ECONOMY

Projects at risk as funds drop

projects-at-risk-as-funds-drop

The increase in the European Union’s contribution to the subsidized projects for the 2007-13 package from 95 to 100 percent was promoted as a victory by the Alexis Tsipras government, but is actually a failure as it deprives the real economy of precious funds. In reality, the EU’s share increase does mean more subsidies for the country; what it does mean is zero investment from the state, fewer projects and more problems in certain regions.

In simple terms, instead of the EU contributing 95 euros and the state adding another five for a 100-euro project, the subsidy program must now make do with just 95 euros for the project. Therefore, instead of 24 billion euros, the program’s resources are now reduced to 22 billion.

As a result, there will be less investment and several projects face the risk of being canceled or transferred to the next subsidy program, absorbing subsidies that should go toward new growth projects, such as the strengthening of entrepreneurship.

The problem is greater for regions such as Central Greece and Southern Aegean, as according to their respective regional governors, Costas Bakoyiannis and Giorgos Hatzimarkos, all projects under implementation there are now at risk, as the EU subsidy rate was lower than the 95 percent national average, reaching just 50 percent in the case of the Southern Aegean. Those projects’ funding has now been cut from a total of 200.5 million euros to just over 100 million euros.