Mike Collier in Riga -
European Commissioner for European Neighbourhood Policy and Enlargement Negotiation Johannes Hahn on May 21 announced new investment of €200mn by Brussels in small businesses in Moldova, Ukraine and Georgia over the next 10 years. In itself that may not seem like a huge amount, but Hahn claimed it would be worth at least €2bn when leveraged alongside money from the European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD).
Speaking at a business forum arranged as part of the Riga Eastern Partnership Summit, Hahn said: “The commission will provide €200mn in the next two years which will unlock more than €2bn... this €200mn will mainly be used to offer loans, things like that [to small and medium-sized enterprises] in order to trigger bigger investments.”
“I'm not overestimating the leverage,” Hahn said, “More than 90% of the money will be used to guarantee loans and things like that... for SMEs via primarily our main partners for such efforts the EBRD and EIB.”
He cited the examples of an unnamed Georgian food processing company, a Moldovan wine producer and Ukrainian water treatment company Ecosoft as examples of companies that had benefitted from similar Commission backing in the past.
“It's really about very concrete assistance, very concrete support,” Hahn said. “It's merit based, about very concrete projects and certainly there's also competition between the countries and financial institutions. It depends on the quality of the projects... it's not that a certain percentage is frontloaded to the individual countries.”
Nevertheless, his announcement did not meet with the acclaim that perhaps might have been expected. Journalists from Moldova, Georgia and Ukraine had been peppering him with questions about the progress of visa free deals and other things along the road to full EU membership – a subject which EU officials are generally trying to dodge by saying there is no rush and individual benchmarks need to be met one at a time.
With no major advancement in sight of the EU membership applications of Moldova, Georgia and Ukraine, the suspicion is that the Commission is attempting to distract attention from their reluctance to accept new members by throwing money at them instead – but it's not working.
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