State calls on banks’ help to improve CSF management

Facing pressure from Brussels over reportedly mismanaged community funds, the government yesterday said it intends to enlist the banking sector’s help in drafting out a transparent, fairer and more effective framework for projects targeted at small and medium-sized enterprises (SMEs) under the Third Community Support Framework (CSFIII). Christos Pachtas, deputy finance minister, said the scheme aims to help SMEs in the manufacturing and tourism industries to improve their competitiveness. «The goal is to create a simple, effective and accessible system,» he said. The participation of banks for the first time from the beginning to the end of a project would also ensure greater transparency. Greece is reportedly under pressure from European Commissioner for Regional Policy Michel Barnier to repay funds allocated to projects not eligible for community funding. He has also criticized delays and cost overruns related to projects under the Second Community Support Framework (CSFII). Barnier is due in Athens next month to check on the progress of community-funded projects connected to the 2004 Olympic Games. Greece has nothing to hide, the deputy minister stressed, saying, «We are open to scrutiny from Brussels.» He said delays in some projects were due to adverse court rulings, geographic impediments and unexpected findings of archaelogical remains. Pointing to the gravity of the situation, Pachtas said, «Greece is on a tightrope until 2008.» The new arrangement sets out an advisory and supporting role for banks. They will vet applications, evaluate the proposals and then turn them over to a regional committee of experts who will have the final say. They will also monitor the progress of each project and disburse the funds. The State plans to fork out 144 million euros to help SMEs in the manufacturing industry restructure and upgrade their business, subsidizing from between 35 to 45 percent of their projects. Companies in the poorer regions, such as western Macedonia, Epirus and the islands, will get a bigger grant. SMEs involved in the tourism trade will receive a total of 108 million euros in state subsidies for improving their business. The State will pay a commission of less than 4 percent to banks for their services. Pachtas said reports on the possibility of Greece losing funds from the CSFII were not true. Brussels has disbursed 92 percent of the total allocation to date, with the remaining 8 percent expected to come through in the coming weeks. He said CSFIII projects were also on target, with more than 60 percent of the ventures, totalling 2,101, in progress. Public spending to the end of May came to 21.2 billion euros against the budget of 31.76 billion euros. The inflow of community funds this year amounts to 3.54 billion euros.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.