CSF partial extension approved

The government received the green light from Brussels to extend its projects under the Third Community Support Framework (CSF III) for the four fire-stricken areas of Greece by one more year. Economy and Finance Minister Giorgos Alogoskoufis and his deputy, Yiannis Papathanassiou, announced yesterday that the above deal, agreed to on the political level, has been ratified through a letter sent by European Commissioner for Regional Policy Danuta Huebner. The Commission’s acceptance of the Greek request for the extension of the third framework’s period by an additional year (until 2009 instead of 2008) covers at present only the four regional programs – the Peloponnese, Attica, and Western and Central Greece. However, Greece will try next month to gain permission to apply this extension to the whole of the country, while projects covered by CSF III are also fully under way. The resources for all four regions do not exceed -4 billion, against a total of -32 billion in CSF III. Given that the absorption rate of the funds today comes to 69 percent, the funds not to be allocated come to a staggering 11.5 billion euros and if the extension does not cover other projects, there is a clear risk of Greece losing that money. The problem of the timely absorption of resources focuses mainly on specific projects and actions, as the European Union does not allow the transfer of resources from project to project. Therefore, even though many contracts have been signed, full absorption of the funding is no certainty. Even if the contracts signed are fully implemented, there are many projects that, just 14 months shy of the end of 2008, are practically at a standstill. There also are specific programs such as that for the environment whose absorption rate is utterly disappointing. Alogoskoufis and Papathanassiou stated yesterday that the Greek demand for an extension must be backed by proof showing that the cause of the delays to the smooth execution of the projects was the destructive forest fires. They implied that the EU sounded very strict and will not tolerate petty excuses or hand out blank checks. The Greek effort in the coming weeks will focus on linking as much as possible the devastation of the fires with specific projects to seek one more year. In the application Athens will send to Brussels on November 11 is an estimate of the damage caused by the fires last August, amounting to -2 billion, while the funding by the Solidarity Fund of the EU is calculated at -100 million. Alogoskoufis suggested that the solidarity resources are no blank check either, and the selection of spending priorities is related only to the funding of infrastructure projects.