1999D0733 — EN — 10.12.2001 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCILDECISION
of8November1999
providing supplementary macro-financial assistance to the former Yugoslav Republic of Mace-
donia
(1999/733/EC)
(OJ L 294, 16.11.1999, p. 31)
Amended by:
Official Journal
No page date
►M1Council Decision 2001/900/EC of 10 December 2001 L 334 29 18.12.2001
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COUNCILDECISION
of8November1999
providing supplementary macro-financial assistance to the former
YugoslavRepublicofMacedonia
(1999/733/EC)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and
in particular Article 308 thereof,
Having regard to the proposal of the Commission(1),
Having regard to the opinion of the European Parliament(2),
Whereas:
(1)The Commission consulted the Economic and Financial
Committee before submitting its proposal;
(2)The former Yugoslav Republic of Macedonia is undertaking
fundamental economic reforms and is making substantial effortsto establisha well-functioning market economy witha view toincreasing employment and living standards;
(3)The former Yugoslav Republic of Macedonia has suffered verylarge economic costs as a direct consequence of the conflict inKosovo and has made, despite severe social and economicstrains, exceptional efforts to host a high number of refugees;
(4)The former Yugoslav Republic of Macedonia and the EuropeanCommunity have signed a Cooperation Agreement(
3) which
entered into force on 1 January 1998;
(5)The Council, on 26 April 1999, has welcomed the prospect of a
feasibility study towards upgrading the contractual relationsbetween the European Community and the former YugoslavRepublic of Macedonia;
(6)The former Yugoslav Republic of Macedonia has reached apreliminary agreement withth e International Monetary Fund(IMF) on an arrangement under the Compensatory and Contin-gency Financing Facility and discussions are well advancedbetween the two parties on a stand-by arrangement (SBA) insupport of the authorities' adjustment and reform programme;
(7)The World Bank is preparing a new Financial and EnterpriseStructural Adjustment Loan, which envisages substantial adjust-ment and investment financing in support of the formerYugoslav Republic of Macedonia's reform efforts in the enter-prise and financial sectors;
(8)The authorities of the former Yugoslav Republic of Macedoniahave requested financial assistance from the international finan-cial institutions, the Community and other bilateral donors; overand above the estimated financing which could be provided bythe IMF and the World Bank, an important residual financing
gap remains to be covered in 1999 and 2000 in order to
strengthen the country's reserve position and support the policyobjectives attached to the government's reform programme;
(9)Financial assistance from the Community in the form of acombination of a long-term loan and a straight grant to theformer Yugoslav Republic of Macedonia is an appropriate
measure to support the balance of payments and help ease the
country's external financial constraints in the current exception-ally difficult circumstances, comforting the implementation of1999D0733 — EN — 10.12.2001 — 001.001 — 2
(1) OJ C 307E, 26.10.1999, p. 43.
(2) Opinion delivered on 6 October 1999 (not yet published in the Official
Journal).
(3) OJ L 348, 18.12.1997, p. 2.
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structural reforms and helping to alleviate the social conse-
quences of the economic disruptions caused by the conflict inKosovo;
(10)The inclusion of a grant component in this assistance is withoutprejudice to the powers of the budgetary authority;
(11)This assistance should be managed by the Commission in accor-dance withth e principles of sound financial management;
(12)The Treaty does not provide, for the adoption of this Decision,powers other than those of Article 308,
HAS DECIDED AS FOLLOWS:
Article 1
1. The Community shall make available to the former Yugoslav
Republic of Macedonia financial assistance in the form of a long-term
loan facility and straight grants, with a view to ensuring a sustainable
balance of payments situation.
2. The loan component of this assistance shall amount to a
maximum principal of EUR 50 million, witha grace period of 10 yearsand a maximum maturity of 15 years. To this end, the Commission isempowered to borrow, on behalf of the European Community, the
necessary resources that will be placed at the disposal of the former
Yugoslav Republic of Macedonia in the form of a loan.
3. The grant component of this assistance shall amount to a
maximum of EUR 48 million.
4. The Community financial assistance shall be managed by the
Commission in close consultation withth e Economic and FinancialCommittee and in a manner consistent withany agreement reach edbetween the IMF and the former Yugoslav Republic of Macedonia.
Article 2
1. The Commission is empowered to agree with the authorities of
the former Yugoslav Republic of Macedonia, after consultation of theEconomic and Financial Committee, the economic policy conditionsattached to this assistance. These conditions shall be consistent withthe agreements referred to in Article 1(4).
2. The Commission shall verify at regular intervals, in collaboration
withth e Economic and Financial Committee and in coordination with
the IMF, that the economic policy in the former Yugoslav Republic ofMacedonia is in accordance with the objectives of this assistance andthat its conditions are being fulfilled.
Article 3
1. The loan and grant components of this assistance shall be made
available to the former Yugoslav Republic of Macedonia in at least
two instalments. Subject to the provisions of Article 2, the first instal-ment is to be released on the basis of an agreement between the formerYugoslav Republic of Macedonia and the IMF on a macroeconomicprogramme that is supported by an upper credit tranche arrangement.
2. Subject to the provisions of Article 2, the second and any further
instalments shall be released on the basis of a satisfactory track record
in the former Yugoslav Republic of Macedonia's adjustment andreform programme and not before three months after the release ofthe first instalment.
3. The funds shall be paid to the National Bank of the former Yugo-
slav Republic of Macedonia.1999D0733 — EN — 10.12.2001 — 001.001 — 3
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Article 4
1. The borrowing and lending operations referred to in Article 1
shall be carried out using the same value date and must not involve
the Community in the transformation of maturities, in any exchange
or interest rate risk, or in any other commercial risk.
2. The Commission shall take the necessary steps, if the former
Yugoslav Republic of Macedonia so requests, to ensure that an earlyrepayment clause is included in the loan terms and conditions and thatit may be exercised.
3. At the request of the former Yugoslav Republic of Macedonia,
and where circumstances permit an improvement in the interest rate of
the loan, the Commission may refinance all or part of its initial
borrowings or restructure the corresponding financial conditions. Refi-nancing or restructuring operations shall be carried out in accordancewith the conditions set out in paragraph 1 and shall not have the effectof extending the average maturity of the borrowing concerned or
increasing the amount, expressed at the current exchange rate, of
capital outstanding at the date of the refinancing or restructuring.
4. All related costs incurred by the Community in concluding and
carrying out the operation under this Decision shall be borne by theformer Yugoslav Republic of Macedonia.
5. The Economic and Financial Committee shall be kept informed of
developments in the operations referred to in paragraphs 2 and 3 atleast once a year.
Article 5
At least once a year, as a rule by 15 September, the Commission shall
address to the European Parliament and to the Council a report, which
will include an evaluation of the implementation of this Decision.
Article 6
This Decision shall expire on 31 December 2003.1999D0733 — EN — 10.12.2001 — 001.001 — 4
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