The Government is accelerating these days to expand its requests for European funds from the Next Generation program and, to do so, it is mobilizing the banks, which it wants to involve in the distribution of part of the 84,000 million euros foreseen in credits. Although the banks do not participate in the distribution of the aid received so far, which are entirely non-refundable grants, the Government wants them to do so in the distribution of credits. Look for formulas and allies to speed up a process that is proving to be complex, such as getting the funds to the final recipient.
The intention of the Ministry of Economic Affairs is to present before the end of the year an addendum to the 2021 Recovery, Transformation and Resilience Plan to access not only 7,700 million euros of additional subsidies, but also all available credits, which amount to 84,000 million euros.
Sources from Economic Affairs indicate that this credit item charges interest now that interest rates have begun to rise and financing is becoming more complicated for companies. The loans will have more beneficial conditions and will allow many businesses to better face a 2023 that is difficult in the euro zone.
The Government wants to involve the banks so that they help to channel all the volume of available credits. Banking entities have already collaborated successfully in the articulation of the ICO lines during the pandemic and the objective is to once again use their enormous capillarity to reach interested parties.
For now, the Treasury has held two meetings with the banking associations, both the AEB and the old savings banks, CECA, with the aim of defining the main lines of financing and the type of financial instrument, whether they are loans , guarantees or endorsements.
The parties describe the meetings as "very preliminary" and agree that the type of initiatives that will be financed are still being defined, with special emphasis on everything related to sustainability and digitization. It must also be decided how to calibrate the risk and how eventual defaults will be assumed.
The banks assure that their willingness is to collaborate in the new distribution of resources. The idea is that the credits can be requested until August of next year for projects that have to be executed at the latest in 2026. The money has a long-term repayment period, up to 35 years in some cases.
With the new credits, the Government will exhaust the 160,000 million euros that it has reserved until 2026 in European funds, of the 750,000 million euros committed by the whole program at the European level. Of this amount, there are 360,000 million for repayable loans and another 390,000 million for non-refundable transfers.
The new conversations with the banks come shortly after the agreement to alleviate the rise in Euribor for close to a million mortgagees. After resolving technical issues related to provisions, the main banks have already signed up to the new code, which will come into effect in January and which extends terms, freezes quotas and establishes deficiencies based on the type of client when the mortgage burden exceeds certain thresholds.
This agreement was the third between the Government and the banks, after those referring to rural areas and the financial inclusion of the elderly. In the new negotiation on European funds, the previous formula has been used and once again the AEB and CECA have been chosen as interlocutors for a still inconclusive negotiation.
