The European Union is keen on compensating for the series of cuts to bailed-out countries; several weeks ago it proposed plans to stimulate growth and invest in foreign companies. Yesterday, the EU directors finally shored up this goal.
They drafted an initiative directed at accelerating money toward structural funds corresponding to 2007-2013. The funds will attempt to integrate economies on the Old Continent and rely on co-financing.
In addition to Greece, Ireland and Portugal, the measures will benefit the trio of countries who were also affected by the crisis and recipients of aid from the EU: Hungary, Romania and Lithuania. According to the EU?s proposal, these nations should remit only 5% of the money designated to the projects; up to now they have had to submit between 15% and 50%. The change would save these countries close to 2.9 billion euros in co-financing costs.
Superintendent of regional policy, Johannes Hahn, explains that lowering their obligations is conceived of as a temporary initiative and would be confined to funds related to political cohesion, fishing and rural development. Athens was put at the top of the list of countries most in need. Their payments have been reduced by 879 million euros, followed by Bucharest (714 million), Lisbon (629 million), Budapest (308 million), Riga (255 million) and Dublin (98 million). In fact, the EU hopes that the initiative will galvanize new projects. Those that were frozen during the crisis will be taken up again in order to stimulate GDP and generate employment.
At this point, the European Parliament must second the EU?s proposal. Hahn urged governments to also approve the initiative before the end of 2011. Once approved, he will formally ask the six beneficiaries for their aid, which should equal 95% of the co-financing.
