Proposal for a COUNCIL DECISION providing exceptional financial assistance to Armenia, Georgia and, if appropriate, Tajikistan
Date: 1997-02-03
Institutions: European Commission
Subjects: Community loan, EU aid, USSR, economic reform, financial aid

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  03.02.1997 
COM(97) 24 final 

97/0028 (CNS) 

Proposal  for  a 

COUNCIL  DECISION 

providing  exceptional  financial  assistance 

to  Armenia,  Georgia  and,  if  appropriate,  Tajikistan 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

General economic situation  of Armenia, Georgia and  Tajikistan 

Armenia,  Georgia and Tajikistan  were  severely hit by the economic collapse resulting  from 
the  breaking  up  of  the  command  economy  and  the  disintegration  of  the  Former  Soviet 
Union.  The  crisis  reached  its  height  in  1993  when  inter-republican  payments  and  trade 
virtually  ceased,  arrears  accumulated,  and  prices  increased  at  hyper-inflationary  rates. 
Additionally, civil hostilities in Georgia and Tajikistan,  as well as war between Armenia and 
Azerbaijan  in Nagorno Karabakh, have destroyed  infrastructure,  disrupted  trade,  and led  to 
hundreds  of  thousands  of  refugees  displaced  to  other  regions.  In  Armenia,  these  shocks 
were  compounded  with the not yet  overcome consequences  of the  1988  earthquake  which 
had  destroyed  a  large  share  of  the  manufacturing  base  and  housing  stock.  Under  such 
critical circumstances,  output  dropped  sharply between  1990 and mid-1994, by about  two-
thirds  in  all  three  countries,  and  living  standards  of  the  average  population  fell  below 
poverty levels. 

Out  of  the  three  countries,  Armenia  was  the  first  to  implement  stabilisation  policies  and 
structural  reforms.  After  a tightening  of monetary  policies  in the  second  half  of  1994  and 
last  year,  inflation  fell  to  30%  in  1995.  The  budget  deficit  was  contained  below  10%  of 
GDP  in  1995,  down  from  50% in  1993. The  economy  began  to  grow  again  in  1994  and 
1995 at an estimated  5% annual rate. The external account remains heavily constrained  and 
the country, with hard  currency resources  in the amount  of roughly  1.7  months  of imports, 
has merely the means to cover core import needs. 

Georgia  started  implementing  in  early  1995  strict  monetary  policies,  and  succeeded  in 
bringing inflation  down to  an average 4% monthly in  1995, compared  with  a 66% monthly 
rate in  1994. The budget  deficit  was  contained  at  7% of GDP.  Output  continued  however 
to  decline  by  an  estimated  5%  of  GDP.  The  country's  external  position  remains  highly 
uncertain.  Last  year's  current  account  deficit,  at  about  16% of  GDP,  and  important  debt 
repayment  obligations  falling  due  could  not  be  properly  financed,  thus  leading  to  an 
accumulation  of  arrears  towards  the  country's  main  suppliers  and  creditors.  The  situation 
improved  somewhat  over  the  last  quarter  following  the  successful  introduction  of  a  new 
currency  which  triggered  hard  currency  inflows  and  an  increase  of  the  reserves  position, 
from  a very low level, to up to  150 million US$, or almost three months of imports, by end-
December  1995. 

Tajikistan  was  the, last  among  the  three  countries  to  initiate  reforms.  In  early  199:>  prices 
were  partially  adjusted,  and  a new currency, the Tajik  rouble, was introduced.  The  current 
account  improved  dramatically  from  a  considerable  deficit  in  1994  to  overall  balance  in 
1995.  However,  reforms  were  timid,  monetary  growth  continued  at  a  high  pace,  inflation 
increased  over  600% in  1995 and  GDP  continued  to  decline, by about  12%. In  early  1996 
the  authorities  launched  a more  ambitious  package  of  stabilization  and  structural  reforms. 
Tajikistan,  which has no hard  currency reserves, is in a situation of arrears towards its main 
creditors  and,  given  the  high  relative  burden  of  its  external  debt  (150%)  of  GDP),  heavily 
relies  on  rescheduling  arrangements  or  new  official  grants,  to  meet  its  external  financing 
needs in  1996 and  1997. 

In  order  to  cover  their  basic  needs  over  the  last  three  years  Armenia,  Georgia  and 
Tajikistan  have  had  recourse  to  international  humanitarian  assistance,  out  of  which  the 
Community  has  provided  the  biggest  share,  (under  ECHO  and  exceptional  food  aid 
programmes). 

Armenia,  Georgia  and  Tajikistan,  owing to their  external  financing  needs  and  lack  of hard 
currency  reserves,  have  accumulated  substantial  arrears  vis-à-vis  their  creditors  and 
suppliers, including vis-à-vis the Community  (for  a global outstanding  amount  in arrears  of 
some  ECU  223  million  including  late  interest)  on  commercial  credits  to  finance  food  and 
medical  imports  allocated  in  1992.  However  the  Armenian  and  Georgian  authorities  have 
recently undertaken formally  to fully  service their outstanding  debts (some ECU  61 million 
for Armenia and ECU  128 million for  Georgia including arrears) towards the Community in 
the context of the new arrangements with the IMF. 

Status of IMF programmes  on Armenia, Georgia and  Tajikistan 

On  28  June,  1995, the  IMF Board  approved  stand-by  arrangements  in favour  of  Armenia 
and  Georgia,  to  support  both  countries'  ambitious  programmes  of  stabilisation  and 
structural reforms.  The IMF programmes were approved  despite remaining financing  needs 
of  the  balance  of  payments,  leading  to  arrears  accumulation.  The  first  reviews  were 
completed in September, with both countries remaining on-track. 

The IMF Board  approved  on  14 February  1996 an Enhanced  Structural Adjustment  Facility 
(ESAF)  programme  on Armenia  in the  amount  of the  equivalent  of US$  150 million  over 
three years. A similar ESAF programme on Georgia was approved by the IMF Board  on 28 
February  1996, for the equivalent of US$ 245 million over three years. 

On 8 May  1996, the IMF board  approved  a 7-month  US$ 22 million equivalent  first  credit 
tranche  arrangement  in  favour  of  Tajikistan.  An  upper  credit  tranche  arrangement  and  a 
multi-year  ESAF  programme  are  expected  to  follow,  provided  the  authorities  agree  to 
implement further  key stabilization and structural adjustment  measures. 

The proposed  exceptional  assistance 

The  Commission  considers  the  Armenian  and  Georgian  macro-economic  programmes  as 
being  comprehensive  and  ambitious.  These  programmes,  if  fully  implemented,  should 
ensure the necessary macro-economic  stabilisation  and, by the means of structural  reforms, 
establish  the  core  frame  of  market  economies.  An  improved  economic  and  financial 
situation would  also be an important  element of political and social stability in the region. 

However,  without  additiona'  external  assistance,  these  countries  will  not  be  able  to  meet 
their international financial obligations, and current programmes of reforms would  be put in 
jeopardy.  Furthermore,  any further  tightening  of  the  authorities'  programmes  would  put  a 
strain on the already very difficult  social situation. 

Armenia,  Georgia  and  Tajikistan,  as  low  income  countries,  are  eligible  for  World  Bank 
lending  at highly concessional  IDA (International Development  Association)  conditions,  as 
well  as  for  IMF  ESAF  lending,  the  concessional facility  of  the  Fund.  Owing  to  their  dire 
economic  situation  and to their  extremely vulnerable balances of payments, these  countries 
should  be  supported  with  highly  concessional  assistance.  This  view  is  shared  by  the 
Monetary  Committee. 

Throughout  the  1993  -  early  1996  period,  the  bulk  of  the  Community  assistance  to  these 
countries was provided  in the form  of grants under humanitarian  programmes,  in particular 
in the  context  of the two  important  food  aid  operations  of the Winter  periods  1994-1995 
and  1995-1996.  In November  1995  the  Ecofin  Council  had  an  exchange  of  views  on  the 
situation  of  Armenia,  Georgia  and  Tajikistan,  and  invited  the  Commission  to  make  the 
necessary proposals. 

Owing to  the  exceptionally  harsh  conditions presently  faced  by Armenia  and  Georgia,  the 
Commission  considered  that  exceptional  assistance  in  the  form  of  straight  grants  was 
required  to  support  the  implementation  of  the  stabilisation  and  structural  reform 
programmes  of  these  countries  as  agreed  with  the  IMF.  The  Commission  considered 
furthermore  that  Tajikistan  should  also be  made  eligible to  this  assistance  but  only  on  the 
proviso  that  the  authorities  formally  undertake  to  fully  servicing  their  outstanding  debt 
obligations towards  the  Community,  and  that  they implement  a comprehensive  adjustment 
and reform  programme in the context  of upper-credit tranche and ESAF arrangements with 
the IMF1. 

Consequently,  and  on  account  of the  constraints  established  by Category  4  of  the  present 
financial  perspective,  the  Commission  proposed  on  28  March  1996  a  revision  of  this 
financial perspective  to  make room  for  the  financing  of this  action  for  an  amount  of up  to 
ECU  170 million.  However,  owing to  constraints in the  Community  budget,  the  budgetary 
authority  could  not  go  along  with  this  proposal  or  with  any  adjustment  of  the  ceiling  of 
Category 4 of the present financial  perspective. 

In  the  circumstances,  the  Commission  is  now  proposing  that  consistent  with  the  present 
ceiling  of  Category  4  the  financial  perspective,  the  Community  makes  available  to  the 
beneficiary  countries exceptional financial  assistance in the form  of: 

-  long-term loans for  a maximum amount  of ECU  170 million with a maximum maturity  of 

fifteen years; 

-  straight grants of up to ECU 50 millions to be financed  by the general budget. 

The  loan  component  of  this  assistance  would  be  funded  through  Community  market 
borrowing  with  a  guarantee  by  the  general  budget.  The  beneficiary  countries  would 
subsequently  borrow  from  the  Community.  The  borrowing  and  lending  operations  would 
be  perfectly  matched  and  without  any  commercial  risk  for  the  Community.  In  accordance 
with  the  Guarantee  Fund  mechanism  the  budgetary  implications  of  a  decision  to  make 
available loans of up to ECU  170 million to the beneficiary  countries would  be a ECU  25.5 
million provisioning of the Fund to be drawn from  the  1996 reserve for  guarantees  relating 
to external actions. 

As for  the grant  component  of this assistance  and without  prejudice  to  the  competences  of 
the budgetary  authority,  the Commission considers that given the constraints established by 
the  present financial perspective,  this part  of the exceptional  assistance  cannot  be financed 
in  1996  and  would  have  to  be  implemented  in  five  equal  annual  instalments  of  ECU  10 

1 

It should be noted in this respect however that the political situation in Tajikistan  remains very fragile, 
with persistence of civil hostilities, and that it is therefore  highly uncertain,  whether  the country will 
actually  be  able  to  implement  the  necessary  economic  reforms,  for  which  a  peaceful  settlement  of 
internal conflicts is essential. 

million, from  1997 onwards by redeployment, within the existing limits of Category 4 of the 
financial  perspective for the 1997-1999 period. 

The Commission accordingly requests the Council to adopt the attached proposal. 

Proposai for a 

COUNCIL DECISION 

providing exceptional financial assistance 

for Armenia, Georgia and, if appropriate, Tajikistan 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
235 thereof, 

Having regard to the proposal of the Commission1, 

Having regard to the opinion of the European Parliament2, 

Whereas  the  Commission  has  consulted  the  Monetary  Committee  before  submitting  its 
proposal; 

Whereas Armenia and Georgia are undertaking fundamental political and economic reforms 
and  are  making  substantial  efforts  to  implement  a  market  economy  model;  whereas 
Tajikistan is expected to implement similar stabilisation and structural change policies; 

Whereas  trade,  commercial  and  economic  links  will  develop  between  the  Community, 
Armenia  and  Georgia  within  the  framework  of  the  Partnership  and  Cooperation 
Agreements signed on April 22, 1995; 

Whereas Armenia and Georgia agreed with the International Monetary Fund (IMF) in 1994 
on a first set of stabilisation and policy reform measures which was supported by the IMF's 
Systemic  Transformation  Facility,  and  whereas  the  IMF  Board  approved  in  June  1995 
Stand-by  Arrangements  in  support  of  further  ambitious  stabilisation  and  structural 
adjustment reforms, for the period July 1995 - June 1996; 

Whereas  the  IMF  board  approved  in  February  1996  a  three-year  Enhanced  Structural 
Adjustment Facility (ESAF) at concessional terms for Armenia and Georgia, in replacement 
of the current stand-by arrangements; 

Whereas the Armenian and Georgian authorities have formally undertaken to fully  service 
their outstanding financial obligations towards the Community; 

Whereas  the  authorities  of  Armenia  and  Georgia  have  requested  exceptional  financial 
support from the Community; 

1 

0Jn°... 

2  OJ n°... 

Whereas Tajikistan  implemented in  1995 and early  1996 important budgetary  and monetary 
stabilisation measures and whereas a first credit tranche arrangement  with this country  was 
approved  by  the  IMF  Board  in  May  1996; whereas,  subject  to  a  peaceful  settlement  of 
internal conflicts,  further  policy discussions of the IMF and the World  Bank with the  Tajik 
authorities,  and  complementary  financing  assurances  from  the 
international  donor 
community, the IMF management  is expected to recommend the conclusion with  Tajikistan 
of  a multi-year  programme  of  adjustment  and  reform  to  be  supported  by  an  upper  credit 
tranche stand-by and concessional facilities under an ESAF arrangement; 

Whereas  Armenia,  Georgia  and  Tajikistan  are  low  income  countries  and  are  facing 
particularly  critical  economic  and  social  circumstances;  and  whereas  these  countries  are 
eligible to highly concessional loans from the World Bank and the IMF; 

Whereas  concessional  financial  assistance  from  the  Community  in  the  form  of  long-term 
loans and  straight  grants is an appropriate measure to help the beneficiary  countries  at  this 
critical juncture  by  supporting  the  policy  objectives  attached  to  their  governments'  reform 
efforts  and alleviating the social cost of adjustment  measures; 

Whereas this assistance is exceptional and only justified  on account  of the particularly harsh 
economic and social conditions presently faced  by the beneficiary  countries; 

Whereas  the  inclusion  of  a grant  component  in this  assistance  is without  prejudice  to  the 
competences of the budgetary  authority; 

Whereas this assistance should be managed by the Commission; 

Whereas the Treaty  does not  provide,  for  the adoption  of this decision,  powers  other  than 
those of Article 235, 

HAS DECIDED AS FOLLOWS  : 

Article 1 

1.  The  Community  shall  make  available  to  Armenia  and  Georgia  exceptional  financial 
assistance,  in  the  form  of  long-term  loans  and  straight  grants,  with  a  view  to 
supporting  the  governments'  reform  efforts  and  alleviating  the  social  hardship  of  the 
accompanying austerity measures. 

2.  Tajikistan  will  be  made  eligible  to  this  assistance  on  the  condition  that:  (i)  the  Tajik 
authorities  have  formally  undertaken  to  fully  service  their  outstanding  financial 
obligations  towards  the  Community;  and  (ii) the Board  of the  IMF  has  agreed  on  an 
upper-credit tranche arrangement with  Tajikistan. 

3.  The loan component  of this assistance  shall amount to  a maximum principal  of ECU 
170  million,  with  a maximum maturity  of  15 years.  To  this  end,  the  Commission  is 
empowered  to  borrow,  on  behalf  of  the  European  Community,  the  necessary 
resources that will be placed at the disposal of the beneficiary  countries in the form of 
loans. 

4.  The grant component of this assistance will consist of an annual amount of up to ECU 

10 million for the  1997-2001 period. 

5.  The  Community financial assistance  shall  be  managed  by  the  Commission  in  close 
consultation with the Monetary Committee  and taking into  account  the provisions  of 
any agreement reached between the IMF and the beneficiary countries. 

6.  The implementation of this assistance is conditional upon full servicing by the recipient 

countries of their outstanding financial obligations towards the Community. 

Article 2 

1.  Subject to the provisions of Article  1, the Commission is empowered to agree with the 
authorities  of  the  beneficiary  countries  the  specific  amounts  and  terms,  and  the 
conditions attached to this assistance. 

2.  The Commission  shall verify,  in consultation with the Monetary  Committee,  that the 
policies  in  the  recipient  countries  are  in  accordance  with  the  objectives  of  this 
assistance and that its conditions are being fulfilled. 

Article 3 

1.  Subject to the provisions of Article 2, the loans and the grants shall be made available 

in successive instalments. 

2.  The funds shall be paid to the central banks of the recipient countries. 

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 a beneficiary  country 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  of  the  beneficiary  countries,  and  where  circumstances  permit  an 
improvement  in the  interest  rate  on the  loans,  the  Commission  may  refinance  all  or 
part  of  its  initial  borrowings  or  restructure  the  corresponding financial conditions. 
Refinancing  or  restructuring  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  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 

operations under this Decision shall be borne by the beneficiary countries. 

5.  The Monetary  Committee  shall  be kept  informed  of  developments  in the  operations 

referred to in paragraphs 2 and 3 at least once a year. 

Article 5 

At least  once  a year, the Commission  shall address to the European Parliament and to the 
Council a report, which will include an evaluation, on the implementation of this Decision. 

Done at 

, 

For the Council 

The President 

FINANCIAL RECORD 

1.  Title of Operation 

Exceptional financial assistance to Armenia, Georgia and, if appropriate,  Tajikistan. 

2.  Budget heading involved 

-  Grant component of the assistance 

Article  (...)Exceptional  financial  assistance to  Armenia,  Georgia  and  if  appropriate 
Tajikistan,  (to be created through an amending and/or supplementary Budget). 

-  Loan component of the assistance  : 

Article  (...)  reflecting  the budget  guarantee  for  the  Community  loan  facility  (to  be 
created through an amending and/or supplementary Budget). 

3.  Legal basis 

Article 23 5 of the Treaty 

Proposal for  a Council Decision providing exceptional financial assistance to  Armenia, 
Georgia and, if appropriate,  Tajikistan. 

4.  Description and Justification  for the action 

a) 

b) 

Description of the action 
Provision of Community loans (to be financed by Community borrowings in the 
international  capital  markets),  in  the  amount  of  up  to  ECU  170  million  and 
grants  of up to  ECU  50 million (to be financed by the  General  Budget),  to  the 
beneficiary  countries  with  a  view  to  supporting  their  governments'  reform 
efforts  and alleviating the social hardship of austerity measures. 

Justification for  the action 
The  sustainability  of  the  beneficiary  countries'  economic  reforms  heavily 
depends  on  external financial assistance  from  official  sources,  at  concessional 
terms. 

5.  Classification  of the Expenditure 

-  Grant component  : non obligatory,  differentiated. 

-  Loan component :  obligatory 

6.  Nature of the expenditure 

-  Straight  grants  (100%  subsidy),  which  would  be  released  in  successive 

instalments, possibly in the form of interest rate subsidies. 

-  Potential  activation of budget guarantee for the Community borrowing  aimed 

to fund  the loans. 

10 

7.  Financial impact 

a)  Method  of calculation 

-  The  evaluation  of the  amounts  of the  assistance deemed  necessary  is based 
on  the  present  estimates  of  the  beneficiary  countries'  residual  external 
financing needs 

-  For  the  loan  component  of the  assistance,  a  token  entry  is  proposed  given 
that  the  amount  and  timing  of  any  call  on  this  budget  line  cannot  be 
calculated  in  advance  and  because  it  is  expected  that  the  budget  guarantee 
will not be called. 

b) 

Effect  of the action on intervention credits 

The budget  entry  corresponding  to  the grant  component  of the  assistance  will 
be  activated  subject  to  compliance  with  a  number  of  policy  conditions  to  be 
agreed with the authorities of the beneficiary  countries. 

The budget entry reflecting  the budget guarantee for  the loan component  of the 
assistance will be activated only in the case of an effective  call on the guarantee. 

c) 

Financing  of intervention expenditure 

(i)  Grants 

The  financing  of  the  expenditure  will  be  secured  in  five  equal  annual 
instalments from  1997  onwards  through  redeployment  within  the  limits  of 
Category 4 of the present Financial Perspective for the  1997-1999 period. . 

The following  schedule of appropriations is proposed  (in current ECU): 

1997 

1998 

1999 

2000 

2001 

Commitment 
appropriations 

10 

10 

10 

10 

Payment  appropriations 

10 

10 

10 

10 

10 

10 

(ii)  Eventual  call on the budget guarantee 

-  Recourse  to  the  Guarantee  Fund  established  by  Council  Regulation 

- 

- 

(EC, EURATOM) n° 2728 of 31 October  1994. 
In  case  the  Guarantee  Fund  did  not  contain  sufficient  resources, 
additional  payments would  be called up from  the budget  by transfer,  by 
reutilisation  of  reimbursed  amounts  (Article  27(3)  of  the  Financial 
Regulation of  1977), or by amending and/or supplementary  Budget. 
In  order  to  fulfil  its  obligations,  the  Commission  can  provisionally 
ensure the debt service with funds from its treasury.  In that  case, Article 
12 of the Council Regulation  (EEC, Euratom)  n°  1552/89  of  29.5.1989 
will apply. 

11 

8.  Fraud prevention measures 

The funds  will be paid  directly to the  Central Banks  of the beneficiary  countries  only 
after  verification  by  the  Commission  Services,  in  consultation  of  the  Monetary 
Committee  and  in  liaison  with  the  IMF  and  World  Bank  Services,  that  the  macro-
economic policies implemented in these countries are satisfactory  and that the  specific 
conditions attached to this assistance are  fulfilled. 

9.  Elements of cost-effectiveness  analysis 

a) 

Grounds for  the operation and specific  objectives 

By  supporting  the  beneficiary  countries'  macro-economic  reform  efforts  and 
complementing  financing  by  the  International  Community  provided  to  these 
countries  in the  context  of IMF  agreed  programmes,  this  assistance  would  not 
only underpin their transition towards market  economy but  also  help them  fully 
servicing their  outstanding  financial  obligations towards  the  Community.  These 
outstanding obligations are presently as follows: 

Armenia:  ECU 60.7 million (arrears including late interest); 

Georgia: 

ECU  127.4  million  (including  1997  maturities,  arrears  and  late 
interest); 

Tajikistan:  ECU 67.9 million (arrears and late interest) 

Total: 

ECU 256 million 

The present  assistance will only be mobilized  on the proviso that  the  beneficiary 
countries  fully  discharge  their  outstanding  financial  obligations  towards  the 
country. 

b)  Monitoring and evaluation 

This  exceptional  assistance is of macro-economic  nature and its monitoring  and 
evaluation  are  based  on  a  satisfactory  track  record  of  the  IMF  supported 
adjustment  and  reform  programmes 
the  beneficiary  countries  are 
implementing. 

that 

The monitoring  of the  action by the Commission  services will take place  on  the 
basis of a genuine system of macro-economic  and  structural  policy indicators  to 
be  agreed  with  the  authorities  of  the  beneficiary  countries.  The  Commission 
services will also remain in close contact with the IMF and World  Bank  services 
and to benefit  from  their  assessment  of the recipient  countries'  stabilization  and 
reform  achievements. 

An  annual report  to  the European  Parliament  and  to  the  Council  is foreseen  in 
the  proposed  Council  decision,  which  will  include  an  evaluation  of  the 
implementation of this operation 

10.  Administrative  expenditure 

This  action  is exceptional  in nature  and will not  involve  an increase  in the  number  of 
Commission  staff. 

fa 

ANNEX 

BUDGETARY  RESOURCES  NECESSARY  FOR THE PROVISIONING OF THE 
GUARANTEE  FUND IN 1996 AND MARGIN UNDER THE RESERVE FOR  GUARANTEES 

(IN ECU MILLION) 

Operations 

Basis of the 
Calculation 

Provisioning of 
theFuntid) 

Reserve 
Margin 

Residual  lending 
capacity (3) 

326 

(2) 

2173 

Decided operations 

Project-related  assistance 

N 

EIB/CEEC 
EIB/MED 
EIB/PVDALA 
EIB/SOUTH AFR. 
EURATOM 

Macro-fmanciai  assistance 

Moldova-ll 
Biélorussie 

Proposed  operations 

1114 
36 
111 
120 
0 

156.0 
5.4 
15.5 
18.0 
0.0 

170.0 
164.7 
149.1 
131.1 
131.1 

15 
-20 

2.3 
-3.0 

128.9 
131.9 

Project-related  assistance 

EIB/Turkey 
EIB/Croatia 
EIB/PVDALA 

Exceptional financial  assistance 

Armenia, Georgia  and, if 
appropriate, Tajikistan 

112.5 
52.5 
410 

16.9 
7.9 
61.5 

115.0 
107.1 
45.6 

170 

25.5 

20.1 

(1)  According to the provisioning rules provided in the Council regulation (EC, EURATOM) n° 

2728/94 of 31 October  1994. After a first drawing of the Guarantee Fund, and in compliance 
with Article 5 of the Regulation, the rate of provisioning for new operations has been 
increased from  14 % to  15% in 1995. For  1996, all EIB and EURATOM operations 
approved in  1993 and  1994 have been provisioned with a 14% rate. New  macro-financial 
assistance operations  have been provisioned with a 15% rate. 

(2)  Reserve amount in  1996 under the financial perspective. 
(3)  For  100% guarantee  loans. 

1134 
1098 
994 
874 
874 

859 
879 

767 
714 
304 

134 

Ob 

ISSN 0254-1475 

COM(97) 24 final 

DOCUMENTS 

EN 

11  01 

Catalogue  number  :  CB-CO-97-019-EN-C 

ISBN 92-78-15146-7 

Office  for  Official  Publications of the European  Communities 

L-2985  Luxembourg