The Greek government will try to use the Investment Plan for Europe in order to boost cash-strapped small and medium enterprises. EURACTIV Greece reports.
In Greece, so-called “red” loans have exceeded €100 billion, representing 10% of all non-performing loans at EU level (€1.1 trillion).
Of these, 68% belong to small and medium-sized enterprises (SMEs). At the same time, the European Commission, through the Investment Plan for Europe (dubbed the Juncker Plan) is expected to mobilise more than €3 billion of investment in Greece, some of which will be related to the financing of SMEs.
A new plan
Speaking at a conference yesterday (27 April) in Athens, EU Commissioner for Immigration, Home Affairs and Citizenship Dimitris Avramopoulos stressed, “Facilitating access to finance for SMEs is a key element of the Commission’s strategy to boost employment and economic growth in Greece and Europe as a whole.”
Since the beginning of the crisis, Greece’s GDP has fallen from €242 billion to €175 billion, representing a 27% decrease compared to 2003 levels. In addition, the investment rate has shrunk by 65%, returning to its 1996 level.
According to the EU executive, the activities currently approved in Greece under the Junker Plan have been earmarked a total of €1 billion, of which €195 million is allocated for the financing of 3,540 SMEs.
In the meantime, the European Investment Fund (EIF), which aims to support European SMEs by facilitating their access to finance, has signed four contracts with Alpha Bank and Piraeus Bank, through which €420 million will be channeled to more than 2,000 (SMEs) across the country.
The EIF’s Chief Executive Pier Luigi Gilibert said that within less than a year, the European Investment Fund will allow the Hellenic Fund for Entrepreneurship and Development to support a portfolio of loans to Greek companies, worth over €1 billion.
Regarding the Greek government’s initiatives, Deputy Minister of Economy and Development Alexis Haritsis highlighted the creation of three new funds for the financing of SMEs.
Speeding up procedures
However, the Commission has repeatedly called on the Greek government to speed up the procedures for financing SMEs but also to intensify its cooperation with Brussels.
European Commission Vice-President Jyrki Katainen recently expressed his concern about the delay in setting up a platform in Greece aimed at providing long-term loans to small and medium-sized companies.
Particularly when it comes to the financing of innovative sectors of the economy, Greece has the lowest absorption rates for European funds.
Priority to the social dimension
According to Secretary-General for Public Investments Panagiotis Korkolis, the Greek government plans to face this challenge by enhancing local governance.
“We encourage municipalities to get loans from the Deposits and Loans Fund on favorable terms, a programme which is supported by the European Investment Bank, and we consult them when they apply for European programmes.”
Across Europe, the Juncker Plan has already mobilised more than €183 billion in investment, and it is estimated that 425,000 SMEs will benefit.
“Yesterday, in the College of Commissioners, we adopted the package on the European Social Rights Pillar. Europe will succeed as an economic and global power only if it succeeds in its social dimension,” Avramopoulos commented.
“A Europe without a social dimension is not Europe,” he concluded.