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Tuesday, April 17, 2012

The European Parliament wish to encourage private funding to finance EU projects

In Europe, banks are more and more reluctant to grant loans, and companies also reduce investment in times of crisis. However, European projet cannot exist without private fundings, which are the compulsory co-financing in EU grant-funded projects. On the 18th  of April, a debate will take place at the Parliament to change the rules about this problem.

On Thursday they will vote on the report by Polish Christian-Democrat Danuta Hübner, who is responsible for steering the proposal through Parliament.

Aim of the proposal

The proposal is about making sure that member states receiving EU aid because of their financial instability (Greece, Ireland, Portugal and Romania) are able to continue with EU-funded projects. These projects, which cover anything from motorways to strategic infrastructure, are needed to support growth.

How will it be done? 

Part of the allocated EU money could be used as loans and guarantees to the private sector to encourage participation, which would allow the project to go ahead. This is also known as risk-sharing instruments.

However, this would only be an exceptional and temporary measure. Structural and cohesion funds for EU projects cannot normally be used in this way as it would constitute state aid to the private sector, which EU law prohibits.

Source  Press room - European Parliament

More information  DG for Regional Policy - Inforegio

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