EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 14.10.2009 
SEC(2009) 1324 final 
  
COMMISSION STAFF WORKING DOCUMENT 
Ex ante evaluation statement 
Macro-financial Assistance to Armenia 
{COM(2009) 531 final}
 
EN 2   EN TABLE OF CONTENTS 
1. Problem analysis and needs assessment....................................................................... 3 
1.1. Background ................................................................................................................ .. 3 
1.2. Recent economic developments and prospects............................................................ 3 1.3. The Government programme  of economic reforms..................................................... 6 
1.4. Armenia's external financing needs ............................................................................. 7 2. Objectives and Related Indicators of  the macro-finantial assistance........................... 9 
2.1. Objectives................................................................................................................ ..... 9 
2.2. Indicators................................................................................................................ ...... 9 
3. Alternative delivery mechanis ms and risk assessment ................................................ 9 
3.1. Delivery mechanisms................................................................................................... 9 3.2. Risk assessment.......................................................................................................... 1 0 
4. Added value of Community involvement.................................................................. 11 5. Genval criteria............................................................................................................ 1 1 
6. Planning future monitoring and evaluation................................................................ 12 6.1. Monitoring................................................................................................................ .. 13 
6.2. Evaluation ................................................................................................................ .. 13 
7. Achieving cost-effectiveness ..................................................................................... 13 
 
EN 3   EN 1. PROBLEM ANALYSIS AND NEEDS ASSESSMENT  
1.1. Background 
During the last six years, prudent macr oeconomic policies and economic reforms 
together with a flexible exchange rate re gime (abandoned de facto in the outbreak of 
the financial turmoil) delivered in Arme nia double digit non inflationary growth 
which was accompanied by large-scale foreign exchange inflows and remittances. The macroeconomic performance had been goo d with relatively low inflation (the 
lowest in the CIS region), low fiscal defi cit (1.2% of GDP) and low debt stock (13% 
of GDP). Macroeconomic stability and stro ng growth rates cont ributed to rising 
incomes and improved social conditions wh ich led to the reduction of poverty rates 
from 34.6% in 2004 to 25% in 2007. However, GDP increased by only 6.8% in 2008 down from 13.7% in 2007, being mainly the result of a sharp decrease of the economic activity in the four th quarter amid the deep ening global financial and 
economic crisis.  
As the fall in economic activity and in fo reign inflows continue d sharper in 2009, the 
Armenian Central Bank decided to limit its interventions and to revert to a full 
floating exchange rate regime allowing a de-facto devaluation of the currency around 
22%. At the same time, the IMF ann ounced on the 6 March 2009, a USD 540 million 
(400% of the quota), 28-month Stand-By Arrangement which was expected to 
stabilize the external account s, to provide enough liquidity  in forex for the banking 
sector and finally to calm down market wo rries by ensuring the smooth transition to 
the floating exchange rate regime. Despite th is adjustment, in the virulent worsening 
economic environment external and fiscal c onditions deteriorated rapidly resulting to 
an increase of the resources of the Fund by about USD 250 million (180% of quota) after the completion of the first progra mme review, approved by the IMF Board on 
22 June 2009. The revised programme also foresees additional bilateral financing, 
including by the EU. The Community Macr o-financial assistance will consist of a 
combination of a grant (EUR 35 million) and a loan (EUR 65 million). 
1.2. Recent economic developments and prospects 
The Armenian economy grew by 6.8% in 2008, after six years of double digit growth 
based mainly on remittances inflows and FDI's from Russia. However, the global 
economic downturn and particularly the ra pid deterioration of the Russian economy 
had a deep impact on the economic activity in Armenia which started to contract 
since the last quarter of 2008. 
Growth in construction, the main contribu tor to the economic growth of the recent 
years, dropped from 19% in 2007 to 7% in  2008. Activity contracted in metallurgy (-
9.6%) and in diamond processing (-15%); th e chemicals subsector also stood idle 
because of declining global demand for synt hetic rubber and other chemicals. This 
situation resulted to the deterioration of the current account deficit to 11.3% of GDP 
in 2008 from 6.4% in 2007. 
The Armenian currency remained relatively stable during 2008 partly because of the 
interventions of the Central Bank (leading to a 20% reduction of the reserves until 
January 2009); however, given the conti nuous deterioration in the economy, the 
 
EN 4   EN authorities reverted in early March to a fu lly floating exchange rate regime allowing 
a de-facto devaluation of the Armenian Dram of around 22 % against the euro and 
the USD. At the same time the IMF approved a USD 540 million 28-month Stand-By Arrangement to help Armenia to deal w ith the worsening economic environment and 
to ensure the smooth transition to th e floating exchange rate regime.  
The negative effects of the devaluation ha ve been largely absorbed due to prudent 
economic management by the authorities (1% increase in the Central Bank of 
Armenia policy rate) and effective comm unication. Deposits did not fall, while 
dollarization remained stable following a sh arp rise prior to the devaluation. The 
banking system has absorbed so far the balance sheet losses arising from the devaluation and the inflation rate increased s lightly from 1% in March to 3% in April 
and to 3.5% in May in the f ace of a weak domestic demand.  
Nevertheless, the economic situ ation in the first six mont hs of 2009 has dramatically 
worsened with the GDP contracting by 16.3%  on a year-on-year basis. Industrial 
output contracted by 11.5% wh ereas construction sector declined by 53.5% in the 
first six months year-on-year. On the comp letion of the first review of the IMF SBA 
(approved on the 22 of June), overall real GDP  is forecasted to contract by 9.5% in 
2009
1 representing a massive turnaround compared  to growth rates of the previous 
years, and also a substantia l deterioration of Armenia' s economic outlook (see Tables 
below) compared by what was anticipated at  the time of the appr oval of the SBA (in 
March 2009).  
The economic contraction resu lted in large additional gove rnment financing needs as 
revenues fell by 33% in the first five months of 2009 (year -on-year) and the 
authorities did not manage to meet the ta rget for the fiscal deficit despite the 
postponement of non essential expenditures.  Therefore, even with significant budget 
cuts the fiscal deficit is projected to be around 6.5% of GDP in 2009 and is unlikely 
to be covered by financing sources identified originally by the IMF. 
Although the banking system remains solid, cr edit conditions in the economy have 
worsened. Liquidity in local currency remains a constraint. With high deposit dollarization (nearly 70%), banks  are reluctant to lend in local currency. As a result 
credit to the private sector is largely frozen hurting fu rther economic activity. Also, 
prospects for placing domestic debt in local currency appear limited in this context. 
The economic downturn has also led to a sh arp widening of the external financing 
needs compared to March 2009. This is the re sult of a much deeper deterioration in 
export earnings, remittances and FDI despite th e devaluation of the exchange rate in 
March 2009. During the first six months of  2009, foreign trade turnover contracted 
by 31.5% year-on-year, with exports dropping by 45.9% and imports by 27.5%. Remittances fell by 30%
2 during January-May 2009 compared to the same period of 
2008. Exports and remittances are now expected to contract between 10-20% in both 2009 and 2010 leading to a widening current  account deficit of 13% of GDP for 
2009, despite the devaluation of the exchange rate. 
                                                
 
1 More recent data suggest that GDP contraction is likely to be more than 10% in 2009. 
2 Preliminary more recent data suggest that the fall in  remittances is likely to be more than 30% in 2009. 
 
EN 5   EN Table 1: Armenia - Main Economic Indicators
2007 2008 2009 2010
Actual
Real sector
   Real GDP growth (% change) 13.7 6.8 -9.5 1.3   CPI Inflation (period average) 4.4 9.0 3 2.7
   GDP per capita, in USD 2,853 3,685 2,857 2,722
   Unemployment rate, % 7.0 6.3
Fiscal Sector
   Revenue, incl. grants % of GDP 20.1 20.0 20.4 20.4   Expenditure, % of GDP 22.4 21.8 26.8 23.3
   Overall balance, % of GDP -2.3 -1.3 -6.5 -5.8
   Capital spending and net lending, % of GDP 5.2 3.9 5.0 5.2
   Net lending, % of GDP 2.3 1.3 6.5 5.8
Government and government-guaranteed debt, % of GDP 17.5 17.8 37.6 43.5
External sector
   Current account balance, % of GDP -6.4 -11.3 -13.0 -13.5   Exports of goods and services, % of GDP 19.3 14.5 13.6 16.5
   Imports of goods and services, % of GDP 39.0 39.3 37.7 41.7
   Foreign direct investment, % of GDP 7.6 7.8 4.7 5.4
Monetary sector
   Broad money growth, % 42.3 2.4 10.3
   Private credit growth, % 77.9 48.7 10.6
   Foreign exchange deposit, % of total -9.1 32.4 90.2
External Vulnerability
   External public debt, % of GDP 17.3 15.3 31.5 38.8
   Public debt service ratio
12 . 93 . 25 . 76 . 3
   Total external debt, % of GDP 21.0 18.0 34.2 40.0
   Gross reserves (excl. gold, USD millions) 1,659 1,405 1,604 1,546
   Import cover (months) 4.3 4.8 5.1 4.6
Sources: IMF, World Bank
1   in % of exports of goods and servicesProjections
 
EN 6   EN 1.3. The Government programme of economic reforms 
The economic policies pursued by the Armenian authorities have been updated and 
revised to reflect the more challenging outlook. The objectives of the program 
remain unchanged: namely, to help Armeni a adjust to the changed external outlook, 
maintain confidence, and pr otect the poor. The main economic policy measures of 
the Armenian government are summarised below in the Box 1: 
Box 1 – Armenian Government Policy Measures  
 
Monetary, exchange rate and financial sector policies  
- Flexible exchange rate regime, transparent an d smooth intervention policy, reserves building, 
- Prudential measures regarding foreign currency exposures 
- Unlock the frozen credit market and streng then the transmission of monetary policy 
- Gradual recapitalization of the CBA with marketable interest-bearing securities 
- Development of government securities with extended maturities 
- Credit easing operations – Improvements in Banks' monitoring and risk management 
- Enhancement of deposit guarantee fund 
 
Fiscal policies 
- Focus on the sustainability of medium-term fiscal position 
- Refocus of targeted public spending, increase of external sources to capital spending and SME's 
- Increase domestic financing moderately to address financing needs in addition to supporting financial 
intermediation 
- Reforms in tax policies and tax administration 
 
Structural policies 
- Improvements in business climate, establishment of industrial zones, protection of economic 
competition 
 
EN 7   EN  
1.4. Armenia's external financing needs 
The estimate of Armenia's external fina ncing needs in 2009-2010 contained in the 
first SBA review is summarised in Table 2 (on next page). Total needs for the two years, comprising essentially the financing of the current account deficits of about 
13% of GDP, amount to USD 4.2 billion. Av ailable financing, including the reduced 
private capital flows (FDI is expected to go down to about 5% of GDP from nearly 
8% in 2007-2008) and the bulk of project-re lated public sector funding is projected 
to leave a financing gap of close to USD 1.7 billion.  
Out of this amount, the IMF is expected to provide USD 746 million (including the 
original SBA funding and the recently appr oved augmentation of Armenia's access to 
IMF resources), while the World Bank (I DA) and the Asian Development Bank are 
putting in place an additional USD 200 million, mainly in the form of budget support. The residual financing gap of Armenia – about USD 720 million – is 
expected to be covered by bilateral donors: Russia has announced a total credit of 
USD 500 million (for project financing) and is  currently finalising the operation; the 
UK is planning additional budge t support grants; finally, the EU has put in place 
sectoral budget support gran ts under the European Ne ighbourhood and Partnership 
Instrument (ENPI). The macro-financial assistance under prepar ation amounting to 
EUR 100 million – or around 19% of the resi dual financing needs – would be an 
appropriate contribution of the EU  to close the financing gap.  
 
EN 8   EN Table 2: Armenia - External Financing Requirements and Sources
in million US dollars
2009 2010 2009-10
Total Requirements 2.228 1.969 4.197
 External current account deficit (exc. transfers) 1.983 1.982 3.965
 Debt amortization 22 24 46
 IMF repurchases and repayments 24 21 45
 Gross international reserve accumulation 200 -58 141
Available financing 1.115 1.420 2.535
 Current transfers 739 732 1.471
    Private 704 718 1.423
    Official 1/ 35 13 48
 Capital Account 374 687 1.060
   Capital transfers (net) 103 73 176
   Foreign Direct Investment 440 490 930
   Public Sector Disbursements 177 165 342
   Other Capital 2/ -347 -41 -388
 Debt Relief 3/ 2 2 4
Financing gap 1.113 549 1.662
Exceptional IFI financing 585 359 944
 IMF 455 291 746
   SBA - Initial 349 139 488   SBA - Augmentation 106 152 258
 Expected additional World Bank financing 60 43 103
 Expected additional Asian Development Bank financing 70 25 95
Residual Financing Gap after IFI Financing 528 190 718
Expected exceptional bila teral financing 532 46 578
 Additional ENPI Budget Support 17 27 44
 Additional UK Budget Support 15 19 34
 Loans from Russia 500 500
Residual 140 140
Sources: Armenian authorities, IMF staff estimates and Commission calculations.
1/ Excludes undisbursed amounts under EU (ENPI) and UK Budget support and the recently
suspended US/MCC road project financing (USD 20 and 15 million in 2009-2010).
2/ Includes portfolio investment and net errors and omissions.
3/ Includes debt deferal from the Lincy Foundation in 2003 and debt relief from Turkmenistan
in 2003 and from the United Kingdom from 2006 to 2008. 
 
EN 9   EN 2. OBJECTIVES AND RELATED INDICATORS OF THE MACRO -FINANTIAL ASSISTANCE  
2.1. Objectives 
The objectives of the proposed macro- financial assistan ce operation are the 
following: 
• Contribute to covering Armenia's external  financing needs; alleviate budgetary 
financing needs; 
• Support the fiscal consolidation effort in the context of an IMF programme; 
• In this respect, help Armenia to re duce the financial constraints on the 
implementation of its comprehensive economic reform programme; 
• Facilitate and encourage e fforts of the authorities of Armenia to implement 
measures identified under the EU-Arm enia Action Plan and the Eastern 
Partnership; 
• Reinforce the EU role in the economi c policy dialogue with the Armenian 
authorities on the programme of reforms. 
Detailed macro-economic and structural refo rm objectives will be further defined in 
the context of a Memorandum of Understand ing, to be agreed w ith the authorities. 
2.2. Indicators 
To monitor the fulfilment of the obj ectives of the programme throughout the 
implementation period of the assistance, the Commission will use two types of indicators: 
• Adherence to the IMF-supported programme ; it will be a conditio sine qua non for 
the implementation of the assistance; 
• Progress in the implementation of specific actions that will be part of the 
conditions for disbursement. Those actions will be specified in the 
aforementioned Memorandum of Understandin g. They will be c onsistent with the 
policy lines anchored in the IMF pr ogramme, as well as the European 
Neighbourhood Policy and Easter n Partnership priorities. 
3. A
LTERNATIVE DELIVERY MECHAN ISMS AND RISK ASSESSMENT  
3.1. Delivery mechanisms 
Given the sharp deterioration of Armeni an economy, the country's low income 
profile and its entitlement in receivi ng concessional borrowing, it is deemed 
appropriate to provide part of the foreseen  macro-financial assist ance in the form of 
grants (EUR 35 million) and the rest in  the form of loans (EUR 65 million). 
 
EN 10   EN Macro-financial assistance is an untied and undedicated macroeconomic support, 
which helps the beneficiary meet its exte rnal financing need s, and contributes 
alleviating budgetary financing needs. Mo reover, as experien ced with similar 
operations, including in Armenia, the economic  policy conditionality attached to this 
support strengthens the stabilis ation and reform process. 
3.2. Risk assessment 
There are both fiduciary and policy risks re lated to this macro-financial assistance 
operation.  
There is a risk that this assistance, wh ich is not dedicated to specific expenses 
(contrary to project financing, for example) , would be used in a fraudulent way, like 
any other type of assistance. Generally speaking, this risk is  related to factors such as 
the independence of the central bank, the qua lity of systems and procedures related 
to the management, control and oversight functions in the financial circuits and 
processing of such assistance, IT security and internal/external audit capacity of the 
beneficiary authorities.  
To mitigate the risks of fraudulent use,  several measures will be taken. The 
Memorandum of Understanding and the Grant/Loan agreements will comprise a set of provisions on inspection, fra ud prevention, audits, and rec overy of funds in case of 
fraud or corruption. Also, the assistance will  be paid to clearl y identified accounts at 
the Central Bank of Armenia. Moreover, before the agreement on the Memorandum of Understanding is reached, the Commission se rvices will assess the reliability of 
financial circuits and admini strative procedures that are relevant to this type of 
assistance and will determine whether the framework for sound financial 
management of macro-financial assistance is sufficiently effective in Armenia (for 
details, see Financial Statemen t, section 7). In the light of this assessment, specific 
mechanisms applying to the management of  the funds by the beneficiaries may be 
introduced in agreement with the national authorities. The Commission may also use 
other assistance instruments at its disposal to help the beneficiar y authorities improve 
their public finance management systems if this area is not sufficiently covered by 
other donors. 
Finally, the assistance will be liable to ve rification, control and auditing procedures 
under the responsibility of the Commission, including the European Antifraud Office 
(OLAF), and the European Court of Auditors. 
As regards policy risks, the main assumption is that the Government of Armenia will 
remain committed to fiscal adjustment and in compliance with its agreement with the 
IMF. This will be validated on the basis of IMF’s quarterly monitoring of performance indicators and structural benchmarks. There is a risk that the 
Government of Armenia will not comply w ith the IMF programme conditions, as the 
fiscal target may turn out more difficult to  reach than assumed, in particular as the 
risks to the growth assumptions  are clearly on the downside. 
While seriously taking into account these risks, the Commission services consider 
that there are sufficiently st rong grounds to proceed with  MFA to Armenia. The large 
financing needs faced by Armenia in partic ular in 2009 and to a lesser extend in 2010 
plead in favour of urgent action. 
 
EN 11   EN The Commission services will maintain close contacts with the authorities during the 
implementation of the macro-financial assistance in order to address quickly any concerns that may arise. 
4. A
DDED VALUE OF COMMUNITY INVOLVEMENT  
By providing financing complementary to resources made available to Armenia by 
the International M onetary Fund and the World Bank, the Community would support 
Armenia's domestic efforts of responding to the impact of current global economic crisis. It would encourage and strength en the implementation of the reform 
programme. This will be particularly im portant in the areas targeted by the 
programme’s conditionality, in particular th e fiscal consolidation effort aimed at 
reducing public expenditures to a sustainable level. Moreover, the effect of the 
Community’s involvement will be strengthene d as a result of th e synergy with other 
Community programmes aiming at supporting Armenia's dire fis cal situation, in 
particular the European Neighbourhood a nd Partnership Instrument budget support 
grants (EUR 32 million to be provided in two instalments in 2009 and 2010).  
The macro-financial assistance is a policy-ba sed instrument and would therefore also 
contribute to support the European Union’s strategy towards Armenia, in particular 
in the context of the European Neigh bourhood Policy and the Eastern Pertnership  
5. G
ENVAL CRITERIA  
The Commission services have given due cons ideration to the five Genval criteria.  
Exceptional character: 
Armenia's financing requirements in 2009-2010 result from the impact of the global 
economic crisis on Armenia, and its high exposure to this cris is in view of its 
external and fiscal imbalances and its  high dependence on foreign inflows and 
remittances.  
The exceptional character of the foreseen MFA is further stressed by the limited 
timeframe of the programme. In determini ng the actual amount of the tranches under 
the MFA programme, the Commission services intend to take into consideration the 
progress in the implementation of the IMF programme and of the World Bank 
development policy loans, as well as the timeframe of other main donors supporting Armenia with budget support, which still need to be identified. 
Scope :  
Armenia is an active partner to the Eur opean Neighbourhood Policy as well as to the 
recently established Eastern Partnership. It has demonstrated a good record of 
macroeconomic management and economic reforms in the recent past while it 
respects democracy and human rights and as  such should be considered as eligible 
for EC MFA support. 
Complementarity: 
 
EN 12   EN The Community MFA will be complementary to external financing coming from two 
main sources: (i) the Intern ational Monetary Fund and the World Bank; and (ii) 
bilateral donors in case some preliminary fi nancing indications can be confirmed and 
enable for disbursements over the programme pe riod. It should also  be noted in this 
context that it is complementary to budgeta ry support expected to be provided under 
the Community ENPI programme (EUR 32 million over 2009-2010). In this context and in the short run, MFA will both incr ease substantially the European Union's 
leverage on Armenia's policy making and strengthen the country’s European orientations, and provide a highly valuable bridge fina ncing to help the country 
weather the effects of th e current economic crisis. 
Conditionality: 
The macro-financial assistance to Arme nia will be linked to an IMF stand-by 
arrangement. As usual with this type of  assistance, disbursements under this macro-
financial assistance will be subject to progress in the implementation of the IMF arrangement. It will also be conditional upon specific structural re form measures that 
will be further defined in the context of a Memorandum of Understanding to be jointly agreed between the Commissi on and the Armenian authorities. 
Given the nature of the planned operation, in  defining the conditionality in the area 
of structural policies, partic ular attention will be paid to public finance management 
with a view to strengthening efficiency, transparency and accountability, and because 
of its importance for fiscal consolidation. As Armenia is a partner country to the 
European Neighbourhood Policy and to the Eastern Partnership, the Commission may consider targeting specific sectoral polic ies of particular importance, identified 
as such in the EU-Armenia Action Plan or 2009 Progress Report like banking supervision. 
Financial Discipline: 
The Commission services propose to limit th e macro-financial assistance to Armenia 
to up to EUR 100 million. This corresponds cu rrently to the 19% amount (ex-ante) of 
the residual financing gap foreseen afte r IMF and World Bank support identified by 
the IMF for the year 2009-2010. Data on the balance-of-payments gap are by nature 
volatile. Additionally, additional bilateral financing may materialise in the course of the programme that cannot yet be include d in the current programme assumptions. 
Concerning sound financial management, th e Commission services  are taking action 
in order to fulfil the requirements of the Financial Regulation. The Commission will launch an Operational Assessment (OA) of th e reliability of financial circuits and 
administrative controls at the Ministry of Finance and the Central Bank of Armenia. 
Based on the OA report's findings, the Commission services will determine whether the framework for sound financial management  is sufficiently effective in Armenia. 
Also, the results of the OA will contri bute to the defin ition of appropriate 
conditionality in the area of public finance management. 
6. P
LANNING FUTURE MONITORING AND EVALUATION  
This assistance is of exceptional and macro-economic nature and its monitoring and 
evaluation will be undertaken in line w ith the standard Commission procedures: 
 
EN 13   EN 6.1. Monitoring 
The monitoring system will be ensured by the provision of reports and data by the 
authorities, as to be set out in th e Memorandum of Understanding and the 
organisation of review missions in Ar menia by Commission staff. Although this 
assistance is centrally managed, where appropriate, Commission Delegation will also be called to provide additional reporting.  
In particular, the monitoring of the action by the Commission services will take place 
on the basis of a system of macro-economic  and structural polic y indicators to be 
agreed with the authorities of  Armenia. In this process, the Commission services may 
also monitor key areas to be identified in the above-mentioned Operational Assessment on public finance management.  
An annual report to the European Pa rliament and to the Council on the 
implementation of this assistance is fo reseen in proposed text of the Council 
Decision on MFA to Armenia. 
6.2. Evaluation 
In the context of DG ECFIN Multi-annual Ev aluation Programme, two to three ex-
post evaluations of MFA operations are planned per year. It is in this framework that 
an independent evaluation of the assistan ce will be carried out by duly authorised 
representatives of the Commission in due course. A provision foreseeing an ex-post 
evaluation will be included in the Memorandum of Understanding. Financial resources for this evaluation would be drawn from the corresponding MFA budget line.  
7. A
CHIEVING COST -EFFECTIVENESS  
In implementing the programme, the Commission will be guided by the following 
principles:  
• The assistance will be made available by the Commission to Armenia in principle 
in two instalments. Each in stalment will be released on the basis of a satisfactory 
track record in implementing the m acro-economic programme under the IMF-
supported programme and the specific economic  policy conditions attached to the 
assistance. The latter will be negotiated with the authorities as soon as possible 
and laid down in a Memorandum of Unde rstanding concluded to this effect.  
• As soon as the Council ha s adopted the proposal, the Commission will negotiate 
with the Armenian authorities a Memo randum of Understanding laying out the 
conditions for the release of the EU assi stance, as well as a grant and a loan 
agreement. All tranches of the proposed assistance will be made available by the 
Commission to Armenia on the basis of a satisfactory track record of the 
implementation of the IMF programme and the economic policy and financial 
conditions attached to the assistance. 
• In negotiating specific policy conditions , the Commission will draw on all the 
expertise, including of th e International Monetary Fund and the World Bank and 
of bilateral and multilateral aid agencies ac tive in the same areas. In addition, the 
 
EN 14   EN Commission will aim at synergies with other Community policies and instruments 
(notably ENPI as indi cated above) that could be used to support the 
implementation by the beneficiary of the rele vant measures (notably in the area of 
public finance management and of the fina ncial sector). Wher e appropriate, links 
to any related action under the Eur opean Neighbourhood Policy or Eastern 
Partnership or findings of the Progres s Reports can also be established.  
• This action is exceptional by nature and w ill not involve an increase in the number 
of Commission staff.