverage for rapid use over the next three years.

The EIB President has agreed to a leverage ratio of 2 to 1 as regards liquidity, which means the original funding of 650 million euros can be doubled, he added.

The European Commission has already paid more than 8 billion euros ($10.52 billion) of the 20 billion euros ($26.3 billion) allocated to Greece since 2007 through the EU structural funds, according to the letter.

"We are keen to help your authorities target the remaining funds on stimulating growth and competitiveness," Barroso told Papademos.

Still, Barroso noted that "there are still too many open questions and administrative hurdles to be overcome before the available funds can reach the real economy," though "there is no shortage of funds" for the moment.

"A rapid agreement" in the European Council and Parliament on the "Risk Sharing Instrument" to support critical infrastructure projects is also expected, Barroso said.

The commission proposed to use the European Social Fund and reprogramming funds where necessary to help get young people back to work, through improving training and internship opportunities and other measures.