Commission gives Greece time to mend CSF ways

The European Commission yesterday threatened to suspend some investment subsidies to Greece as of March if the country does not provide by then adequate proposals for redressing serious past irregularities in the allocation of funds. «Unless by the end of February there is no satisfactory response from Greece about ways of correcting the situation… funds for structural aid projects may be suspended,» spokeswoman Ana-Paula Laissy said in Brussels. «We are not talking about fraud here, but about failure to follow rules which are sometimes complex,» she added. New European Union Regional Aid Commissioner Danuta Hubner complained to Greece in a letter in December that the country often failed to comply with EU-funded project management rules. Hubner is seen as adopting a clearly tougher stance toward Athens than her predecessor, Michel Barnier. However, the issue undoubtedly cannot be seen separately from the intensifying preparations for the negotiations on the allocation of the EU-subsidized Fourth Community Support Framework (CSFIV) investment plan, from which the new members will claim a major portion. Structural fund aid is usually for small and mid-sized projects. It is granted to poorer regions of the 25-member bloc to improve infrastructure and schooling and to boost employment. Assistance for larger projects, such as highways, called cohesion funds, is not under threat, Laissy said. Greece was awarded more than 22 billion euros in structural funds under the CSFIII for the period between 2000 and 2006, including 15.2 billion euros supervised by Commissioner Hubner’s department. Most of the aid has already been allocated but absorption is painfully slow and the government is anxious not to lose allocated funds which are reallocated if not absorbed within two years. CSFIII’s total budget for Greece, which also includes national sources, is about 50 billion euros. Separately, Development Minister Dimitris Sioufas said in Athens yesterday that the absorption rate of CSF’s Competitiveness program (EPAN) for enterprises has almost doubled since March 2004 from 14.8 percent to 26.2 percent. «The result of the acceleration has been that we have managed not lose a single euro, despite the fact that European Union departments estimated in the autumn that we would lose about 200 million euros,» he said. He added that in 2005 Greece has to absorb 600 million for EPAN, which would bring total absorption to 45 percent. So far, about 12,000 firms have been financed through EPAN programs and 80 percent of them are small and mid-sized. A further 12 EPAN programs will be launched this year for firms in the sectors of tourism, research and technology and promoting entrepreneurship among the young and women. (Kathimerini, Reuters)

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