Fin24

Ministers: Bank to pump €1.4bn into Greece

2012-07-22 13:45

Athens - The European Investment Bank (EIB) will pump around €1.4bn ($1.7bn) by 2015 to fund infrastructure projects in crisis-hit Greece, the ministers of finance and development said on Saturday.

"I believe the accords will be signed in the coming days. We aim to restart, to reactivate the EIB in the private sector as soon as possible," said Finance Minister Yannis Stournaras after talks with EIB chairperson Werner Hoyer.

Greece's private sector has been starved of funds as the country grinds through a five-year recession that has cut off bank loans and even state contract payments.

EIB loans this year had been limited to just €10m, 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 cooperation will be expanded to facilitate foreign investment and privatisation," said Development Minister Costis Hatzidakis, according to the state-run Athens News Agency.

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.