EU boosts aid to weak members
Source: Agencies |
August 2, 2011, Tuesday
|
Print Edition
Print Edition
THE European Union plans to make it easier for its six most troubled economies to access billions of euros in development funds by lowering the amount of money they have to contribute to projects.
Proposals made yesterday would see the EU's part of the financing of infrastructure and education projects rise to up to 95 percent for Greece, Ireland, Portugal, Romania, Latvia and Hungary.
Traditionally, states have to cover between 15 percent and 50 percent of the costs, a requirement that has kept weak economies from using the funds designated to them.
"We cannot ask for cuts in the budget and at the some time for co-financing for EU projects," said the EU's Commissioner for Regional Policy Johannes Hahn.
The new proposals won't increase the overall amount of money these countries will receive from the EU, but are supposed to make sure a bigger number of growth-enhancing projects actually gets off the ground. European Commission President Jose Manuel Barroso called the proposals "a kind of 'Marshall Plan' for economic recovery," designed to "boost prosperity and competitiveness."
All six countries affected by the proposals have had to seek emergency loans in recent years as investors worried about their economic stability, although Hungary has since been able to regain market access. The rescue programs for Greece, Ireland and Portugal in particular have come under fire for demanding huge spending cuts and painful economic reforms that have further depressed economic growth.
Raising the co-financing rate to 95 percent would give the six countries an extra 2.9 billion euros (US$4 billion) in EU funds in the short term. That money would be drawn from a total fund worth 91 billion euros through 2013, according to figures provided by the European Commission.
But if easier co-financing rules succeed in getting projects going quickly, they could unlock a much larger sum.
Proposals made yesterday would see the EU's part of the financing of infrastructure and education projects rise to up to 95 percent for Greece, Ireland, Portugal, Romania, Latvia and Hungary.
Traditionally, states have to cover between 15 percent and 50 percent of the costs, a requirement that has kept weak economies from using the funds designated to them.
"We cannot ask for cuts in the budget and at the some time for co-financing for EU projects," said the EU's Commissioner for Regional Policy Johannes Hahn.
The new proposals won't increase the overall amount of money these countries will receive from the EU, but are supposed to make sure a bigger number of growth-enhancing projects actually gets off the ground. European Commission President Jose Manuel Barroso called the proposals "a kind of 'Marshall Plan' for economic recovery," designed to "boost prosperity and competitiveness."
All six countries affected by the proposals have had to seek emergency loans in recent years as investors worried about their economic stability, although Hungary has since been able to regain market access. The rescue programs for Greece, Ireland and Portugal in particular have come under fire for demanding huge spending cuts and painful economic reforms that have further depressed economic growth.
Raising the co-financing rate to 95 percent would give the six countries an extra 2.9 billion euros (US$4 billion) in EU funds in the short term. That money would be drawn from a total fund worth 91 billion euros through 2013, according to figures provided by the European Commission.
But if easier co-financing rules succeed in getting projects going quickly, they could unlock a much larger sum.
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