EU eases rules on structural funds for Greece, others

The European Commission proposed on Monday boosting the EU's contribution to jointly financed development projects for the euro zone's bailout recipients, offering them hundreds of millions of euros of additional funding.
The EU executive said it wanted to increase the level of EU funding of projects in Greece, Ireland and Portugal, as well as in Romania, Latvia and Hungary, to help boost growth in those countries.
It proposed raising the EU's co-financing rate on various structural projects to 95 percent from 85 percent, meaning the recipient countries would only have to provide one twentieth of the funding.
The change would give Greece, which is struggling to emerge from recession to be able to repay its huge debts, an additional 879 mln euros that the EU would provide, rather than the Greek government, in projects financing.
For Portugal it would be 629 mln, for Ireland 98 mln, for Hungary 308 mln, Romania 714 mln and for Latvia 255 mln.
The total amount of money from the EU's structural funds to these countries in the period to 2013 would not increase, but their governments would need to contribute less cash of their own to get the remainder of the cost of the project from the EU.
Greece has received just 4.9 bln of 20.2 bln euros of EU development funds earmarked for it from 2007 to 2013 and the European Union sees the accelerated use of the undisbursed money as a way to help boost growth.
"These proposals are an exceptional response to exceptional circumstances," European Commission President Jose Manuel Barroso said in a statement.
The choice of the countries eligible for the higher co-financing was determined by the participation of Greece, Ireland and Portugal in emergency loan programmes from the EU's European Financial Stability Mechanism.
For Hungary, Latvia and Romania, it was their use of the EU's balance of payments loan facility.
The Commission proposal has to be approved by EU ministers and the European parliament to enter into force. The Commission hopes this would happen by the end of this year.
It said projects that should get priority would focus on retraining workers, setting up business clusters or investing in transport infrastructure.