Proposal for a Council Decision providing exceptional Community financial assistance to Kosovo
Date: 1999-11-16
Institutions: European Commission
Subjects: EU aid, European Agency for Reconstruction, Kosovo, economic reconstruction, financial aid

C 56 E/66

EN

Official Journal of the European Communities

29.2.2000

Proposal for a Council Decision providing exceptional Community financial assistance to Kosovo

(2000/C 56 E/15)

COM(1999) 598 final (cid:151) 1999/0240(CNS)

(Submitted by the Commission on 19 November 1999)

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 from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the following:

(1) The Commission has

consulted the Economic
Financial Committee before submitting its proposal;

and

(2) The Security Council of

the United Nations adopted
Resolution 1244 (1999) on 10 June 1999 aiming to
promote the establishment, pending a final settlement,
of substantial autonomy and self-government in Kosovo
within the Federal Republic of Yugoslavia;

(7) UNMIK, and particularly its Pillar IV, has made significant
progress in establishing an economic framework and aims
at continuing and enhancing this strategy;

(8) UNMIK is currently establishing a Central Fiscal Agency
to
providing transparent and accountable procedures
manage the Kosovo budget;

(9) Given the present unfavourable circumstances and on the
basis of estimates from UNMIK presented in agreement
it will be
with the International Monetary Fund (IMF),
necessary for Kosovo to obtain external
to
establish a sound market economy and a civil adminis-
tration; it is estimated that exceptional external financial
assistance of some EUR 115 million would be needed
until end-2000;

support

(10) UNMIK has presented a request for exceptional financial

assistance;

(11) Kosovo is not in a position to borrow either domestically
or abroad and whereas it is not eligible for membership of
the International Financial Institutions and may therefore
not benefit from their conventional support programmes;

(3) The International Community, based on the Resolution
1244 (1999), has
security
presence (KFOR) and an interim civil administration (cid:151)
the United Nations Interim Administration Mission in
Kosovo (UNMIK);

set up an international

(12) Kosovo is at a low level of development and whereas its
GDP per capita is estimated to be one of the lowest in
Europe;

(4) UNMIK aims at establishing administrative structures
under which the people of Kosovo can enjoy substantial
autonomy and to this end has been vested with all legis-
lative and executive powers, including the administration
of the judiciary;

(13) Financial assistance from the Community in the form of
straight grants to be made available to UNMIK in support
of the Kosovo people is an appropriate measure to help
ease Kosovo’s financial constraints in the current excep-
tionally difficult circumstances;

(5) UNMIK is taking steps to involve the main political parties
and ethnic communities of Kosovo and its activities;

(14) Without prejudice to the powers of the budgetary auth-
ority, the financial assistance will be part of the envelope
of aid foreseen for Kosovo in 2000, and therefore subject
to the funds being available in the general budget;

(6) UNMIK consists of

four components ((cid:145)Pillars(cid:146)) and the
European Union (EU) has taken the lead role (1), for the
fourth Pillar responsible for economic reconstruction;

(15) The exceptional financial assistance should be managed by

the European Commission;

(1) International civil presence in Kosovo: Report of

the Secretary-
General pursuant to Paragraph 10 of Security Council Resolution
1244 (1999), S/1999/672, 12 June 1999, II. 5.

(16) The Treaty does not provide, for the adoption of this

decision, powers other than those of Article 308,

29.2.2000

EN

Official Journal of the European Communities

C 56 E/67

HAS DECIDED AS FOLLOWS:

Article 1

1.
The Community shall make available to UNMIK excep-
tional financial assistance in the form of straight grants of up
to EUR 35 million, with a view to alleviating the financial
situation in Kosovo, comforting the establishment of essential
administrative functions and supporting the development of a
sound economic framework.

2.
This assistance shall be managed by the Commission in
close consultation with the Economic and Financial Committee
and in a manner consistent with agreements or understandings
reached between the IMF and UNMIK or any other inter-
nationally recognised authorities of Kosovo.

Article 2

The Commission shall verify at

in
2.
consultation with the Economic and Financial Committee and
in liaison with the IMF and the World Bank, that economic
policies in Kosovo respect the objectives and economic policy
conditions of this assistance.

intervals,

regular

Article 3

1.
The assistance shall be made available to UNMIK in at
least two instalments on the basis of a successful completion of
the economic policy conditions referred to in Article 2(1). The
second tranche shall not be released before two months after
the release of the first tranche.

2.
The funds shall be made available to UNMIK through the
Central Fiscal Agency exclusively in support of the Kosovo
budgetary needs.

The Commission is empowered to agree with UNMIK,
1.
after consultation with the Economic and Financial Committee,
the economic conditions attached to this assistance. These
conditions shall be consistent with any agreement referred to
in Article 1(2).

Article 4

The Commission shall address to the European Parliament and
to the Council a report by the end of 2000, which will include
an evaluation on the implementation of this Decision.