The decision to redirect €21 million worth of Regional Funds is intended to help the country deal with the current socio-economic crisis and ensure a quicker delivery of available investments particularly when it comes to supporting small and medium sized business and the employment of young people.

This revision was requested by Cyprus earlier this year and has been given added political momentum in the last few weeks. The decision will see funds from lesser performing regional policy areas being redirected to where the funds are likely to have more impact for growth and jobs in the shorter term.

Commenting on the reprogramming decision, Commissioner for Regional Policy, Johannes Hahn said: "This decision will help Cyprus to weather this crisis and tackle its economic problems by using EU regional funds in the most effective way possible - in areas that will contribute to the countries efforts to boost growth and competitiveness, particularly that of its SMEs. We are working closely with the Cyprus authorities and are in continuous discussion on how EU regional funds can support the country's efforts to emerge from this crisis."

Some €11m worth of funds will be reallocated to build on projects for SMEs (€8.5m) and for measures to promote youth entrepreneurship (€2.5m). A further €10m will be moved to projectsfor the regeneration of urban and rural areas.

The decision to shift funds from one area to another is mainly due to the deterioration of socio-economic conditions in Cyprus in recent months, but it also aims to compensate for the slower progress of implementation in some areas of investment.

The main modifications are: transfer of €21m from the area "Knowledge Society and Innovation" to the areas of "Productive Environment" and "Regeneration of urban and rural areas"; promotion of promising additional projects mainly in the field of renewable energy and innovation (worth €9m) within the "Knowledge Society and Innovation" area; priority given to some Major Projects so as to include theSewerage System of the Kokkinochoria Complex and the Vertical Road that connects the Limassol Port to the Limassol-Paphos Highway where funds could be used more quickly and effectively.

"Major projects" are ones of which the total investment (VAT included) is above €50 million and thus subject to a specific decision by the European Commission, whereas other types of projects are approved at national or regional levels.

This proposal does not modify the total programme allocation, the EU contribution rate nor the annual budgetary commitments of the programme. Cyprus has been allocated more than €600 million in total cohesion policy funding from 2007-2013.

Source: Cyprus Mail