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Economy

Greek PM Mitsotakis: It Is Time to Further Support the Real Economy

March 6, 2020
ANA

ATHENS – Prime Minister Kyriakos Mitsotakis and the Vice President of the European Investment Bank (EIB), Andrew Mc Dowell, on Friday signed a significant agreement on setting up an SMEs loan guarantee fund, as well an agreement to provide 200 million euros to support Greece’s efforts to tackle the migration problem.

Based on the agreement, investment loans and working capital loans will be provided to small and medium-sized enterprises. The European Investment Fund (EIF) will be the manager of the fund.

The EIF will proceed with the activation of the selection procedures for the banks that will participate in the guarantee fund, from which the loans will be disbursed. It is emphasised that the EIF will act as guarantor for up to 80 pct of the loans. The guarantee fund will allocate 100,000,000 euros from NSRF funds, which translate into over 500,000,000 euros in new SME loans.

The prime minister spoke of “a very important day for the real economy, an important day especially for small and medium-sized enterprises,” noting that it was time to further support the real economy.

He also said that the “new fund will support the banks with approximately half a billion euros, so that they – in turn – can immediately allocate them to new development plans. That means that in 90 days from tomorrow, credit institutions will be able to finance companies and new investments, virtually without risk. Because this will now be guaranteed by the European Bank. Therefore significant new liquidity will be injected into the market.”

He also added that “businesses that sought financing and often found closed doors because of the high guarantees demanded by banks will now be able to gain access to it. And so new business plans can get started quickly, bringing new jobs.”

The EIB vice president, thanking the Greek prime minister, stressed that he considered it a privilege “to sign this agreement for a new financial initiative for small businesses,” and added:

“This is a 100-million mandate from the Greek government to the European Investment Fund, a subsidiary of the European Investment Bank, which aims to improve the financing conditions for small and medium-sized enterprises mainly, with long-term guarantees and through the provision of capital financing. And this order from the Development and Investment Ministry to the European Investment Fund will unlock 500 million euros in new funding for small and medium-sized enterprises in Greece in the coming years. This will be achieved through a guarantee mechanism, making it more attractive and profitable for Greek commercial banks to provide attractive financing to SMEs.”

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