Microfinance for unemployed

The commission is proposing microfinancing to provide people who have lost their jobs with small loans to start their own businesses and help existing companies expand.

The loans would be tailored to businesses employing fewer than 10 people, which account for more than 90 per cent of companies in the EU. They would be eligible for up to 25,000 euros each.

“We want to offer a new start to the unemployed through easier access to credit to set up or develop new businesses,” said employment commissioner Vladimír Špidla. “And we want to help small businesses to develop further despite the crisis.”

About 100 million euros in existing EU funds would be reallocated to the scheme. The initial budget could generate more than 500 million euros with help from other financial institutions such as the European Investment Bank.

If approved by EU leaders and lawmakers, the microfinancing could be available as early as next year.