Brussels - The European Commission on Thursday proposed providing loans of up to 25,000 euros (35,000 dollars) to Europeans who lose their job and want to start a small business. With an initial budget of 100 million euros, which officials hope could leverage at least five times as much, the commission's microfinance facility is to be discussed by EU ministers in the coming weeks.
The proposal was tabled on the day in which new Eurostat figures showed the bloc's unemployment rate climbing to 8.9 per cent in May, meaning nearly 21.5 million people were without a job in the EU.
A typical beneficiary of an EU loan could be a lorry driver who loses his job and wants to become a taximan.
"In the current recession, we want to offer a new start to the unemployed through easier access to credit to set up or develop new businesses. And we want to help small businesses to develop further despite the crisis," said EU Employment Commissioner Vladimir Spidla.
While the loans are to be provided at market rates, the commission could provide interest rate rebates by digging into its social fund facility, Spidla said.
According to commission figures, 99 per cent of start-ups in Europe are micro or small enterprises. Of these, one third are set up by people who are unemployed.
