The European Commission has decided to lower the proportion by which EU-sponsored projects require co-financing to help Greece, Ireland, Portugal, Romania, Latvia and Hungary, which have all benefited from different forms of bailouts in recent years.
Under the proposal, the six countries would be asked to contribute less to projects that they currently co-finance with the European Union, Regional Policy Commissioner Johannes Hahn told the Brussels press yesterday (1 August).
The EU contribution could be increased to a maximum of 95% if requested by one of the countries concerned, he explained. Under EU rules, member countries have to provide at least 15% of the funding of EU-sponsored projects from their own budget.
The Commissioner stressed that the overall EU funding allocated to the six countries remains unchanged, and that the rules for obtaining European money remained as strict as usual for the beneficiaries of the extraordinary measure.
He also made clear that the measure was temporary, and was designed to boost competitiveness.
In a press release, the Commission even referred to “a kind of 'Marshall Plan' for economic recovery” for the countries concerned. But the comparison appears largely unsubstantiated. The post World War II Marshall plan mobilised $13 billion in the context of a US GDP of $258 billion. The equivalent of $13 billion in 1948 amounts to $738 billion when compared to the current US GDP of $14,658 trillion.
By comparison, the maximum impact of the proposed EU measure amounts to only €2.884 billion euro for the six countries concerned.
The common denominator for the six EU countries is that all 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).
Asked by EURACTIV if the criterion chosen was fair enough, as the poorest EU country –Bulgaria – is not covered by the scheme, Hahn said that it was a “good sign” for Bulgaria if the country had been able to avoid any bailout efforts.
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 enable vital projects to get off the ground as soon as possible.