Proposal for a Council Regulation amending Regulation (EC) No 332/2002 establishing a facility providing medium-term financial assistance for Member States' balances of payments
Date: 2008-10-30
Institutions: European Commission
Subjects: EU Member State, balance of payments, balance of payments assistance

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 31.10.2008 
COM(2008) 717 final/2 

2008/0208 (CNS) 

CORRIGENDUM 
Annule et remplace le document COM(2008)717 final du 30.10.2008 
Ne concerne que la version EN 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 332/2002 establishing a facility providing medium-term 
financial assistance for Member States' balances of payments 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 
The  Council  regulation  (EC)  332/2002  establishes  a  facility  providing  medium-term 
financial assistance for Member States balances of payments, replacing the former instrument 
created  by  the  Council  Regulation  n°1969/88.  This  facility  implements  the  mechanism 
foreseen  by  the  Article  119  of  the  Treaty,  whereby  the  Community  can  grant  a  mutual 
assistance  to  a  Member  State  "in  difficulties  or  seriously  threatened  with  difficulties  as 
regards its balance of payments either as a result of an overall disequilibrium in its balance 
of payments or as a result of the type of currency at its disposal", provided this Member State 
does not belong to the euro area. 

2. The above mentioned regulation adopted in February 2002 lowered the threshold existing 
in the former regulation from EUR 16 billion to EUR 12 billion. This decision was consistent 
with the significant reduction in the potential number of recipients, with only three Member 
States  outside  of  the  euro  area  at  that  time.  Though  recital  n°8  mentioned  that  this  amount 
"seems apt to (…) take into account of forthcoming enlargements of the European Union", the 
evolution  of  the  international  financial  context  leads  today  to  conclude  that  it  may  not  be 
sufficient,  should  several  Member  States  need  a  significant  Community  medium  term 
financial support. It is therefore proposed to raise this ceiling to EUR 25 billion, with a view 
to increasing significantly the capacity of the European Union to answer the potential needs of 
the Member States outside of the euro area. 

3. It is also proposed to establish a specific procedure for revising the ceiling when there is an 
urgent need to take such a decision, as the existing procedure - which calls for a revision of 
the Regulation 332/2002 itself using the procedure foreseen by the Article 308 of the Treaty – 
cannot  allow  the  very  quick  reaction  that  might  be  needed  because  of  abnormally  high 
disturbances on the markets. The Commission should be habilitated by the Council to decide a 
revision  of  the  ceiling,  after  having  received  the  opinion  of  the  Economic  and  Financial 
Committee  (EFC)  on  both  the  urgent  need  to  do  it  and  the  new  ceiling  to  introduce.  The 
normal procedure of revision of the ceiling would therefore be maintained when there is no 
need  for  an  urgent  change  or  when  the  EFC  objects  to  the  use  of  the  urgent  procedure  or 
disagree with the new amount to introduce as ceiling.  

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2008/0208 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 332/2002 establishing a facility providing medium-term 
financial assistance for Member States' balances of payments 

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  Commission1  presented  following  consultation  with 
the Economic and Financial Committee, 
Having regard to the opinion of the European Parliament2, 

Having regard to the opinion of the European Central Bank, 

Whereas: 

(1) 

(2) 

'The  large  number  of  Member  States  outside  the  euro  area  and  the  possibility  that 
several  of  them  could  need  Community  medium  term  financial  assistance  in  the 
context  of  the  current  global  financial  crisis  calls  for  a  significant  increase  of  the 
ceiling for the outstanding amount of loans to be granted to Member States laid down 
in Regulation (EC) No 332/2002  

An  ad  hoc  procedure  should  be  foreseen  for  future  revisions  of  that  ceiling,  with  a 
view to improving the capacity of the Community to react quickly to major changes in 
the financial environment affecting the total amount of support potentially needed by 
the Member States. 

(3) 

Regulation (EC) No 332/2002 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 of Regulation (EC) No 332/2002 is amended as follows: 

In paragraph 1, the second subparagraph is replaced by the following : 

Article 1 

"The outstanding amount of loans to be granted to Member States under this facility shall be 
limited to EUR 25 billion in principal."; 

The following paragraph 3 is added: "Where  a  serious  deterioration  of  the  financial 
environment calls for urgent Community medium term financial assistance to several Member 
States, the Commission may decide a revision of the ceiling after having received the opinion 
from  the  Economic  and  Financial  Committee  as  regards  both  the  urgent  need  to  revise  the 

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OJ C , , p. . 
OJ C , , p. . 

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ceiling  and  the  revised  ceiling  itself.  The  new  ceiling  shall  enter  into  force  on  the  day 
following that of its publication in the Official Journal of the European Union '. 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

Article 2 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, XX December 2008 

For the Council 
The President 

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