ECONOMY

Cash boost for small businesses

The government and local banks signed a funding agreement with the European Investment Bank for guarantees of 1 billion euros, Regional Development Minister Michalis Chrysochoidis announced on Monday.

The deal provides for the state to offer guarantees of 1 billion euros to the EIB for local lenders to issue loans to very small, small and medium-sized enterprises, medium-capitalization companies and local authorities this year.

The banks, the minister noted, are obliged to provide the whole of the amount from the EIB to enterprises without any reaping any profits, while there is a provision for another billion euros for 2012.

Chrysochoidis also announced two new funding tools to boost young people?s entrepreneurship, adding up to 240 million euros.

Furthermore, he suggested that in the next few days the government will set up a ministerial committee from 10 ministries aimed at drafting a bill that will lift the 30 most important obstacles in entrepreneurship. It must be ready within two months.

The minister stated that the business world is right in protesting about banks, but stressed that banks? operations have been severely hampered by measures introduced as a result of the country?s fiscal problems.