Greek banks are dependent on the cash ECB for surviving as well as unwilling to finance any company but the biggest companies. EIB has been forced to step into contravene as the EU’s long term investment weapon.
Yannis Stournaras said, “The EIB hesitated for months, worried about getting too exposed to Greece — which has not yet escaped the risk of a chaotic default that might force it to abandon the euro. EIB financing for Greek projects had dried up to a mere 10 million euros this year.”
He has also said,” The EIB will re-activate its engagement in Greece as soon as possible.” The development minister of Greece, Costis Hatzidakis told, “It seems there can also be good news in this country.”
Athens is desperate in finding any way to get going its wounded economy because it is going through its 5th recession year. EU and IMF led “bailout” over the previous 2 years into the long and deep slouch from the World War II.
Costis Hatzidakis has told, “The EIB will disburse the loans over the next three years to small and medium-sized enterprises, using Greek banks as intermediaries. The EIB will also help Greece push ahead with road construction, foreign investment and privatization projects.”
The Gross Domestic Product has fall from post world war by 6.9 percent at the previous year as well as the investment has also fall about twenty percent. The economy is probable to indenture by a 5th in 2008 to 2012.
When the EIB taps the capital markets, they got top terms for raising funds with its AAA rating. The EIB has given more than 700 million Euros to finance the largest Greek Energy Companies at this time.
To help to boost the economy of Greece, the EU has raised the share of giving finance in many co-financed projects of EU. It will also help the Athens economy to ensure the efficient use of the funds of EU.
Greece has been financed with twenty billion Euros from the structural fund of EU for the time of 2007 to 2013. But its has only used 8 billion so far because of its red tape and for being unable to give sufficient funds to match up the EU grants for the project.