The European Investment Bank (EIB) has signed a €75mn agreement with Italian bank Intesa Sanpaolo to boost trade flows between Italy and Greece.

Intesa Sanpaolo joins as a confirming bank for the EIB’s up to €500mn trade finance facility in Greece. The facility’s other confirming banks include Citi, HSBC and Commerzbank.

The facility supports the cross-border trading activities of Greek SMEs and mid-caps, providing EIB’s guarantee on a portfolio of LC, letter of guarantee, and other trade finance instruments. The EIB hopes to alleviate the working capital constraints of these companies, increase access to trade finance and encourage an export-led recovery in the country.

In a statement, head of Intesa Sanpaolo’s global banking and transaction directorate Stephen Stangoni says: “I am convinced that this instrument will provide additional support to Italian companies exporting to Greece.”

EIB’s trade finance facility was set up in June 2013 to support Greek companies with a short-term instrument for international trade.

“Greece needs trade finance in order to pursue export-led growth for its recovery potential,” says EIB vice-president Mihai Tanasescu.

“Under the innovative trade finance facility the EIB will play a critical role in mitigating the risk perception of commercial banks in the country,” he adds.