ECONOMY

EIB chips in with 2-bln-euro loan

The European Investment Bank (EIB) will provide the Greek government with 2 billion euros in loans to fund long-term projects, including the construction of a new railway line stretching across the country, it said yesterday. The agreement comes at a time when loan growth in Greece has slowed sharply on lower demand from consumers and businesses while lenders adopt tighter lending practices fearing that customers won’t be able to repay money in the downturn. «It is the largest amount the EIB has provided to Greece,» said EIB Vice President Plutarchos Sakellaris, who signed the deal with Finance Minister Giorgos Papaconstantinou and Economy Minister Louka Katseli in Athens. The loan, which comes with an interest rate of between 2 to 4 percent, will pay for the government’s contribution to infrastructure projects co-funded by the European Union. The duration of the credit line runs for 25 years, including a grace period of up to seven years, and the first 600 million euros will be dispersed immediately. Sakellaris said that half of the amount will fund a planned railway line linking Patra, Athens, Thessaloniki and Promachonas, on the Greek-Bulgarian border. Other projects to be funded include a new cargo terminal at Thriasio, west of Athens, and additional railway link for Piraeus. «The boost comes at the right time to support the growth prospects of the Greek economy, helping to minimize the impact of the economic crisis,» he added. The European Union’s lending bank increased total funding disbursed last year to 79 billion euros, from 58 billion in the previous year.