EU macro-financial assistance to non-EU countries in 2016

 

SUMMARY OF:

Report (COM(2017) 321 final) — EU macro-financial assistance to non-EU countries in 2016

Article 209 Treaty on the Functioning of the European Union

Article 212 Treaty on the Functioning of the European Union

WHAT IS THE AIM OF THE REPORT?

• The report provides details of EU macro-financial assistance to Georgia, Jordan, the Kyrgyz Republic, Moldova, Tunisia and Ukraine in 2016 and into 2017. These countries were facing balance of payments* crises. The assistance was designed to help them restore macroeconomic and financial stability.
• Articles 209 and 212 of the Treaty on the Functioning of the European Union provide the legal bases for the EU to provide economic, financial and technical cooperation to non-EU countries.
• The EU also provides aid to non-euro-area countries with external financing difficulties.

KEY POINTS

Macro-financial assistance (MFA):

• is available for candidate and potential candidate countries and those in the European neighbourhood or, exceptionally, to other countries that are politically, economically and geographically close to the EU;
• supports recipient countries’ balance of payments;
• complements an International Monetary Fund adjustment and reform programme;
• consists of either loans (repayable to the lender) or grants (non-repayable);
• requires beneficiary countries to respect democracy, the rule of law and human rights;
• is released in stages according to the progress made in implementing reforms linked to a country’s long-term economic sustainability.

In 2016, the EU gave the following MFA:

• Georgia: €13 million (grants) and €10 million (loans);
• Jordan: €200 million (loans);
• Kyrgyz Republic: €5 million (grants) and €10 million (loans);
• Moldova: €40 million (grants) and €60 (loans);
• Tunisia: €500 million (loans);
• Ukraine: €600 million (loans).

BACKGROUND

Since 1990, the EU has implemented 26 MFA programmes with a total value of over €10 billion. The smallest was for Moldova (€15 million), the largest for Ukraine (€1.8 billion)

As part of the mid-term review of the 2014-2020 Multiannual Financial Framework, the Commission proposed enhancing the annual lending capacity of the MFA. This increase would be from €500 million to €2000 million and would be achieved by increasing the provisioning of the Guarantee Fund for External Actions.

For more information, see:

• Macro-financial assistance to non-EU partner countries (European Commission).

KEY TERMS

MAIN DOCUMENT

Report from the Commission to the European Parliament and the Council on the implementation of macro-financial assistance to third countries in 2016 (COM(2017) 321 final, 16.6.2017)

Consolidated version of the Treaty on the Functioning of the European Union — Part Five — The Union’s External Action — Title III — Cooperation with third countries and humanitarian aid — Chapter 1 — Development cooperation — Article 209 (ex Article 179 TEC) (OJ C 202, 7.6.2016, p. 141)

Consolidated version of the Treaty on the Functioning of the European Union — Part Five — The Union’s External Action — Title III —Cooperation with third countries and humanitarian aid — Chapter 2 — Economic, financial and technical cooperation with third countries — Article 212 (ex Article 181a TEC) (OJ C 202, 7.6.2016, p. 142)

RELATED DOCUMENTS

Commission Staff Working Document — Background Analysis per beneficiary country — Accompanying the document — Report from the Commission to the European Parliament and the Council on the implementation of macro-financial assistance to third countries in 2016 (SWD(2017) 233 final, 16.6.2017)

last update 07.12.2017