The European Commission agreed Monday to measures that should make a significant contribution to getting some of the EU’s most troubled economies back on track.
Under the proposal, six countries would be asked to contribute less to projects that they currently co-finance with the European Union. The Commission makes available for Greece, Ireland, Portugal, Romania, Latvia and Hungary, supplementary EU co financing, vital for growth and competitiveness-boosting projects in each one of these countries.
As a result, they will have to find less national match-funding at a time when their domestic budgets are under considerable pressure and therefore programmes that have not been executed so far for lack of national funding may be launched and inject fresh money in the economy.
The President of the European Commission José Manuel Barroso stated, “These proposals are an exceptional response to exceptional circumstances. Accelerating these funds, combined with the financial assistance programmes, demonstrate the Commission’s determination to boost prosperity and competitiveness in the countries mostly hit after the financial crisis – thereby contributing to a kind of ‘Marshall Plan’ for economic recovery. This decision will inject essential funding into national economies, while reducing the pressure for the co-financing of the projects by the national budgets. I now call on the European Parliament and the Council to urgently approve the decision, in order to get money on the ground by early next year.”
The measure does not represent new or additional funding but it allows an earlier reimbursement of funds already committed under EU cohesion policy, rural development and fisheries. The EU contribution would be increased to a maximum of 95% if requested by a Member State concerned. This should be accompanied by a prioritisation of projects focusing on growth and employment, such as retraining workers, setting up business clusters or investing in transport infrastructure. In this way level of execution can be increased, absorption augmented and extra money injected into the economy faster.
It concerns Member States that have been most affected by the crisis and have received financial support under a programme from the Balance of Payments mechanism for countries not in the Euro area (Romania, Latvia and Hungary) or from the European Financial Stabilisation Mechanism for countries in the Euro area (Greece, Ireland and Portugal).
The Commission will request that the Council and the European Parliament adopt the proposal in a fast-track legislative procedure by the end of 2011 to allow for the vital projects to get of the ground as soon as possible.
The top-up is an exceptional temporary measure, which ends as soon as the Member States stop receiving support under the financial assistance programmes.
To help with the absorption of the funds, the Commission is cooperating with the Member States concerned to remove bottlenecks, strengthen their administrative capacity and accelerate implementation and spending on the ground. In the specific case of Greece, the Commission has established a Task Force that will help it to implement the measures foreseen in the economic adjustment programme and take all necessary steps to ensure a quicker take-up of EU funds.