The European Parliament backs the measure which propose to help spur economic recovery by speeding up investment and boosting competitiveness with the paying up to 95% of the costs of rural development projects in Greece, Ireland, Portugal, Latvia and Romania.

According to the Parliament, MEPs supported an increase in co-financing rates under the European Agricultural Fund for Rural Development (EAFRD) to ensure that Greece, Ireland, Portugal, Latvia and Romania, which are facing cash-flow problems caused by the current, unprecedented, financial crisis that are hitting their growth prospects and drying up public funding, can continue to implement their projects on the ground.

The Parliament highlights that the overall amount of EU money earmarked for rural development will not change and the temporary measures will not have any impact on the programming period after 2013. The new rules will be limited to the period for which the Member States in question are eligible for EU assistance under the European Financial Stabilisation Mechanism (for euro states) or the Balance of Payments Mechanism (for non-euro states), and it will only apply until the end of 2013.

Similar arrangements for regional development projects funded from EU structural funds were approved by Parliament on 1 December and are due to be discussed by the Council and signed into law this week. With regard to this proposal, the Council is expected to agree formally to it in the coming days.