EIB Chief: Greece Needs A Marshall Plan
The new head of the European Investment Bank has called for a Marshall Plan to help rebuild Greece's economy, and said the EIB will again provide EUR2 billion in loans to the Greek economy this year, German newspaper Handelsblatt reports Wednesday.
"Greece needs a Marshall Plan alongside the unavoidable savings program," EIB President Werner Hoyer told the newspaper, referring to the U.S. aid plan that helped rebuild Europe's shattered economies after World War II. "Only that can succeed in renewing the country's structures from the ground up."
The EIB provided EUR2 billion in loans to Greece's real economy in 2011 and plans to do the same this year, Hoyer said. "Banks need help from outside in order to give loans to companies," and the EIB is "starting a special program for that", he said.
The EIB is also supporting the expansion of Greece's infrastructure. "There are projects that are really crying out for implementation," such as building motorways, Hoyer said.
To increase the chances that such a plan will succeed, highly qualified Greeks based around Europe could be encouraged to return to Greece, while Greeks working at the European Commission could be sent on sabbatical to help implement deep structural reforms, Hoyer said.
However, the process of structural reform in Greece is likely to last one or two decades, Hoyer warned. But it would be an enormous mistake to allow the country to leave the euro zone because speculators would then realize they could force states out, starting a "cascade effect" that could draw in other countries, he said.
Hoyer also said the EIB needs to increase its capital base by between EUR5 billion and EUR10 billion to boost the support it provides for low-growth states and retain its triple-A rating. The European Commission could help by contributing the capital it currently returns to member states, he said.



