By Christina Vasilaki (@christiva), TPP correspondent in Brussels

European Commissioner for Regional Policy Johannes Hahn signed on Monday the co-financing decisions for Greece's major motorway projects. Following the positive vote in the Greek Parliament, the EC’s approval of these projects is expected to stimulate development in the crisis-hit country.

In 2007, two years before the crisis struck, Greece signed concessions for local and foreign investors including Germany's Hochtief and France's Vinci to build four highways.

The project – financed mainly through bank loans, toll revenues, private investors and EU structural funds – had been frozen since 2010, as a result of the crisis, because of the sudden drop in traffic and the expected toll income as well as the reluctance of banks to give loans.

“These projects and their abrupt interruption were visible casualties of the crisis in Greece. Their resumption and the fact that the European Commission and several European companies are again prepared to invest in them, is a sign of growing confidence in Greece's recovery,” he told journalists in a presser.
While answering to a journalist’s question, Commissioner Hahn said that the project should be completed by the end of 2015. “This is certainly ambitious but also realistic, otherwise we wouldn’t have approved it,” he commented. 

The EU co-financing of up to € 2.97 billion for the 4 projects is part of a total investment cost of €4.6bn. The Commission also found that the State funding is necessary and proportionate as it does not go beyond the financing gap that cannot be covered by market forces alone, while ensuring that construction works resume and that the concessionaires and banks contribute their part of the financing.

The concessioners are Greek constructors as well as European companies from several member states, and have recently signed the recast of the project. In addition to the EIB, around 40 Greek and international banks are financially involved.

Construction has been one of the main pillars of the Greek economy but the six-year recession has hit the sector hard, with half its jobs lost since 2008 when building activity had hit a peak.

According to the Greek government, it is a bill, which will create 20,000 new jobs and boost the country's GDP by 1.5 percent in the next three years, playing a crucial role in revitalising the Greek economy. The European Commission expects that “more than 6,000 jobs will be created during the building of the motorways”. After the completion of the works around 1,700 people will be employed in managing them.

(First published in New Europe, Dec. 17)