Reduced Govt Co-Financing Rate For EU Funds To Save Romania Up To EUR714M

The states that will benefit from this plan are Greece, Hungary, Ireland, Latvia, Portugal and Romania. The measures "should make a significant contribution to getting some of the EU's most troubled economies back on track," says a press release issued Monday by the Commission.

Current rules say the national government must contribute at least 15% of the cost of an approved project, before the EU pays the difference. Through this plan, the EU's contribution will increase to 95%, if requested by a member state.

The expected maximal impact for the six states is EUR2.9 billion. The plan will save Greece EUR879 million, Romania - EUR714 million, Portugal - EUR629 million, Hungary - EUR308 million, Latvia - EUR255 million and Ireland - EUR98 million.

"These proposals are an exceptional response to exceptional circumstances. Accelerating these funds, combined with the financial assistance programmes, demonstrate the Commission's determination to boost prosperity and competitiveness in the countries mostly hit after the financial crisis - thereby contributing to a kind of 'Marshall Plan' for economic recovery," said Commission president Jose Manuel Barroso, cited in the press release.

The Commission will ask the Council and European Parliament to adopt the proposal, through an urgent procedure, by the end of the year.

"The measure does not represent new or additional funding but it allows an earlier reimbursement of funds already committed under EU cohesion policy, rural development and fisheries," says the EC.

"[The higher contribution] should be accompanied by a prioritisation of projects focusing on growth and employment, such as retraining workers, setting up business clusters or investing in transport infrastructure. In this way level of execution can be increased, absorption augmented and extra money injected into the economy faster," says the Commission.

"[The plan] is an exceptional temporary measure, which ends as soon as the Member States stop receiving support under the financial assistance programmes."

The Commission's proposal concerns financing allotted through the European Regional Development Fund, Cohesion Fund, European Social Fund, European Fisheries Fund and European Agricultural Fund for Rural Development.

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