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Papandreou asks EU to help draft Greek economic recovery plan

Business Materials 1 July 2011 16:50
Greece has asked the European Union for help in drafting an economic recovery plan, which would involve speeding up the disbursement of EU funds already earmarked for the southern Mediterranean country.
Papandreou asks EU to help draft Greek economic recovery plan

Greece has asked the European Union for help in drafting an economic recovery plan, which would involve speeding up the disbursement of EU funds already earmarked for the southern Mediterranean country, DPA reported.

Greek Prime Minister George Papandreou made the request in a letter sent to European Commission President Jose Manuel Barroso that was posted on the Finance Ministry's website on Friday.

Papandreou also asked for the suspension until 2013 of all Greek government contributions to co-financed EU projects.

The letter followed hours after Parliament's approved a 78-billion-euro austerity package amid violent widespread public protest.

"Greece's parliament passed the mid-term fiscal plan and its implementation... in this manner Greece has fulfilled its duty," Papandreou wrote.

He asked for an "acceleration of the absorption" of subsidies destined for infrastructure development, including ports and roads.

"Since our proposals do not imply an increase of the total sum of funding for a country and have the unanimous political support of the member states, they could be implemented soon," Papandreou wrote.

The prime minister stressed that he was not requesting additional EU funding, just the swifter release of subsidies already on the cards.

Together with the provisions of the mid-term fiscal programme, this could "contribute to extricating Greece more quickly from the crisis," Papandreou said.

He also suggested the possible involvement of the European Investbank Bank in major infrastructure projects, support from private investors, the overhaul of programmes aimed at tackling rising unemployment and the contribution of technical know-how from other EU member states.

Many economists still expect Greece to default in the medium-term, since it cannot continue to give all of taxpayers' money to creditors and would have to work on resuscitating the economy.

"The mid-term programme is good but it needs to be supplemented with growth including that EU funds to be funded 100 per cent," said Dimitris Katsikas, a researcher at the Greek think-tank, the Hellenic Foundation for Economic and Foreign Policy.

Earlier this month, the European Union said it could help boost the Greek economy through an early payment of one billion euros in EU funds earmarked for Athens under a plan of reducing economic and social differences in the 27-nation bloc.

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