Eurobank signs loan guarantee deal for Greek small businesses
The European Investment Fund (EIF) signed a deal on Monday to provide Greece's Eurobank with 230 million euros of loan guarantees to support small and medium-sized businesses and help the economy.
The EIF, a unit of the European Investment Bank (EIB), is a main provider of risk financing for small and medium-sized enterprises (SMEs), seeking to spur innovation, economic growth and job creation.
The European Investment Bank is the long-term lending institution of the European Union, owned by its member states.
"The recovery of Greece's economy depends on investment," said Eurobank's Chairman Nick Karamouzis.
After years of recession, Greece has a jobless rate of 23.2 percent – the highest in the 19-country euro zone. Young Greeks, aged 15 to 24 years, are hardest hit with an unemployment rate of 42.7 percent.
EU Migration Commissioner Dimitris Avramopoulos said the financing is part of EU Commission President Jean-Claude Juncker's plan to support growth and jobs in Europe.
"SMEs are the backbone of Greece's economy, we are helping their access to funding so that they can create jobs," Avramopoulos said.
Eurobank, Greece's third largest lender by assets, signed a 100 million euro trade finance deal with the International Finance Corporation (IFC), a unit of the World Bank, in August to boost credit.
EIF Chief Executive Pier Luigi Gilibert said the agreement with Eurobank will facilitate Greek SMEs' access to "affordable financing" through lower interest rates and easier collateral requirements.
In a similar deal with another Greek lender on Monday, the EIB concluded a securitisation transaction with National Bank, helping it raise 300 million euros of medium-term financing to enhance the access of Greek SMEs to funding.