Greece’s liquidity-starved market is set for a cash boost of some 1.4 billion euros over the next few months after the government Thursday concluded an agreement with the European Investment Bank which had been held up because the lender wanted a clause inserted in the deal in case Athens was forced out of the eurozone.
EIB President Werner Hoyer and Finance Minister Yannis Stournaras sealed the agreement, which will see the bank pump 750 million euros into the Greek market in the form of loans to small and medium-sized firms and for transport, energy and education projects.
The sum will increase to 1 billion euros by the end of next year and 1.44 billion by 2015. Greek enterprises will be able to access the money via three Greek banks, which will be responsible for providing the financing. Stournaras said small business would absorb about 440 million euros from the total package.
“This is an important development that brings money into the real economy at a time when the liquidity crunch has caused suffocation in the market,” said the minister.
“We signal to the Greek and European people that the EIB is here to stay and that we will increase our activities in Greece,” said Hoyer.
The agreement between the two sides had been held up for months after the EIB demanded that a drachma clause be inserted in the contract. Two development ministers, Michalis Chrysochoidis and Anna Diamantopoulou, and members of the caretaker government that was in office earlier this year, including Stournaras himself, had attempted to break the deadlock.
A deal was only reached after Greece agreed to guarantee the loans that the EIB will make as part of the investment package.