2001D0549 — 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 COUNCIL DECISION
of 16 July 2001
providing macro-financial assistance to the Federal Republic of Yugoslavia
(2001/549/EC)
(OJ L 197, 21.7.2001, p. 38)
Amended by:
Official Journal
No page date
►M1Council Decision 2001/901/EC of10 December 2001 L 334 30 18.12.2001
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COUNCIL DECISION
of 16 July 2001
providing macro-financial assistance to the Federal Republic of
Yugoslavia
(2001/549/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 ofthe Commission,
Having regard to the opinion ofthe European Parliament (1),
Whereas:
(1) The Commission consulted the Economic and Financial
Committee before submitting its proposal.
(2) Political changes in the Federal Republic ofYugoslavia and the
Republic ofSerbia have taken place leading to new democratic
governments and the Federal Republic ofYugoslavia is makingefforts to establish a well-functioning market economy.
(3) Within the Stabilisation and Association process, constituting theframework for EU relations with the region, it is desirable tosupport efforts made to ensure a stable political and economic
environment in the Federal Republic ofYugoslavia, with a view
to evolving towards the development ofa f ull cooperationrelationship with the Community.
(4) The Community provided an emergency assistance package ofapproximately EUR 200 million comprising food aid and medical
and energy supplies to provide for the basic needs of the
population during the winter of2000/01.
(5) Financial assistance from the Community shall be instrumental inbringing the Federal Republic ofYugoslavia closer to theCommunity.
(6) The Federal Republic ofYugoslavia has reached an under-
standing with the International Monetary Fund (IMF) on a
comprehensive set ofeconomic stabilisation and ref ormmeasures. The IMF approved a one-year stand-by arrangementon 11 June 2001.
(7) The Federal Republic ofYugoslavia has reached an under-standing with the World Bank on a set ofstructural adjustment
measures to be backed by Structural Adjustment Loans and
Credits in the areas of public finance reform, enterpriseprivatisation and banking restructuring.
(8) The authorities ofthe Federal Republic ofYugoslavia haverequested financial assistance from the international financialinstitutions, the Community, and other bilateral donors.
(9) Over and above the estimated financing which could be providedby the IMF and the World Bank, an important residual financinggap remains to be covered in the coming months in order tostrengthen the country's reserve position and to support the policyobjectives attached to that country's authorities' reform efforts.
(10) The authorities ofthe Federal Republic ofYugoslavia havecommitted themselves to fully discharge all outstanding financialobligations ofall public entities ofthe Federal Republic ofYugoslavia towards the European Community and the EuropeanInvestment Bank, and to accept the responsibility by way ofguarantee for those obligations that are not yet due.2001D0549 — EN — 10.12.2001 — 001.001 — 2
(1) Opinion delivered on 5 July 2001 (not yet published in the Official Journal).
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(11) Community macro-financial assistance to the Federal Republic of
Yugoslavia in the f orm ofa combination ofa long-term loan and
a straight grant is an appropriate measure to help, with otherdonors, ease the country's external financial constraints,supporting the balance ofpayments and strengthening the reserveposition.
(12) The Federal Republic ofYugoslavia is temporarily eligible f or
highly concessional loans and facilities from the World Bank.
(13) The inclusion ofa grant component in this assistance is without
prejudice to the powers ofthe budgetary authority.
(14) This macro-financial assistance should be managed by theCommission in consultation with the Economic and Financial
Committee.
(15) The Treaty does not provide, for the adoption of this Decision,
powers other than those ofArticle 308,
HAS DECIDED AS FOLLOWS:
Article 1
1. The Community shall make available to the Federal Republic of
Yugoslavia macro-financial assistance in the form of a long-term loanand a straight grant with a view to ensuring a sustainable balance-of-payments situation and strengthening the country's reserve position.
2. The loan component ofthis assistance shall amount to a maximum
principal ofEUR 225 million with a maximum maturity of15 years tobe released in the first instalment. To this end, the Commission is
empowered to borrow, on behalfofthe European Community, the
necessary resources that will be placed at the disposal ofthe FederalRepublic ofYugoslavia in the f orm ofa loan.
3. The grant component ofthis assistance shall amount to a
maximum ofEUR 120 million.
4. The Community financial assistance shall be managed by the
Commission in close consultation with the Economic and Financial
Committee and in a manner consistent with any agreement reached
between the IMF and the Federal Republic ofYugoslavia.
5. The implementation ofthis assistance is conditional upon
clearance in f ull by the Federal Republic ofYugoslavia ofthe
outstanding due financial obligations of all public entities towards theCommunity and the European Investment Bank and upon the acceptanceby the Federal Republic ofYugoslavia ofresponsibility by way ofguarantee for those obligations that are not yet due.
Article 2
1. The Commission is empowered to agree with the authorities ofthe
Federal Republic ofYugoslavia, af ter consultation with the Economicand Financial Committee, the economic policy conditions attached tothe Community macro-financial assistance. These conditions shall beconsistent with the agreements referred to in Article 1(4).
2. The Commission shall verify at regular intervals, in collaboration
with the Economic and Financial Committee and in co-ordination withthe IMF, that economic policies in the Federal Republic ofYugoslaviaare in accordance with the objectives ofthis macro-f inancial assistance
and that its conditions are being fulfilled.
Article 3
1. The loan and grant components ofthis assistance shall be made
available to the Federal Republic ofYugoslavia in at least twoinstalments. Subject to the provisions ofArticle 2, the f irst instalment isto be released after the full settlement of the outstanding financial2001D0549 — EN — 10.12.2001 — 001.001 — 3
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obligations ofthe Federal Republic ofYugoslavia towards the
Community and the European Investment Bank and on the basis ofanagreement between the Federal Republic ofYugoslavia and the IMF on
a macro-economic programme that is supported by an upper credit
tranche arrangement.
2. Subject to the provisions ofArticle 2, the second and any f urther
instalments shall be released on the basis ofa satisf actory track record inthe Federal Republic ofYugoslavia's adjustment and ref orm programmeand not earlier than three months after the release of the previous
instalment.
3. The funds shall be paid to the National Bank of the Federal
Republic ofYugoslavia.
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 theCommunity in the transformation of maturities, in any exchange orinterest rate risks, or in any other commercial risk.
2. The Commission shall take the necessary steps, ifthe Federal
Republic ofYugoslavia so requests, to ensure that an early repayment
clause is included in the loan terms and conditions and that it may be
exercised.
3. At the request ofthe Federal Republic ofYugoslavia, and where
circumstances permit an improvement in the interest rate ofthe loan, theCommission may refinance all or part of its initial borrowings orrestructure the corresponding financial conditions. Refinancing orrestructuring operations shall be carried out in accordance with the
conditions set out in paragraph 1 and shall not have the effect of
extending the average maturity ofthe borrowing concerned or increasingthe amount, expressed at the current exchange rate, ofcapitaloutstanding at the date ofthe ref inancing or restructuring.
4. All related costs incurred by the Community in concluding and
carrying out the operation under this Decision shall be borne by the
Federal Republic ofYugoslavia, ifappropriate.
5. The Economic and Financial Committee shall be kept informed of
developments in the operations referred to in paragraphs 2 and 3 at leastonce a year.
Article 5
At least once a year, and before September, the Commission shall
address to the European Parliament and to the Council a report, whichwill include an evaluation on the implementation ofthis Decision in theprevious year.
Article 6
This Decision shall take effect on the day of its publication in the
Official Journal of the European Communities .
It shall expire two years after the date of its publication.2001D0549 — EN — 10.12.2001 — 001.001 — 4