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: 2009-04-08
Institutions: European Commission
Subjects: EU Member State, balance of payments, balance of payments assistance

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.4.2009 
COM(2009) 169 final 

2009/0053 (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 

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2009/0053 (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  Commission,  submitted  following  the  consultation 
with the Economic and Financial Committee1, 
Having regard to the opinion of the European Parliament2, 
Having regard to the opinion of the European Central Bank3, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The  scope  and  intensity  of  the  international  financial  crisis  affects  the  potential 
demand  for  Community  medium-term  financial  assistance  in  the  Member  States 
outside  the  euro  area  and  calls  for  considerable  increase  in  the  ceiling  laid  down  in 
Regulation  No  (EC)  332/20024  for  the  outstanding  amount  of  loans  to  be  granted  to 
them from EUR 25 billion to EUR 50 billion. 

In  the  light  of  recent  experience  gained  in  the  functioning  of  medium-term  financial 
assistance,  the  respective  tasks  and  responsibilities  of  the  Commission  and  the 
Member  States  concerned  with  the  implementation  of  the  Regulation  should  be 
clarified.  In  addition,  the  conditions  for  granting  the  financial  assistance  should  be 
spelled  out  in  a  memorandum  of  understanding  to  be  negotiated  between  the 
Commission and the Member State concerned.  

The rules guiding some aspects of the financial management of Community financial 
assistance  should  be  clarified.  For  operational  reasons,  the  Member  State  concerned 
should be asked to place the financial assistance received in a special account with the 
National  Central  Bank  and  to  transfer  the  amounts  due  in  an  account  with  the 
European Central Bank a few days prior to their due dates.  

Sound  management  of  the  Community  financial  assistance  received  is  of  paramount 
importance.  Therefore,  the  possibility  for  the  European  Court  of  Auditors  and  the 
European  Anti-Fraud  Office  to  carry  out  controls  when  they  deem  necessary  is 
provided  for  by  the  existing  loan  agreements  and  should  be  laid  down  in  this 
Regulation.  

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OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ L 53, 23.2.2002, p. 1. 

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(5) 

This  Regulation  should  apply  immediately  to  all  new  loan  agreements  and  to  the 
existing loan agreements if and when they are revised. 

(6) 

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

HAS ADOPTED THIS REGULATION: 

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

1. 

The second subparagraph of Article 1(1) 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 50 billion in principal." 

2. 

Article 3(2), is replaced by the following: 

"The Member State concerned shall discuss with the Commission an assessment of 
its  financial  needs  and  submit  a  draft  adjustment  programme.  The  Council,  after 
examining  the  situation  in  the  Member  State  seeking  medium-term  financial 
assistance  and  the  adjustment  programme  presented  in  support  of  its  application, 
shall decide, as a rule during the same meeting: 

(a)  whether  to  grant  a  loan  or  appropriate  financing  facility,  its  amount  and  its 

average duration;  

(b) 

(c) 

the  economic  policy  conditions  attaching  to  the  medium-term  financial 
assistance  with  a  view  to  re-establishing  or  ensuring  a  sustainable  balance  of 
payments situation;  

the  techniques  for  disbursing  the  loan  or  financing  facility,  the  release  or 
drawing-down  of  which  shall,  as  a  rule,  be  by  successive  instalments,  the 
release of each instalment being subject to verification of the results achieved 
in implementing the programme in terms of the objectives set.". 

3. 

The following Article 3a is inserted: 

"Article 3a 

The Commission and the Member State concerned shall conclude a memorandum of 
understanding detailing the conditions laid down by the Council." 

4. 

Article 5 is replaced by the following: 

"1.The Commission shall take the necessary measures to verify at regular intervals, 
in  collaboration  with  the  Economic  and  Financial  Committee  that  the  economic 
policy  of  the  Member  State  in  receipt  of  a  Community  loan  accords  with  the 
adjustment  programme  and  with  any  other  conditions  laid  down  by  the  Council 
pursuant  to  Article  3.  To  this  end,  the  Member  State  shall  place  all  the  necessary 
information at the disposal of the Commission and cooperate in full with the latter. 
On the basis of the findings of such verification, the Commission, after the Economic 
and  Financial  Committee  has  delivered  an  opinion,  shall  decide  on  the  release  of 
further instalments. 

The  Council  shall  decide  on  any  adjustments  to  be  made  to  the  initial  economic 
policy conditions." 

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5. 

In Article 7 the following paragraph 5 is added: 

"5.  The  Member  States  concerned  shall  open  a  special  account  with  its  National 
Central  Bank  for  the  management  of  the  Community  medium-term  financial 
assistance  received.  The  Member  State  concerned  shall  transfer  the  principal  and 
interest  due  under  the  loan  to  an  account  with  the  European  Central  Bank  seven 
TARGET25 business days prior to the corresponding due dates." 

6. 

The following Article 9a is inserted: 

" Article 9a 

The  European  Court  of  Auditors  shall  have  the  right  to  carry  out  any  financial 
controls  or  audits  that  it  considers  necessary  in  relation  to  the  management  of  this 
assistance.  The  Commission,  including  the  European  Anti-Fraud  Office,  shall  have 
the  right  to  send  its  own  officials  or  duly  authorised  representatives  to  carry  out 
technical or financial controls or audits that it considers necessary in relation to the 
management of the Community medium-term financial assistance." 

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,  

For the Council 
The President 

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As defined in the Guideline ECB/2007/2 of 26 April 2007 on a Trans-European Automated Real-time 
Gross settlement Express Transfer system (TARGET2) (OJ L 237, 8.9.2007, p. 1). 

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