EU Commission Proposes Cheaper Funds for Troubled States

EUROPE’S States in economic crisis may soon get temporary access to funding at a lower cost for development, including energy efficiency programmes.

The European Commission unveiled the proposal today (Monday) and wants the release of European Union grants to Greece, Ireland, Portugal, Romania, Latvia and Hungary, all receiving International bailouts, if the countries cover just 5 per cent of the cost for development projects. The aim is intended to spur the embattled countries economic recoveries.

The EU funds can be used for boosting energy efficiency as well as building new infrastructure and making agriculture and fisheries sectors more competitive.

At present, states receiving grants have to pay a minimum of 15 percent of project costs, with the proposal’s reduced percentage for these struggling countries translates into 2.9 million Euros (4.2 million dollars) in savings, according to the European Commission.

Although the funds are earmarked for the six countries, the Commission reckons that the 15 percent level prevents them from launching energy efficiency and growth related projects. The lower 5 percent rate would only remain in place while these countries remain under bailout programmes.

European Commission President Jose Manuel Barroso in a statement, likened the proposal to the US aid programme that helped rebuild Europe after World War II - the Marshall Plan.

'These proposals are an exceptional response to exceptional circumstances. This decision will inject essential funding into national economies, while reducing the pressure for the co-financing of the projects by the national budgets,' Barroso said.

Currently it is still just a proposal, as Member States and the European Parliament have to approve it before it can be auctioned, although the Commission hopes to finalise it by the end of this year.

Picture of European Commission by Tiseb

Monday 1st August 2011

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