The European Investment Bank will pump 1.44 billion euros ($1.8 billion) into the struggling private sector in crisis-hit Greece by 2015, the ministers of finance and development said on Saturday. "I believe the accords will be signed in the coming days," said Finance Minister Yannis Stournaras after talks with EIB chairman Werner Hoyer. "We aim to restart, to re-activate the EIB in the private sector as soon as possible."
In a joint statement, the two ministries said the meeting with Hoyer had "resolved pending issues" that had held up the deal for months. A guarantee fund for small and medium businesses, created in March, will be supplied with 600 million euros by next January, the statement said. This sum will increase to 1.0 billion euros by December 2013 and to 1.44 billion by 2015, the ministries said.
The EIB will also help Greece complete a number of highway projects whose construction by private contractors has been suspended in recent months. Greece's private sector has been starved of funds as the country grinds through the fifth year of a recession that has cut off bank loans and even state contract payments.
EIB loans this year had been limited to just 10 million euros, Stournaras said, as Greece plunged into political uncertainty in May, requiring two elections before a coalition government could be formed to continue EU- and IMF-mandated reforms. "The agreement is a vote of confidence in Greece. Besides infrastructure projects and support for small and medium companies, the co-operation will be expanded to facilitate foreign investment and privatisation," said Development Minister Costis Hatzidakis. There was speculation in April that the EIB would seek to insert drachma clauses into its contracts with Greek firms to ward against a possible Greek euro exit. But Stournaras insisted on Saturday that repayment will be in euros, the semi-state Athens News Agency said.
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