(1)

Relations between the Union and the Hashemite Kingdom of Jordan (‘Jordan’) are developing within the framework of the European Neighbourhood Policy (ENP). A Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and Jordan, of the other part (2) (‘the EU-Jordan Association Agreement’), entered into force on 1 May 2002. Bilateral political dialogue and economic cooperation have been further developed within the framework of ENP Action Plans, of which the most recent covers the period 2010-2015. In 2010, the Union granted Jordan ‘Advanced Status’ partnership, which covers a wide area of cooperation between both parties. In 2013 the EU-Jordan Association Agreement was complemented by a Framework Agreement between the Union and Jordan on the general principles for the participation of Jordan in Union programmes, furthering cooperation between the Union and Jordan.

(2)

Jordan’s economy has been significantly affected by domestic events related to the events in the Southern Mediterranean since the end of 2010, known as the ‘Arab Spring’, and by the ongoing regional unrest, in particular in neighbouring Egypt and Syria. In particular, the high inflow of refugees from Syria who have sought refuge in Jordan is having a severe impact on Jordan’s economy. In the context of a much weaker global economic environment, the repeated disruptions to the flow of natural gas from Egypt, which have forced Jordan to replace gas imports from Egypt with more expensive fuels for electricity generation, and the significant financial resources required to provide humanitarian assistance to the refugees from Syria who are present on Jordan’s territory, have resulted in important external and budgetary financial gaps.

(3)

Since the Arab Spring began, the Union has, on various occasions, declared its commitment to supporting Jordan in its economic and political reform process. That commitment was reaffirmed, in December 2012, in the conclusions of the 10th meeting of the Association Council between the Union and Jordan.

(4)

Jordan’s geographical position makes it also a strategic country for stability and security in the Middle East, but equally makes the country particularly vulnerable to external shocks, both in political and economic terms. It is therefore important to provide adequate support to Jordan and to further political and economic dialogue between the Union and Jordan.

(5)

Jordan has embarked on a series of political reforms, most in particular leading to the adoption by the Jordanian Parliament in September 2011 of over 40 constitutional amendments, representing a significant step towards a fully-fledged democratic system. Political and economic support from the Union to Jordan’s reform process is consistent with the Union’s policy towards the Southern Mediterranean region, as set out in the context of the ENP.

(6)

In line with the Joint Declaration by the European Parliament and the Council adopted together with Decision No 778/2013/EU of the European Parliament and of the Council (3), Union macro-financial assistance should be an exceptional financial instrument of untied and undesignated balance-of-payments support, which aims at restoring a beneficiary’s sustainable external finance situation and should underpin the implementation of a policy programme containing strong adjustment and structural reform measures designed to improve the balance of payment position, in particular over the programme period, and reinforce the implementation of relevant agreements and programmes with the Union.

(7)

In August 2012, the Jordanian authorities and the International Monetary Fund (IMF) agreed on a non-precautionary three-year Stand-By-Arrangement (‘IMF programme’) of SDR 1 364 million (Special Drawing Rights) in support of Jordan’s economic adjustment and reform programme. The objectives of the IMF programme are consistent with the purpose of the Union macro-financial assistance, namely to alleviate short-term balance of payment difficulties, and the implementation of strong adjustment measures is consistent with the aim of Union macro-financial assistance.

(8)

The Union has made available EUR 293 million in grants for the period 2011-13 under its regular cooperation programme in support of Jordan’s economic and political reform agenda. In addition, EUR 70 million has been allocated to Jordan in 2012 under the ‘Support for partnership, reforms and inclusive growth’ (SPRING) programme, and EUR 10 million in Union humanitarian aid to support Syrian refugees.

(9)

In December 2012, in view of the worsening economic situation and outlook, Jordan requested Union macro-financial assistance.

(10)

Given that Jordan is a country covered by the ENP, it should be considered to be eligible to receive Union macro-financial assistance.

(11)

Given that there is still a significant residual external financing gap in Jordan’s balance of payments over and above the resources provided by IMF and other multilateral institutions, and despite the implementation of strong economic stabilisation and reform programmes by Jordan, and given the vulnerability of Jordan’s external financial position to exogenous shocks, which requires an appropriate level of the foreign exchange reserves to be maintained, the Union macro-financial assistance to be provided to Jordan (‘the Union’s macro-financial assistance’) is, under the current exceptional circumstances, considered to be an appropriate response to Jordan’s request to support economic stabilisation in conjunction with the IMF programme. The Union’s macro-financial assistance would support the economic stabilisation and the structural reform agenda of Jordan, supplementing resources made available under the IMF’s financial arrangement.

(12)

The Union’s macro-financial assistance should aim to support the restoration of a sustainable external financing situation for Jordan, thereby supporting its economic and social development.

(13)

The determination of the amount of the Union’s macro-financial assistance is based on a complete quantitative assessment of Jordan’s residual external financing needs, and takes into account its capacity to finance itself with its own resources, in particular the international reserves at its disposal. The Union’s macro-financial assistance should complement the programmes and resources provided by the IMF and the World Bank. The determination of the amount of the assistance also takes into account expected financial contributions from multilateral donors and the need to ensure fair burden sharing between the Union and other donors, as well as the pre-existing deployment of the Union’s other external financing instruments in Jordan and the added value of the overall Union involvement.

(14)

The Commission should ensure that the Union’s macro-financial assistance is legally and substantially in line with the key principles, objectives and measures taken within the different areas of external action and other relevant Union policies.

(15)

The Union’s macro-financial assistance should support the Union’s external policy towards Jordan. Commission services and the European External Action Service should work closely together throughout the macro-financial assistance operation in order to coordinate, and to ensure the consistency of, Union external policy.

(16)

The Union’s macro-financial assistance should support Jordan’s commitment to values shared with the Union, including democracy, the rule of law, good governance, respect for human rights, sustainable development and poverty reduction, as well as its commitment to the principles of open, rule-based and fair trade.

(17)

A precondition for granting the Union’s macro-financial assistance should be that Jordan respects effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and guarantees respect for human rights. In addition, the specific objectives of the Union’s macro-financial assistance should strengthen the efficiency, transparency and accountability of the public finance management systems in Jordan and promote structural reforms aimed at supporting sustainable and inclusive growth, employment creation and fiscal consolidation. Both fulfilment of the precondition and the achievement of those objectives should be regularly monitored by the Commission.

(18)

In order to ensure that the Union’s financial interests linked to the Union’s macro-financial assistance are protected efficiently, Jordan should take appropriate measures relating to the prevention of, and fight against, fraud, corruption and any other irregularities linked to the assistance. In addition, provision should be made for the Commission to carry out checks and for the Court of Auditors to carry out audits.

(19)

Release of the Union’s macro-financial assistance is without prejudice to the powers of the European Parliament and the Council.

(20)

The amounts of the provision required for macro-financial assistance should be consistent with the budgetary appropriations provided for in the multiannual financial framework.

(21)

The Union’s macro-financial assistance should be managed by the Commission. In order to ensure that the European Parliament and the Council are able to follow the implementation of this Decision, the Commission should regularly inform them of developments relating to the assistance and provide them with relevant documents.

(22)

In order to ensure uniform conditions for the implementation of this Decision, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (4).

(23)

The Union’s macro-financial assistance should be subject to economic policy conditions, to be laid down in a Memorandum of Understanding. In order to ensure uniform conditions of implementation and for reasons of efficiency, the Commission should be empowered to negotiate such conditions with the Jordanian authorities under the supervision of the committee of representatives of the Member States in accordance with Regulation (EU) No 182/2011. Under that Regulation, the advisory procedure should, as a general rule, apply in all cases other than as provided for in that Regulation. Considering the potentially important impact of assistance of more than EUR 90 million, it is appropriate that the examination procedure be used for operations above that threshold. Considering the amount of the Union’s macro-financial assistance to Jordan, the examination procedure should apply to the adoption of the Memorandum of Understanding, and to any reduction, suspension or cancellation of the assistance,