More EU aid for North

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The Independent Online
THE EU is poised to approve more pioneering funds for small and medium-sized businesses in the UK after unveiling a ground-breaking pounds 25m initiative for Merseyside last week.

Up to four more deals covering other parts of northern England, worth up to pounds 10m each, are in the pipeline and could be concluded in the next month. Areas selected include Greater Manchester, Yorkshire and parts of Cheshire and Lancashire.

Brussels is increasingly shifting funding for regional European programmes away from prestige infrastructure projects such as roads towards providing a mixture of equity and loans for small businesses that cannot attract capital from exisiting financial institutions. British banks in particular have been criticised for demanding ruinously short pay-back periods.

"The creation of a Merseyside Special Investment Fund gives the region a regional financial institution that will take a long-term view," said regional policy commisioner Monica Wulf-Mathies. "Small businesses need low interest rates. But even more important, they need a rate fixed through the lifetime of the loan so there are no unpleasant surprises for them."

The EU is giving pounds 16m to the Merseyside fund in the next six years, the rest coming from private-sector financial institutions.