ECONOMY

Commission to increase funding share

Brussels is ready to increase its contribution to Greek infrastructure projects to help restart Greece’s struggling economy, a European Commission spokesman said on Friday.

It followed an agreement between Greek Development Minister Michalis Chrysochoidis and Regional Policy Commissioner Johannes Hahn late on Thursday.

The government has requested that the European Union contribution be increased to 85 percent of total costs instead of the current 79 percent.

Chrysochoidis estimated on Thursday that 14 billion euros in EU funds will be released by the end of 2013. However, the Commission spokesman said on Friday that about 7.7 billion euros could be released in the medium term to restart blocked programs.

Greece has spent only a quarter of a 20-billion-euro package provided as part of the EU’s regional aid program.

The funds, part of the bloc?s 2007-13 budget, remain unspent as Greece is currently unable to pay its contribution to projects which the aid is meant to co-finance.

The Commission said the increase was possible and that the issue would be dealt with in the coming weeks and months.

The EU did ask however that Greece reduce its bureaucratic costs so that the project funds could reach small and medium-sized companies more efficiently.

Chryschoidis revealed that any projects that has been stalled for more than two years will be taken off the EU support framework. The 500 million euros to come from the cancellation of stalled projects will be used to bolster enterprise liquidity in the 2011-12 period.

“We need to do away with the administrative monstrosity that exists in our country,» said Chrysochoidis.

Brussels also asked that Greece reduce land expropriation costs in order to facilitate five highway projects which are to receive funding.

The Greek minister added that 59 major projects, valued at least 50 million euros apiece, will also be unblocked in the next three months, running up a total budget of 5 billion euros.

New Democracy’s shadow minister for development, Costis Hatzidakis, countered that «there is no reason for triumphalism as the EU contribution remains the same while the government’s share is reduced.”