Tuesday November 11, 10:52 AM
EIB to present small business funding plan at Ecofin
ATHENS, Nov 11 (Reuters) - The European Investment Bank (EIB) will present an action plan at next month's Ecofin to boost funding for cash-thirsty small businesses as a result of the global credit crunch, its vice president said on Tuesday.
EU leaders present at last month's Paris meeting called on the EIB, the European Union's lending arm, to hasten plans to boost lending to small business to mitigate the economic slowdown and a looming recession.
'EIB will present an action plan at the Ecofin meeting on Dec 2 to confront the crisis and strengthen the European economy, working with the EU Commission,' EIB Vice-President Plutarchos Sakellaris told a conference in Athens.
He said EIB will make 15 billion euros available to small and medium sized businesses (SMEs) in Europe in 2008-9 through commercial bank loans as part of a 30 billion euro funding package up to 2011.
'We are in the midst of a global financial and economic crisis. In these circumstances EIB's role becomes even more important. At times of turbulence, the bank has the capacity to provide coordinated support to Europe's economy via specialised credit tools,' he said.
The European economy has slowed rapidly and is now on the brink of recession, partly because of global financial market turmoil, which has boosted borrowing costs for companies and therefore made investment difficult.
European Union finance ministers, who are governors of the EIB, want the bank to support flagging growth by boosting lending via commercial banks at rates that are lower than those prevalent in financial markets.
The EIB finances the loans from triple A-rated bond issues.
SMEs, which account for an overwhelming majority of jobs and job creation in the 27-nation bloc, are defined as firms which employ no more than 250 people with sales of up to 50 million euros.
In recent years they have created more than 80 percent of all new jobs.
(Reporting by Lefteris Papadimas, Writing by George Georgiopoulos, Editing by Andy Bruce) Keywords: EIB FUNDING/
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