Brussels, 26/01/2015 (Agence Europe) - Spain has given a positive response to the European Commission's wish to use Structural Funds as loans and not just subsidies. €800 million has been earmarked for Spain from European Structural and Investment Funds under the new “SME Initiative”. This will be used as a guarantee to cover at-risk projects.
The first loans lent by the banks to this initiative are expected to be available as early as this summer. These loans are expected to be less expensive because the risks will be partly supported by the contribution from Spain to the Structural Funds, as well as from the European budget and European Investment Bank. This means that in the event of any of the SMEs involved defaulting on their loans, the SME Initiative will partially cover them. The European Commission believes that this leverage will be significant because for every euro invested, 4 euros in loans can go to Spanish SMEs.
The project is part of the Investment Plan for Europe and complements the European Fund for Strategic Investments (EFSI) unveiled by the European Commission at the end of 2014. Vice-President Jyrki Katainen, in charge of growth, welcomed the signing of this SME Initiative by Spain on Monday 26 January and said, “SMEs from Madrid to Barcelona to Bilbao will have easier access to cheaper loans to support them as they invest and grow”. He said that this is great news for the Spanish economy, great news for the European economy and great news for job creation. He pointed out that as part of the new Investment Plan for Europe, member states had been requested to use their EU budget money in a more innovative and intelligent way and he was pleased to indicate that, “Now Spain is doing just that with this SME Initiative”. The European Commissioner for Regional Development, Corina Cretu, is hoping that other countries will follow Spain's example. (MD)