EC increases Middle East Risk Capital Facility by €22 million
The European Commission (EC) has decided to increase by €22 million the Risk Capital Facility for the EU Mediterranean neighbors that benefit from MEDA funding with a view to upgrade their financial sector, making their industry more competitive and supporting privatization.
Countries benefiting from the MEDA program are Algeria, Egypt, Jordan, Lebanon, Morocco, Syria, Tunisia, West Bank and Gaza Strip. Priority will be given to those countries or territories that have already signed an Association Agreement with the EU.
The Risk Capital Facility, managed by the European Investment Bank (EIB), is a key instrument of EU support in enhancing the economic transition and strengthening the development of the private sector of the MEDA countries. This € 22 million will be added to the € 50 million already granted to these countries in 2001 and it is envisaged to grant a further €28 million in 2004.
The implementation of the Risk Capital Project may take place either through reliable and solid local national or sub-regional financial intermediaries including local banks and investment funds or through non-financial companies. Priority will be given to the countries having signed an Association Agreement with the EC and support given to the implementation of a credible program of actions towards opening up the economy of these countries and towards deeper regional and sub-regional co-operation and integration.
The Economic and Financial Partnership chapter of the Barcelona process identifies the creation of a Free Trade Area (FTA) between the EC and the Mediterranean partner countries, secondly, support for economic transition towards this Free Trade Zone and thirdly encouraging investment. In this regard, the Risk Capital Facility project being implemented by the European Investment Bank (EIB) will focus on the objectives of upgrading the financial sector of the partner countries in the Southern Mediterranean and the Middle East, on the objective of raising the competitively of partner countries' enterprise sector and will put emphasis on the objective of privatization.
Mediterranean partners' economies are hampered in the opening up of their economies by various factors including weak international competitivity resulting from past protectionism in the areas of foreign trade and foreign investment, financially vulnerable companies surviving thanks to high protection and domestic financial systems operating outside market-based mechanisms and a dominant sector of state enterprises operating also outside market-based mechanisms. — (menareport.com)
© 2003 Mena Report (www.menareport.com)