ECONOMY

PM asks EIB chief if EU subsidies can guarantee loans to SMEs

On the sidelines of a European Union summit in Brussels, Prime Minister Antonis Samaras asked Werner Hoyer, President of the European Investment Bank, whether EU subsidies already approved for Greece could be used as guarantees for loans from the EIB to small and medium-sized businesses, Kathimerini has learned.

The aim would be to «leverage» the funds five or even tenfold, Samaras reportedly said during talks with Hoyer and European Central Bank President Mario Draghi.

The two bankers reportedly appeared positively disposed toward the proposal, according to government sources.

Addressing his European counterparts at the summit, which was focused on the problem of growing unemployment, Samaras emphasized that the double scourge of joblessness and a lack of market liquidity in Greece had to be tackled in new

ways.

According to a draft of the summit’s conclusions seen by Kathimerini, European leaders are to invite the EIB to accelerate procedures for the provision of 150 billion euros in the form of loans to European economies over the next two years. Of these funds, 100 billion euros would go toward funding SMEs. The summit also decided to bring forward the release of some 6 billion euros from a special fund for fighting youth unemployment to the beginning of next year. Greece is already preparing programs to be inducted to the fund, government sources said.

As regards liquidity, Greece reportedly has high hopes for a national investment fund being set up by the end of this year. The state is to contribute 350 million euros to this fund while a significant contribution is expected from the EIB. For liquidity to really return to the market however, Finance Ministry source said, deposits must return to Greek banks.

In a related development, government sources in Brussels vehemently rebuffed reports according to which EU finance ministers “left a window open” for a future haircut to guaranteed bank deposits, below 100,000 euros. The sources said that deposits in Greek banks were absolutely safe as the Greek banking system is currently among the most fully recapitalized in the world.

Meanwhile a meeting between Cyprus President Nikos Anastasiades and German Chancellor Angela Merkel in Brussels was said to have been cordial and constructive with diplomatic sources indicating that some kind of relief was in store for Nicosia.