Brussels to assume a more active role in fund absorption

The European Commission will announce measures next month to bolster growth and reduce unemployment in Greece, according to its top envoy to Athens, Horst Reichenbach.

The head of the Task Force for Greece presented on Thursday its quarterly report, saying that the country has taken some positive steps toward absorbing the European Union funds available but much more needs to be done. This suggests that the April measures will not concern the allocation of new funds but how Athens will be able to make optimum use of the existing ones.

Reichenbach said that a total of 14.5 billion euros is at Greece’s disposal, out of which 4 billion can be allocated this year to small and medium-sized enterprises (SMEs): 2 billion euros in grants and the rest in the form of loans from the European Investment Bank.

Nevertheless the report highlights that 4.2 billion euros in subsidies for unfinished projects in Greece is at risk of being lost and that these projects must be completed as soon as possible. Three billion euros of that concerns 872 projects from the 2000-06 funding period, while the remaining 1.2 billion concerns 35 projects, half of which should have finished in 2011 or be completed this year.

The Commission’s April measures are likely to be about improving fund absorption across the economic spectrum, i.e. in labor, health, justice etc. Reichenbach stated that Greece needs the “adjustment of some EU funds for the education and retraining of young people,” as well as tackling unemployment.

He added that structural funds require better targeting and pointed to the lack of credit to SMEs, noting that Greek banks have been unable to channel the funding needed due to problems of their own. He went on to accuse the country’s political system of passing a considerable amount of legislation without actually putting it into practice. 

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