Barbados could receive up to $100 million in EU grant funding

A statement issued following talks between Barbados and EU delegations, noted that the funds would become available once certain macro-economic and public finance criteria were fully met.

It said that BDS$65 million could become available to Barbados this year.

The European Union last year released BBD$28 million for the Barbados Human Resource Development Programme, while another BBD$15 million was provided through the Barbados Renewable Energy Programme, all in the form of non-reimbursable grants.

The EU delegation was led by Ambassador Mikael Barfod, while Finance and Economic Affairs Minister Chris Sinckler led the Barbados team.

“The EU would like you to know that it could assist Barbados in leaving the present crisis behind,” Barfod told Sinckler.

The Barbados government has begun laying off employees as part of a programme to revive the ailing economy and has also indicated that it would not be rushing to fill vacancies within the public service.

The government’s policy has come in for criticism from the trade unions and even one senior minister, Dr. David Estwick, the agriculture minister, saying the government was using the “wrong medicine” to deal with the economic problems facing the island.

The statement said during the meeting Sinckler had also “inquired whether the EU could also assist with the financing of infrastructure projects outside of the traditional grant assistance it provides Barbados”.

The statement quoted Ambassador Barfod as advising that the Freundel Stuart government should seek to access financing from the Caribbean Investment Facility, in addition to EU funds allocated to the Caribbean Community (CARICOM) for regional projects and programmes.

The statement said that the European diplomat had also called for more information on how the government intends to manage its debt in the medium term and that he also wanted to hear more about the package of reform that the government had begun undertaking.

He congratulated Sinckler “on the positive assessment of Barbados” in the World Economic Forum’s 2013-2014 Global Competitiveness report.

Sinckler informed the meeting that most of the revenue raising measures of the restructuring programme would not take effect until next fiscal year.

“The present adjustment exercise will not be the end of the restructuring period since the restructuring will extend to a reform of state entities outside of central government, as the goal is to bring the deficit down below five percent,” Sinckler said.

Sinckler said that the country’s foreign reserves present could cover were 15.2 weeks, boosted by the Credit Suisse loan in December 2013.

He said the foreign component of the debt was currently about six percent of foreign exchange earnings, which was manageable and going forward it would remain below 10.

Sinckler said the larger part of Barbados’ debt is held domestically and with high liquidity in the domestic financial sector, roll over risks are low.

“The two sides agreed to have more regular dialogue that could help resolve budget support issues,” the statement said. 

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