Commission staff working document accompanying the report from the Commission to the budgetary authority on guarantees covered by the general budget - Situation at 31 December 2008 {COM(2009) 398 final}
Date: 2009-07-30
Institutions: European Commission
Subjects: Community loan, EU Member State, budgetary reserve (EU), general budget (EU), investment protection, report, third country

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 30.7.2009 
SEC(2009) 1063 final 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

REPORT FROM THE COMMISSION 

to the budgetary authority on guarantees covered by the general budget  
situation at 31 December 2008 

{COM(2009) 398 final} 

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TABLE OF CONTENTS 

1. 

Explanatory notes on the situation of risks covered by the Budget ............................. 3 

1.1. 

Tables A1 and A2......................................................................................................... 3 

1.1.1.  Authorised ceiling (Table A1) ..................................................................................... 3 

1.1.2.  Capital outstanding (Table A1).................................................................................... 4 

1.1.3.  Annual risk (Table A2) ................................................................................................ 4 

1.2. 

1.3. 

Loan operations covered by the Budget guarantee ...................................................... 7 

Evolution of risk......................................................................................................... 11 

1.3.1.  Situation of loans to Member States .......................................................................... 11 

1.3.2.  Situations of loans to third countries.......................................................................... 12 

1.4. 

Payment under the Budget guarantees ....................................................................... 13 

1.4.1.  Borrowing/lending operations.................................................................................... 13 

1.4.2.  Guarantees given to third parties................................................................................ 14 

1.4.3.  Activation of Budget guarantees................................................................................ 14 

2. 

Country-risk evaluation.............................................................................................. 16 

2.1. 

Candidate countries.................................................................................................... 17 

2.1.1.  Turkey ........................................................................................................................ 17 

2.2. 

Potential candidate countries...................................................................................... 18 

2.2.1.  Serbia.......................................................................................................................... 18 

2.2.2.  Montenegro ................................................................................................................ 19 

2.3. 

New Independent States............................................................................................. 20 

2.3.1.  Georgia....................................................................................................................... 20 

2.3.2.  Ukraine....................................................................................................................... 21 

2.4. 

Mediterranean partners............................................................................................... 22 

2.4.1. 

Jordan ......................................................................................................................... 22 

2.4.2.  Syria ........................................................................................................................... 23 

2.4.3.  Egypt .......................................................................................................................... 24 

2.4.4.  Lebanon...................................................................................................................... 25 

2.4.5.  Tunisia........................................................................................................................ 26 

2.4.6.  Morocco ..................................................................................................................... 27 

2.5. 

Other countries ........................................................................................................... 28 

2.5.1.  South Africa ............................................................................................................... 28 

2.5.2.  Brazil .......................................................................................................................... 29 

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1. 

EXPLANATORY NOTES ON THE SITUATION OF RISKS COVERED BY THE BUDGET 

1.1. 

Tables A1 and A2 

The  purpose  of  Tables  A1  and  A2  is  to  show  the  outstanding  amount  and  annual  repayments  of 
capital and interest in respect of borrowing and lending operations for which the risk is covered by 
the  Budget.  The  figures  show  the  maximum  possible  risk  for  the  Community  in  respect  of  these 
operations  and  must  not  be  read  as  meaning  that  these  amounts  will  actually  be  drawn  from  the 
Fund or the Budget. 

In these tables, figures related to “New Member States” refer to the Member States which acceded 
to the European Union on 1 May 2004 and on 1 January 2007. 

1.1.1.  Authorised ceiling (Table A1) 

This is the aggregate of the maximum amounts of capital authorised  (ceilings) for each operation 
decided by the Council. 

In order to relate it to the risk which the Budget might have to cover, account should be taken of the 
following factors which could affect it: 

Factor increasing the risk: 

•  the interest on the loans must be added to the authorised ceiling. 

Factors reducing the risk: 
•  limitation of the guarantee given to the EIB1: 

75%  of  the  total  amounts  of  loans  signed  in  the  Mediterranean  countries  based  on  the 
Mediterranean protocols of 1977 and Council Regulations 1762/92/EEC and 1763/92/EEC. 

70%  of  the  total  amounts  of  loans  signed  as  part  of  lending  operations  with  certain  non-Member 
States  authorised  by  Council  Decisions  96/723/EC,  97/256/EC,  98/348/EC  and  98/729/EC  and  a 
sharing of risk between the Community and the EIB as the Budget guarantee covers only political 
risks in some cases; 

65% of the total amounts of loans signed as part of financing operations with certain non-Member 
States authorised by Council Decisions 99/786/EC, 2000/24/EC and 2006/1016/EC, and a sharing 
of risk between the Community and the EIB as the Budget guarantee covers only political risks in 
some cases; 

•  operations  already  repaid,  since  the  amounts  concerned  are  the  maximum  amounts  of  capital 

authorised (ceilings) and not outstanding amounts; 

•  the ceilings are not necessarily taken up in full. 

Another factor to be considered is that some loans are disbursed in currencies other than the EUR. 
Due to exchange rate fluctuations, the ceiling may be exceeded when the amounts disbursed up to 
the date of the report are converted into EUR. 

1 

Within each portfolio individual EIB loans are, de facto, guaranteed at 100% until the global ceiling is reached. 

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1.1.2.  Capital outstanding (Table A1) 

This is the amount of capital still to be repaid on a given date in respect of operations disbursed. 

Compared with the previous aggregate, the amount outstanding does not include loans which have 
not yet been disbursed or the proportion of disbursed loans which have already been repaid. 

1.1.3.  Annual risk (Table A2) 

Estimated  amount  of  principal  and  interest  due  each  financial  year  by  each  country  according  to 
disbursements made until 31 December 2008. 

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TABLE A1: CAPITAL OUTSTANDING IN RESPECT OF OPERATIONS DISBURSED at 31.12.2008 (in EUR million)

Operations

MEMBER STATES
EIB (new Member States)
MFA to Bulgaria and Romania
Euratom to Bulgaria and Romania

BoP1
Hungary

MEMBER STATES - TOTAL
THIRD COUNTRIES
A. Macro-Financial Assistance
Albania
Bosnia-Herzegovina
Bulgaria 
FYROM
Georgia
Lebanon
Romania
Serbia and Montenegro
Tajikistan
Ukraine
Sub total MFA
B. EURATOM2
C. Other
EIB Pre-Accession countries
EIB Neighbourhood and Partnership countries
EIB Asia and Latin America
EIB South Africa

Sub total EIB3
THIRD COUNTRIES - TOTAL
GRAND TOTAL

Authorised
ceiling

Capital
outstanding at
30.06.2008

Capital
outstanding at
31.12.2008

Remainder
to be disbursed
at 31.12.2008

3 976
253
435

4 663

9
40

90
58

280
28
29
 534
 39

4 703
5 274
1 520
 562

16 034
12 631
17 295

3 921
140
433

2 000

6 494

9
40

85
58

280
28
15
 514
 53

5 372
5 777
1 731
 599

17 401
14 047
20 541

6 500

9
40
750
90
142
50
780
280
75
453
2 669

28 755
28 342
8 205
2 400

67 702
70 371
70 371

 782

4 500

5 282

 50

 50
 9

4 487
4 426
 662
 401

10 758
10 035
15 316

(1) By Decision 1360/2008/EC of 2 December 2008 the Council decided to increase the ceiling from EUR 12 000 million to EUR 25 000 million.

(2) The overall ceiling is EUR 4 000 million for loans to Member States and non-member States. By Decision 94/179/Euratom of 21 March 1994, the Council decided to 
extend Euratom loans to the financing of projects in certain non-member States.

(3) The subtotal EIB includes the EIB loans to Member States.

ANNEX TO TABLE A1: SITUATION IN RESPECT OF EIB OPERATIONS at 31.12.2008 (in EUR million)

Operations 

Mandate 2007/2013:
Pre-Accession countries
Neighbourhood and Partnership countries:

Mediterranean
Eastern Europe, Southern Coucasus and Russia

Asia and Latin America:

Asia
Latin America

South Africa

Previous General Mandate 2000/20075:
Pre-Accession countries
Neighbourhood and Partnership countries
Asia and Latin America
South Africa
Member States (following the accession)

sub-total 65 %3

Financial agreements (70% Guarantee rate)
Pre-Accession countries
Neighbourhood and Partnership countries
Asia and Latin America:
South Africa
Member States (following the accession)

sub-total 70 %3

Financial agreements (75% Guarantee rate)
Pre-Accession countries
Neighbourhood and Partnership countries
Member States (following the accession)

sub-total 75 %3

Financial agreements (100% Guarantee rate)
Pre-Accession countries
Neighbourhood and Partnership countries
Asia and Latin America
South Africa
Member States (following the accession)

sub-total 100 %3
Total  

Credit line
authorised

Loans made
available minus
cancellations

Amounts
disbursed

Amounts
outstanding 
at 31.12.2008

25 800
8 700
12 400
8 700
3 700
3 800
1 000
2 800
 900

20 060
10 235
6 520
2 480
825

45 860
7 477
3 770
2 310
1 022
 375

7 477
7 712
1 350
6 362

7 712
6 653
4 700
 750
 903
 300

6 653
67 702

5 943
2 397
2 570
2 400
 170
 774
 150
 624
 203

19 602
7 394
6 446
2 175
824
2 763
25 545
6 513
 477
1 617
 809
 375
3 236
6 513
7 062
 713
4 492
1 857
7 062
5 320
 29
 315
 710
 285
3 982
5 320
44 440

 929
 324
 279
 279

 321

 321
 5

13 617
5 005
4 444
1 626
463
2 079
14 546
5 942
 431
1 497
 663
 255
3 096
5 942
7 174
 720
4 495
1 958
7 174
5 145
 29
 84
 717
 202
4 113
5 145
32 807

 928
 324
 279
 279

 321

 321
 5

11 500
4 604
3 837
1 083
 426
1 550
12 429
2 915
 312
 737
 187
 128
1 550
2 915
1 049
 122
 844
 83
1 049
1 008
 9
 80
 141
 41
 737
1 008
17 401

(3) Percentage figures relate to the Guarantee rate.
(4) Loans to New Member States were drawn from 'Pre-Accession countries' or from 'Neighbourhood and Partnership countries' ceilings. Bulgaria and Romania are 
included in the "New Member States".

(5) Including Turkey Terra and Special Action Turkey.

5 

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Table A2: Total Annual Risk borne by the Budget in EUR million based on the amounts (capital and interest) due under all operations 

(MFA, BoP, Euratom and EIB) disbursed at 31.12.2008

Ranking

Country

2009

2010

2011

2012

2013

2014

2015

2015 until 2038 Total Outstanding

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57

Turkey
Romania
Hungary
Egypt
Morocco
Tunisia
Serbia
Bulgaria
Czech Republic
South Africa
Poland
Brazil
Croatia
Syria
Lebanon
Slovak Republic
Bosnia and Herzegovina
Jordan
The former Yugoslav Republic of Macedonia
Albania
Israel
Peru
Indonesia
Sri Lanka
Vietnam
Slovenia
Colombia
Pakistan
Russia
Argentina
Mexico
the Philippines
Ukraine
China
Georgia
Lithuania
Latvia
Montenegro
Maldives
Cyprus
The West Bank and the Gaza Strip
Ecuador
Laos
Panama
Paraguay
Algeria
Thailand
Tadjikistan
Bangladesh
Uruguay
Costa Rica
El Salvador
India
Malaysia
Estonia
Malta
Republic of Moldova
Total outstanding
Member States

 293.4
 264.5
 93.7
 208.7
 137.1
 131.2
 56.9
 96.1
 144.3
 115.2
 85.8
 80.8
 31.7
 35.6
 70.6
 66.2
 33.1
 45.8
 27.5
 13.4
 8.0
 8.3
 15.6
 4.9
 10.7
 26.2
 1.4
 10.5
 5.4
 17.7
 23.9
 7.0
 22.7
 8.6
 24.2
 6.4
 7.3
 1.5
 2.5
 9.5
 4.2
 0.6
 0.0
 1.8
 0.2
 7.1
 6.0
 1.0
 4.9
 1.6
 3.7
 2.7
 3.2
 3.1
 1.0
 0.7
 0.0
2 295.8
801.8

 308.2
 256.1
 90.8
 194.6
 140.1
 138.3
 57.4
 85.8
 81.7
 67.2
 81.3
 63.7
 31.1
 43.3
 63.5
 65.5
 31.4
 41.1
 25.4
 13.4
 8.9
 10.2
 18.9
 3.2
 14.4
 20.8
 4.2
 12.0
 4.8
 14.7
 23.6
 9.1
 6.7
 8.4
 22.7
 5.7
 6.9
 1.6
 3.0
 9.6
 4.2
 2.0
 0.0
 2.5
 0.0
 6.9
 5.0
 0.6
 4.9
 1.9
 3.7
 2.1
 3.2
 3.0
 1.0
 0.7
 0.0
2 130.9
705.8

 314.5
 269.3
2 089.9
 184.6
 146.7
 136.6
 64.4
 69.8
 72.9
 56.9
 78.8
 48.4
 39.7
 43.3
 64.1
 66.0
 31.7
 39.5
 25.1
 13.3
 10.2
 17.8
 15.1
 4.8
 14.9
 14.3
 9.9
 12.0
 4.8
 14.6
 3.3
 9.0
 6.6
 7.7
 13.8
 5.5
 6.7
 2.4
 4.5
 9.2
 4.2
 4.1
 0.2
 2.5
 3.6
 6.7
 4.6
 0.6
 4.9
 2.4
 3.7
 2.0
 3.2
 1.8
 1.0
 0.7
 0.0
4 088.4
2684.0

 344.6
 214.9
 22.5
 177.4
 148.7
 137.5
 105.6
 82.4
 70.3
 70.6
 76.3
 42.5
 42.7
 43.3
 64.0
 51.0
 55.0
 36.8
 26.9
 14.5
 10.1
 18.7
 12.4
 7.8
 14.9
 11.4
 9.9
 12.0
 7.3
 11.5
 3.3
 9.2
 6.5
 7.0
 0.0
 5.3
 5.2
 3.1
 5.3
 7.1
 4.2
 4.1
 0.4
 2.5
 7.2
 6.0
 6.3
 12.5
 4.8
 2.8
 3.7
 0.9
 3.2
 1.8
 0.5
 0.7
 0.0
2 057.3
547.7

 341.0
 214.1
 13.6
 170.6
 149.0
 140.6
 102.7
 67.8
 67.8
 43.0
 70.5
 71.0
 42.8
 41.6
 58.6
 37.2
 27.0
 30.4
 23.4
 12.5
 10.2
 18.5
 12.4
 10.5
 14.8
 9.4
 9.9
 9.1
 7.3
 11.4
 3.3
 9.6
 6.3
 7.1
 0.0
 5.1
 5.1
 3.5
 5.3
 4.6
 4.2
 4.1
 0.5
 2.5
 7.2
 5.3
 8.6
 12.2
 4.8
 3.3
 3.7
 1.3
 3.2
 0.9
 0.0
 0.3
 0.1
1 950.7
495.5

 351.2
 194.6
 9.0
 150.9
 141.4
 134.7
 110.6
 68.3
 56.4
 45.4
 53.1
 94.7
 39.4
 41.6
 40.9
 25.8
 26.4
 24.5
 25.4
 14.2
 10.4
 15.1
 12.4
 13.2
 14.6
 7.4
 9.9
 6.2
 7.3
 3.8
 3.3
 9.5
 6.2
 7.2
 0.0
 5.0
 5.0
 3.4
 5.3
 3.0
 4.2
 4.1
 0.5
 2.5
 7.2
 2.2
 2.1
 4.0
 0.0
 3.6
 0.0
 1.3
 0.0
 0.0
 0.0
 0.0
 0.1
1 828.8
427.6

 337.0
 193.7
 8.6
 150.5
 126.7
 127.9
 160.1
 64.8
 45.7
 39.6
 43.1
 204.8
 38.5
 39.4
 39.9
 15.1
 67.1
 16.9
 23.8
 14.0
 8.7
 15.1
 12.4
 13.2
 6.9
 4.4
 9.9
 6.2
 7.3
 3.8
 3.3
 7.3
 6.1
 7.3
 0.0
 4.8
 4.8
 3.3
 5.3
 0.0
 4.2
 4.1
 0.6
 2.5
 7.2
 0.0
 0.0
 0.0
 0.0
 2.8
 0.0
 1.2
 0.0
 0.0
 0.0
 0.0
 0.1
1 910.1
385.0

2 558.2
1 056.7
 6.5
 904.1
 939.5
 736.6
 536.1
 278.8
 130.0
 197.8
 142.2
 14.6
 301.8
 248.0
 106.7
 116.1
 130.4
 63.9
 82.7
 100.4
 108.4
 30.7
 29.8
 53.5
 12.6
 2.1
 37.2
 13.4
 36.2
 0.0
 13.3
 15.4
 14.6
 22.1
 0.0
 17.9
 13.9
 34.9
 17.4
 0.0
 10.2
 14.3
 34.5
 19.6
 3.6
 0.0
 0.0
 0.0
 0.0
 4.2
 0.0
 5.2
 0.0
 0.0
 0.0
 0.0
 0.6
9 216.4
1764.2

4 848.1
2 663.7
2 334.7
2 141.4
1 929.3
1 683.3
1 193.8
 813.8
 669.1
 635.6
 631.1
 620.6
 567.7
 536.1
 508.3
 442.9
 402.2
 299.0
 260.3
 195.7
 175.0
 134.4
 129.2
 111.1
 103.7
 96.1
 92.2
 81.5
 80.2
 77.5
 77.4
 76.1
 75.6
 75.3
 60.7
 55.6
 55.1
 53.8
 48.6
 43.1
 39.4
 37.3
 36.7
 36.1
 36.1
 34.2
 32.5
 30.9
 24.3
 22.6
 18.3
 16.7
 16.0
 10.7
 3.5
 3.0
 1.1
25 478.3
7811.6

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1.2. 

Loan operations covered by the Budget guarantee  

Tables A3a, A3b(1), A3b(2) and A4 

TABLE A3a
Borrowing and lending operations by the Communities to Member States 

Period 30.06.2008 to 31.12.2008
As Bulgaria and Romania joined the EU as of 01.01.2007, the outstanding amounts under the Euratom instrument are covered by the Euratom Decisions dedicated to 
the Member States.

Instrument

Decision

Date of
decision

BOP

2002/332/EC (5)

18.02.02

Hungary

2009/102/EC

1st tranche

EURATOM

77/270-271/Euratom
80/29/Euratom
82/170/Euratom
85/537/Euratom
90/212/Euratom

04.11.08
09.12.08

29.03.77
20.12.79
15.03.82
05.12.85
23.04.90

Bulgaria
     1st tranche
     2nd tranche
     3rd tranche
     4th tranche
     5th tranche
     6th tranche
     7th tranche
     8th tranche
Romania
     1st tranche
     2nd tranche
     3rd tranche

NCI

TOTAL

Loan Guarantee Maturity
term
(years)

Rate

Date

Loan
situation

Amount
decided

 - closed (a)
 - partially disbursed (b)
 - disbursed in full (c)
 - not yet disbursed (d)

Outstanding
Outstanding
amount
amount
at 30.06.2008
at 31.12.2008
in EUR million in EUR million

100%

100%

100%

09.12.2011

10.05.2021
15.01.2017
19.08.2019
18.06.2018
16.01.2019
10.09.2020
04.04.2021
23.02.2020

21.07.2022
26.11.2024
23.02.2024

100%

3

(3)

20
15
17
15
15
16
16
14

17
19
18

(6)

(d)

(b)
(c)

(c)
(c)
(c)
(c)
   (b)(4)

(c)
(c)
(c)
(c)
(c)
(c)
(c)
(c)

(c)
(c)
(c)

25 000.00

 0.00

2 000.00

6 500.00

4 000.00
 500.00
 500.00
1 000.00
1 000.00
1 000.00
 212.50

 223.50

6 830.00

2 000.00
2 000.00

 434.50

 432.50

 40.00
 13.50
 25.00
 25.00
 35.00
 30.00
 25.00
 17.50

 100.00
 90.00
 33.50

 40.00
 12.75
 25.00
 23.75
 35.00
 30.00
 25.00
 17.50

 100.00
 90.00
 33.50

35 830.00

 434.50

2 432.50

(1) Exceptional aid for the reconstruction of areas hit by the earthquake in Italy in 1980.
(2) Exceptional aid for the reconstruction of areas hit by the earthquake in Greece in 1981.
(3) Long-term loans for which the schedule of repayments depend on the dates of disbursement.
(4) By Decision 94/179/Euratom of 21 March 1994 the Council decided to extend Euratom loans to the financing of projects in certain non-member States.
(5) By Decision 1360/2008/EC of 2 December 2008 the Council decided to increase the ceiling from EUR 12 000 million to EUR 25 000 million.
(6) Decisions abrogated

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   COUNTRY

    BULGARIA III*
     1st tranche
     2nd tranche
    BULGARIA IV*
     1st tranche
     2nd tranche
    ROMANIA III*
     1st tranche
     2nd tranche
     3rd tranche
    ROMANIA IV*
     1st tranche
     2nd tranche
     3rd tranche
    BOSNIA AND HERZEGOVINA I
     1st tranche
     2nd tranche
    BOSNIA AND HERZEGOVINA II
     1st tranche
     2nd tranche
   REPUBLIC OF MOLDOVA I
     1st tranche
     2nd tranche
    REPUBLIC OF MOLDOVA II
    FYROM I
     1st tranche
     2nd tranche
    FYROM II
     1st tranche
     2nd tranche
     3rd tranche
     4th tranche

EN 

TABLE A3b (1)
 European Community (MFA) and Euratom loans to non-member States*
Changes in amounts outstanding during six-month period 30.06.2008 to 31.12.2008, broken down by countries and tranche
* Member States as of 01.01.2007
Loan
situation

Date
of decision

Amount
decided

Expiry
date

Decision

Amount
outstanding
at 30.06.2008

Loan
term
(years)

 - closed (a)
 - partially disbursed (b)
 - disbursed in full (c)
 - not yet disbursed (d)

97/472/EC

22.07.97

99/731/EC

08.11.99

94/369/EC

20.06.94

99/732/EC

08.11.99

99/325/EC

10.05.99

02/883/EC

09.11.02

94/346/EC

13.06.94

96/242/EC
97/471/EC

25.03.96
22.07.97

99/733/EC

08.11.99

10
10

10
-

7
7
7

10
10
 -

15
-

15
15

10
10
10

15
15

15
15
15
15

10.02.2008
22.12.2008

21.12.2009
-

20.11.2002
20.11.2004
23.12.2004

29.06.2010
17.07.2013
 -

22.12.2014
-

16.01.2019
09.02.2021

07.12.2004
08.08.2005
30.10.2006

27.09.2012
13.02.2008

15.01.2016
30.01.2017
04.06.2018
23.12.2018

(c)
(c)

(c)
(c)

(a)
(a)
(a)

(c)
(c)
(a)

(c)
(c)

(c)
(c)

(a)
(a)
(a)

(c)
(c)

(c)
(c)
(c)
(c)

8 

250.00
125.00
125.00
100.00
40.00
60.00
125.00
55.00
40.00
30.00
200.00  
100.00
50.00
50.00
20.00
10.00
10.00
20.00
10.00
10.00
45.00
25.00
20.00
15.00
40.00
25.00
15.00
50.00
10.00
12.00
10.00
18.00

0.00
31.25

20.00
45.00

0.00
0.00
0.00

50.00
50.00

10.00
10.00

10.00
10.00

0.00
0.00
0.00

25.00
15.00

10.00
12.00
10.00
18.00

in EUR million 

Operations in 
six-month period

Amounts
disbursed

Amounts
repaid

31.25

10.00
15.00

5.00

Amount
outstanding
at 31.12.2008

0.00
0.00

10.00
30.00

0.00
0.00
0.00

50.00
50.00

10.00
10.00

10.00
10.00

0.00
0.00
0.00

20.00
15.00

10.00
12.00
10.00
18.00

EN 

 
  
 
 
 
TABLE A3b (2)
 European Community (MFA) and Euratom loans to non-member States
Changes in amounts outstanding during six-month period 30.06.2008 to 31.12.2008, broken down by countries and tranche

   COUNTRY

Decision

Date
of decision

Loan
term
(years)

Expiry
date

Loan
situation

Amount
decided

 - closed (a)
 - partially disbursed (b)
 - disbursed in full (c)
 - not yet disbursed (d)

in EUR million

Amount
outstanding
at 30.06.2008

Operations in 
six-month period

Amounts
disbursed

Amounts
repaid

Amount
outstanding
at 31.12.2008

  UKRAINE I
  UKRAINE II
     1/2 tranche
     1/2 tranche
     2nd tranche
  UKRAINE III
     1st tranche

  UKRAINE IV
  GEORGIA
  ARMENIA
  REPS FORMER USSR
  TAJIKISTAN
     1st tranche
SERBIA AND MONTENEGRO
SERBIA AND MONTENEGRO
     1st tranche
     2nd tranche
     3rd tranche
SERBIA AND MONTENEGRO
ALBANIA
LEBANON

94/940/EC
95/442/EC

22.12.94
23.10.95

98/592/EC

15.10.98

2002/639/EC
97/787/EC
97/787/EC
91/658/EEC
2000/244/EC

12.07.02
17.11.97
17.11.97
16.12.91
20.03.00

2001/549/EC
2002/882/EC

16.07.01
09.11.02

2003/825/EC
2004/580/EC
2007/860/EC

25.11.03
29.04.04
21.12.07

10

10
10
10

10
-

15
15
3

15
15

15
15
15
 -
15

28.12.2005

29.08.2006
30.10.2006
25.09.2007

30.07.2009
-

24.07.2013
30.12.2013
28.09.1997

30.03.2016
17.10.2016

28.02.2018
01.09.2018
04.05.2020
 -
23.03.2021

UKRAINE (Euratom)

94/179/EC

21.03.94

11

15.03.2018

TOTAL

EN 

(a)

(a)
(a)
(c)

(c)
(a)
(d)
(c)
(a)
(a)
(b)
(c)
(c)

(c)
(c)
(c)
(a)
(c)
(d)

(b)

9 

85.00
200.00  
50.00
50.00
100.00
150.00
58.00
92.00
110.00
110.00
28.00
1 250.00
75.00
60.00
225.00
55.00
10.00
30.00
15.00
25.00
9.00
50.00

EUR equivalent 
of USD 83 million

0.00

0.00
0.00
0.00

29.00

57.50
0.00

28.00
225.00

10.00
30.00
15.00

9.00

39.00

768.75

0.00

0.00
0.00
0.00

14.50

14.50

57.50
0.00

28.00
225.00

10.00
30.00
15.00

9.00

16.90

16.90

3.00

52.90

78.75

706.90

EN 

 
  
 
 
 
TABLE A4

LOAN GUARANTEES TO EIB

in EUR million 

Geographical Area

Decision

Date
of decision

Rate
of guarantee

Amount
decided

Loans signed

Amount outstanding

        (minus cancellations)

at 30.06.08

at 31.12.08

at 30.06.08

at 31.12.08

MED. Financial protocols(1)

MED. Horizontal cooperation

R/1762/92/EEC

TOTAL MED. (3)

C and E Europe I

C and E Europe II

Asia, Latin America I

Asia, Latin America Interim

Asia, Latin America Interim

South Africa

New mandates

FYROM

Bosnia and Herzegovina

Turkey Terra

Mandates 2000-2007

The Baltic Sea basin of Russia

Russia, Belarus, Rep. Of Moldova and 
Ukraine

90/62/EEC(4)

91/252/EEC(5)

93/696/EC(6)

93/115/EEC

96/723/EC

96/723/EC

95/207/EC

97/256/EC(7)

98/348/EC

98/729/CE

99/786/EC

2000/24/EC(8)

2001/777/EC(9)

8.03.77

29.06.92

12.02.90

14.05.91

13.12.93

15.02.93

12.12.96

12.12.96

01.06.95

14.04.97

19.05.98

14.12.98

29.11.99

22.12.99

06.11.01

75% (2)

75% (2)

100%

100%

100%

100%

100%

70%

100%

70%

70%

70%

65%

65%

100%

100%

Date of
guarantee
contract
30.10.78/10.11.78

09.11.92/18.11.92

24.04.90/14.05.90

19.01.93/04.02.93

22.07.94/12.08.94

04.11.93/17.11.93

18.03.97/26.03.97

21.10.97

04.10.95/16.10.95

25.07.97/29.07.97

29.07.98/07.08.98

16.06.99/22.06.99

18.04.00/23.05.00

6 062

1 800

7 862

1 000

 700

3 000

 750

 153

 122

 300

7 105

 150

 100

 600

5 548

1 656

7 204

 912

 493

2 464

 571

 139

 122

 285

6 142

 150

 100

 600

5 548

1 656

7 204

 912

 493

2 464

 571

 139

 122

 285

6 142

 150

 100

 600

2005/48/EC(10)

22.12.04

19.07.00/24.07.00 (11)

06.05.02/07.05.02

19 460

 100

19 008

 85

19 002

 85

21.12.05/09.12.05

 500

 230

 230

Mandate 2007-2013

2006/1016/EC(12)

19.12.06

65%

01.08.07/29.08.07 (13)

TOTAL

27 800

69 702

3 761

42 264

5 943

44 441

 364

16 034

(1) Including EUR 1 500 million for Spain, Greece and Portugal.
(2) General guarantee of 75% for all credits made available under lending operations under a guarantee contract signed between the Community and the EIB on 30.10.78 and 10.11.78.
       By way of exception, a 100% guarantee applies to the emergency aid granted to Portugal in accordance with the Council Decision of 7 October 1975.
(3) The Community has guaranteed EUR 5 497 million, of which EUR 141.5 million is covered by a 100% guarantee for Portugal.
(4)  Poland, Hungary.
(5) Czech Republic and Slovak Republic, Bulgaria, Romania.
(6) Poland, Hungary, Czech Republic and Slovak Republic, Bulgaria, Romania, Baltic States and Albania.
(7) Central and Eastern Europe, Mediterranean, Asia and Latin America, South Africa.
(8) South-eastern Neighbours, Mediterranean countries, Latin America and Asia, Republic of South Africa, Special action Turkey, as amended (2005/47/EC).
(9) A special lending action for selected environmental projects in the Baltic Sea basin of Russia under the Northern Dimension.
(10) A special lending action for certain types of projects in Russia, Belarus,Republic of Moldova and Ukraine.
(11) Restated and amended in 2005.
(12) Pre-Accession countries, Neighbourhood and Partnership countries, Asia and Latin America, Republic of South Africa.
(13) The amount decided of EUR 27 800 million is broken down into a basic ceiling of a fixed maximum amount of EUR 25 800 million and an optional mandate of EUR 2 000 million.

 674

 455

1 129

 109

 11

 677

 129

 19

 14

 51

2 833

 114

 59

 515

9 933

 75

 1

 608

 441

1 049

 120

 9

 618

 136

 5

 11

 41

2 730

 117

 57

 524

10 976

 80

 1

 928

17 400

EN 

10 

EN 

 
  
 
1.3. 

Evolution of risk 

1.3.1. 

Situation of loans to Member States 

The  risk  towards  Member  States  should  decrease  in  future  for  the  loans  disbursed  under 
Euratom, MFA, or EIB guaranteed financing. 

However, the total risk toward Member States is increasing. This situation is explained by the 
activation of the Balance-of-Payment2 facitity in 2008. 

Hungary will reimburse in 2011 its first tranche of EUR 2 000 million disbursed in December 
2008 (included in Graph A1). 

In  addition,  one  tranche  of  EUR 2 000  million  disbursed  in  2009  for  Hungary  will  be 
reimbursed in 2014. Another tranche of EUR 1 000 million for Latvia disbursed in 2009, will 
be  reimbursed  in  2014.  These  tranches  are  not  included  in  Graph  A1  as  they  were  not  yet 
disbursed at 31 December 2008. 

Graph A1:  Total  Annual  Risk  borne  by  the  Budget  in  EUR  million  based  on  the 
amounts  (capital  and  interest)  due  under  operations  (MFA,  BoP,  Euratom  and  EIB) 
disbursed at 31.12.20083 with the Member States. (EUR million) 

3 000

2 500

2 000

1 500

1 000

500

0

MFA

ATOM

BOP

EIB

2009

2010

2011

2012

2013

2014

2015

2 
3 

Council Regulation (EC) No 332/2002 of 18 February 2002 (OJ L 53, 23.2.2002, p.1). 
As of 31 December 2008, the 2009 annual risk for Member States was EUR 802 million. 

EN 

11 

   EN 

 
                                                 
1.3.2. 

Situations of loans to third countries 

At  31  December  2008,  a  total  of  EUR 5 307 million  remained  to  be  disbursed  by  the  EIB 
under the EUR 20 060 million general mandate 2000– 2007 for third countries: 

Table A5: Disbursement forecast for EIB loans on general mandate 2000 - 2007 

Mediterranean
South-Eastern Neighbours**
Asia, Latin America
South Africa
Member States*

Ceiling

Loans made available
(minus cancellations) at
31.12.2008*

EUR million

to be disbursed

6 520
10 235
2 480
 825

20 060

6 446
7 394
2 175
 824
2 763

19 602

1 849
2 365
 192
 204
 697

5 307

* EUR 2,763 million for Member States are not included (Bulgaria, Hungary, Lithuania, Romania, Slovakia, Slovenia).
** The ceiling includes Terra Turkey and Special Action Turkey.

At  the  same  date,  an  amount  of  EUR 5 053  million  were  to  be  disbursed  under  the  general 
mandate 2007-2013. 

Table A6: Disbursement forecast for EIB loans on general mandate 2007 - 2013

A. Pre-Accession Countries
B. Neighbourhood and partnership countries
C. Asia and Latin America
D. South Africa

Ceiling

Loans made available
(minus cancellations) at
31.12.2008

EUR million

to be disbursed

8 700
12 400
3 800
 900

25 800

2 397
2 570
 774
 203

5 944

2 091
2 295
 470
 197

5 053

Graph A2: total Annual Risk borne by the Budget in EUR million based on the amounts 
(capital  and  interest)  due  under  all  operations  (MFA,  Euratom  and  EIB)  disbursed  at 
31.12.2008 with the third countries. (EUR million) 

1 550 

1 500 

1 450 

1 400 

1 350 

1 300 

1 250 

1 200 

ATOM

MFA

EIB

2009

2010

2011

2012

2013

2014

2015

*It should be noted that, following an  action  undertaken by the  Parliament, on  6  November 

EN 

12 

   EN 

 
 
 
 
 
 
2008  the  Court  of  Justice  annulled  Council  Decision  2006/1016/EC  on  the  grounds  that  it 
should have been adopted under a dual legal basis. The Court, while annulling the Decision, 
ordered “that its effects be maintained for EIB financing arrangements entered into before the 
entry into force, within a period of 12 months from the date of delivery of this judgment, of a 
new decision adopted on the appropriate legal basis, namely Articles 179 EC and 181a EC 
together”. The Commission adopted a proposal to the European Parliament and the Council to 
replace the annulled decision on 14 January 2009 COM (910) 2008. 

The  Graph A3  presents  simulations  of  some  scenarios  of  disbursements  under  the  mandates 
preceding the general mandate 2007-2013, as well as under the general mandate 2007-2013. 
The  rhythm  of  disbursements  has  a  strong  impact  on  the  amount  of  the  provisioning  of  the 
Fund in future years. 

Graph A3: Estimated outstanding amount covered by the Fund from 2009 to 2015. 

n
o

i
l
l
i

m
R
U
E

32 500

30 000

27 500

25 000

22 500

20 000

17 500

15 000

12 500

10 000

7 500

5 000

2009

2010

2011

2012

2013

2014

2015

1.4. 

Payment under the Budget guarantees4 

1.4.1.  Borrowing/lending operations 

In  this  type  of  operation,  the  Community  borrows  on  the  financial  market  and  on-lends  the 
proceeds  (back-to-back)  to  Member States  (balance  of  payments),  third  countries  (macro-
financial assistance) or utility companies (Euratom). 

The loan repayments are scheduled to match the repayments of the borrowings due from the 
Community.  If  the  recipient  of  the  loan  is  in  default,  the  Commission  must  draw  on  its 
resources to repay the borrowing on the due date. 

4 

The  Communities  have  granted  loans  and  guaranteed  loans  to  accession  countries.  Those  loans  and 
guarantees  were  covered  by  the  Guarantee  Fund  and  remain  outstanding  after  the  date  of  accession. 
From that date, they cease to be external actions of the Communities and are therefore covered directly 
by the Budget. 

EN 

13 

   EN 

 
 
 
                                                 
The funds needed to pay the Budget guarantee in the event of late payment by the recipient of 
a loan granted by the Community are raised as follows: 

a) 

b) 

c) 

the amount required may be taken provisionally from  cash resources  in  accordance 
with Article 12 of Council Regulation (EC, Euratom) No 1150/2000 of 22 May 2000 
implementing Council Decision 2007/436/EC, Euratom of 7 June 2007 on the system 
of the Communities' own resources. This method is used so that the Community can 
immediately repay the borrowing on the date scheduled in the event of late payment 
by the recipient of the loan; 

if  the  delay  reaches  three  months  after  the  due  date,  the  Commission  draws  on  the 
Fund to cover the default. The funds obtained are used to replenish the Commission's 
cash resources; 

the  transfer  procedure  can  be  used  to  provide  the  Budget  heading  with  the 
appropriations  needed  to  cover  the  default.  This  method  is  used  when  there  are 
insufficient  appropriations  in  the  Fund  and  must  be  authorised  in  advance  by  the 
budgetary authority; 

d) 

the re-use of recovered funds, if any. 

1.4.2.  Guarantees given to third parties 

The  Community  provides  a  guarantee  in  respect  of  financing  granted  by  the  EIB  under  the 
external  mandates.  When  the  recipient  of  a  guaranteed  loan  fails  to  make  a  payment  on  the 
due date, the EIB asks the Community to pay the amounts owed by the defaulting entity in 
accordance  with  the  relevant  guarantee  agreement.  The  guarantee  call  must  be  paid  within 
three  months  of  receiving  the  EIB's  request.  The  EIB  administers  the  loan  with  all  the  care 
required by good banking practice and is obliged to seek to recover the payments due after the 
guarantee has been activated. 

Since  the  entry  into  force  of  the  Regulation  establishing  the  Guarantee  Fund  for  external 
actions5,  the  provisions  of  the  Agreement  between  the  Community  and  the  EIB  on 
management  of  the  Fund  state  that,  after  the  EIB  calls  in  the  guarantee  in  the  event  of  a 
default,  the  Commission  must  authorise  the  Bank  to  withdraw  the  corresponding  amounts 
from the Fund within three months. 

If there are insufficient resources in the Fund, the procedure used for activating the guarantee 
is the same as for borrowing/lending operations, see 1.4.1 above. 

An  Implementation  Agreement  was  concluded  between  the  Community  and  the  EIB  on  20 
and  22 January  1999  to  determine  recovery  procedures  in  connection  with  Community 
guarantees  to  the  EIB.  This  agreement  was  revised  in  order  to  reflect  the  provisions  of 
Council  Decision  2006/1016/EC  of  19 December 2006  granting  a  Community  guarantee  to 
the EIB against losses under loans and loan guarantees for projects outside the Community6. 
The  new  Recovery  Agreement,  which  has  replaced  the  Implementation  Agreement  for  new 
operations, was signed by the Community and the EIB on 1 and 29 August 2007. 

1.4.3.  Activation of Budget guarantees 

If a borrower defaults on an EIB loan guaranteed by the Budget, the Community guarantee is 
called upon at the earliest three months after the date on which payment has fallen due. The 

5 

6 

Council Regulation (EC, Euratom) No 2728/94 of 31 October 1994 establishing a Guarantee Fund for 
external actions (OJ L 293, 12.11.1994, p. 1).  
OJ L 414, 30.1.2.2006, p. 95. 

EN 

14 

   EN 

 
                                                 
Community will act within three months of receiving such a letter from the EIB calling for the 
guarantee  to  be  activated,  authorising  the  EIB  to  take  the  corresponding  amounts  from  the 
Fund (see 1.4.2 above). 

For loans granted by the EC or Euratom, default interest owed by loan beneficiaries for the 
time between the date on which cash resources are made available by the Budget and the date 
of  activation  of  the  Fund  is  drawn  from  the  Fund  and  repaid  to  the  Budget.  For  EIB  loans, 
default  interest  is  calculated  during  the  period  between  the  due  date  of  a  defaulted  loan 
instalment  and  the  date  of  receipt  of  the  cash  resources  by  the  EIB  from  the  Commission. 
From the date of payment to the EIB, default interest is due to the Commission. 

EN 

15 

   EN 

 
2. 

COUNTRY-RISK EVALUATION 

Third countries other than those presented in the main report, but representing important risks 
to  the  Budget  in  2009,  notably  through  EC  macro-financial  assistance,  Euratom  loans  or 
guarantees  of  EIB  projects  related  financing,  and  either  categorised  as  “severely  indebted” 
according to criteria set by the World Bank or facing significant imbalances in their external 
or  debt  situation,  are  also  included  in  the  risk  evaluation.  The  country  risk  evaluation 
presented below comprises short analyses and tables of risk indicators. 

Explanatory notes for country-risk indicators 

Standard footnotes 

a) 

b) 

Includes  only  EC  and  EIB  loans  (outstanding  disbursements)  to  CEEC,  NIS  and 
MED. 

The higher the ranking number, the lower the creditworthiness of the country. 

Countries  are  rated  on  a  scale  of  zero  to  185;  185  represents  the  least  chance  of 
default.  A  given  country  may  improve  its  rating  and  still  fall  in  the  ranking  if  the 
average global rating for all rated countries improves. 

Abbreviations and English words used in tables 

S&P 

CCFF 

EFF 

FDI 

GDP 

SBA 

STF 

est. 

m EUR 

bn USD 

n.a. 

Standard and Poor's 

Compensatory and Contingency Financing Facility 

Extended Fund Facility 

Foreign Direct Investment 

Gross Domestic Product 

Stand-By Arrangement 

Systemic Transformation Facility 

estimates 

EUR million 

USD billion 

not available 

EN 

16 

   EN 

 
 
 
2.1. 

Candidate countries 

2.1.1.  Turkey 

In Turkey, annual GDP growth was 1.2% in real terms in 2008. The growth slump is broad-
based and is expected to continue in 2009, due to the sharp contraction in external demand, 
weak consumer and business confidence and tighter lending. Nevertheless, Turkey has proven 
relatively resilient to the global financial crisis so far, particularly in the banking sector. The 
current account deficit declined from 5.7% in 2007 to 5.6% of GDP in 2008, but is expected 
to decline below 2% of GDP in 2009, given the collapse of imports. The recent sharp decline 
of external deficits together with a reasonable roll-over of debt by the Turkish private sector 
ease concerns over external financing constraints although uncertainty remains going forward. 
Gross FDI inflows fell from 3.3% of GDP in 2007 to 2.4% of GDP in 2008. The external debt 
of the country rose slightly to 38% of GDP in 2008. Central bank reserves dropped somewhat 
in  nominal  terms  and  in  terms  of  months  of  imports  in  2008.  Turkey's  large  external  re-
financing needs are expected to feel gradually the adverse effect of the global credit squeeze. 
The  currency  has  already  been  under  heavy  pressure  and  lost  about  a  quarter  of  its  value 
against the euro in 2008. 

Count ry-risk indicat ors:

Turkey

footnotes

2006

2007

(%)
(% change)
(% of labour force)
(% ch an g e)
(TL p er  EUR)
(% of GDP)
(m EUR)
(% of GDP)
(m EUR)

(m EUR)

(m EUR)
(m EUR)
(m EUR)
(%)
(%)
(%)
(m EUR)

(m EUR)
(%)
(%)
(%)

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Real GDP growth rate
Industrial production 
Unemployment (end of period)
Inflation rate (CPI) (Dec/Dec)
Exchange rate (end of period)
Gen er al g o ver n m en t  b alan ce
Exports of goods and services
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   m EUR
   months' imports of goods and services
Convertible currency external debt
   (en d  o f  p er io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Indicat ors of  m arket 's 
percept ion of  credit w ort hiness Moody's long-term foreign currency rating (end of period)

S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
   (number of countries)
See explanatory notes at beginning of the tables.

(a) (b)  

(a)

(b)

6.9
5.8
10.5
9.7
1.86
-0.1
95 780
-6.1
15370

48490
5.0
164 013

31 927
24 797
7 130
39.2
171.2
33.3
none
none
1 972
22.6
1.2
2.1
SBA
(05/08)
yes

4.6
5.4
10.6
8.4
1.72
-1.2
105 110
-5.7
14530

53500
5.0
180 292

35 547
26 591
8 957
37.9
171.5
33.8
none
none
2 285
22.4
1.3
2.2
SBA
(05/08)
yes

2008
*estimate
*1.2
-0.9
12.3
10.1
2.15
-1.3
119 180
-5.6
10340

48440
4.1
189 116

34 694
25 952
8 742
38.3
158.7
29.1
none
none
4 848
34.5
2.6
4.1
SBA
(until 05/08)
yes

Ba3
BB-

Ba3
BB-

Ba3
BB-
03/06   09/06 03/07   09/07 03/08  09/08
69    76
72     68
71    69
(185)   (185)
(185)  (186)
(185)  (185)
03/06   09/06 03/07   09/07 03/08  09/08
71    71 

70     70

72    74
(173)    (173)

(173)    (173) (174)   (177)

EN 

17 

   EN 

 
 
 
2.2. 

Potential candidate countries  

2.2.1. 

Serbia 

In Serbia real GDP growth slowed to 6.0% in 2008. The current account deficit widened to 
18.2%  of  GDP  compared  to  16.5%  in  2007.  However,  during  the  second  half  of  2008  the 
current  account  deficit  started  to  narrow.  Serbia  became  increasingly  affected  by  the  global 
economic crisis and imports fell substantially faster than exports, a trend which continued in 
early  2009.  Net  FDI  slowed  to  6.0%  of  GDP  in  2008,  compared  to  6.3%  of  GDP  in  2007. 
Foreign borrowing slowed to 9.5% of GDP in 2008, from 10.8% a year earlier. As a result of 
the slowdown in capital inflows in 2008, foreign exchange reserves of the National Bank of 
Serbia  declined  to  3.4%  of  GDP  but  still  remained  at  6.3  months  of  imports.  External  debt 
reached at 67% of GDP. 

Country-risk indicators:

Serbia

footnotes

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Indicat ors of  m arket 's percept ion 
of  credit w ort hiness

(%)
(% change)
(% of labour force)
(% ch an g e)
(CSD p er  EUR)
(% of GDP)
(m EUR)
(% of GDP)
(m EUR)

(m EUR)

(m EUR)
(m EUR)
(m EUR)
(%)
(%)
(%)
(m EUR)

(m EUR)
(%)
(%)
(%)

Real GDP growth rate
Industrial production 
Unemployment (end of period)
Inflation rate (RPI) (Dec/Dec)
Exchange rate (end of period)
Gen er al g o ver n m en t  b alan ce
Exports of goods and services
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   m EUR
months' imports of goods and services
Convertible currency external debt
   (en d  o f  p er io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
   (number of countries)

(1)

(a)

(2)

(b)

(2)

2006

5.6
4.7
21.6
6.6
83.91
-1.6
5 102
-13.1
3 235

9 025
9.5
14 876

1 974
NA
NA
63.0
292
38.7
301
yes
671
7.7
4.5
13.2
-
-
-

2007

7.1
3.7
18.8
10.1
79.90
-2.0
6 432
-16.5
1 505

9 641
8.2
17 983

2 140
NA
NA
61.1
280
33.3
1 763
no
812
8.0
4.5
12.6
-
-
-

2008

6.0
0.9
NA
3.0
81.90
-2.2
7 428
-18.2
1 890

8 160.0
6.3
21 460

3 400
NA
NA
66.6
289
45.8
2 161
no
1 194
8.5
5.6
16.1

none
BB-
03/06   09/06
104    93
(185)   (185)
03/06   09/06
87    89
(173)   (173)

none
BB-
03/07   09/07
87     87
(185)   (185)
03/07   09/07
94      89
(173)   (173)

none
BB-
03/08  09/08
88   126
(185)   (186)
03/08   09/08
85       86
(174)   (177)

Footnotes
(1)

(2)
(a) (b)  

In November 2001, the Paris Club creditors agreed on a highly concessional two-phased debt restructuring of 66% in NPV terms.
The first phase (51%) became effective in May 2002 when the IMF adopted the new three-year Extended Arrangement (EA); 
the second phase (15%) will become effective upon successful completion on the EA.
Serbia B+, Montenegro BB.
See explanatory notes at beginning of the tables.

EN 

18 

   EN 

 
 
 
2.2.2.  Montenegro 

In Montenegro the economy expanded in 2008 by 8.1% in real terms. Yet, the contraction of 
exports, but also of imports of goods, contributed to curb the current account deficit in the last 
quarter of 2008. However, the cool-down of the real estate market reflected a decline of FDI 
by 17% year-on-year. Meanwhile, the stronger moderation of outflows kept net FDI at similar 
levels as in the previous year (17% of GDP). The impact of the global economic crisis hit the 
domestic  manufacturing  sector,  which  contracted  by  more  than  16%  in  the  last  quarter  of 
2008.  Yet,  given  the  considerably  bigger  share  of  employment  in  services,  this  continued 
growing  by  6%  annually,  while  the  unemployment  rate  further  contracted.  The  public  debt 
increased  by  nominal  21.4%  in  2008.  However,  the  external  public  debt  grew  much  more 
moderately  by  4.2%  and  represents  some  14%  of  GDP.  Overall,  the  consolidated  budget 
recorded a surplus of 1.5% of GDP. 

Count ry-risk indicat ors:

Montenegro

footnotes

2006

2007

(%)
(% change)
(% of labour force)
(% ch an g e)
(EUR p er  EUR)
(% of GDP)
(m EUR)
(% of GDP)
(m EUR)

(m EUR)

(m EUR)
(m EUR)
(m EUR)
(%)
(%)
(%)
(m EUR)

(m EUR)
(%)
(%)
(%)

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Real GDP growth rate
Industrial production 
Unemployment (end of period)
Inflation rate (CPI) (Dec/Dec)
Exchange rate (end of period)
Gen er al g o ver n m en t  b alan ce
Exports of goods and services
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   m EUR
months' imports of goods and services
Convertible currency external debt
   (en d  o f  p er io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Indicat ors of  m arket 's 
percept ion of  credit w ort hiness Moody's long-term foreign currency rating (end of period)

S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
   (number of countries)

See explanatory notes at beginning of the tables.

Footnotes
(a) (b)  

(a)

(b)

8.6
1.0
14.7
2.8
1.0
2.7
920.9
-24.7
475.0

310.3
2.7
845

n.a.

43.7
91.8
n.a.
0
yes
75
0.9
8.8
8.1
none

10.7
0.1
11.9
7.7
1.0
6.4
1 333.8
-29.4
524.9

490.4
2.6
1 656

n.a.

65.5
124.2
n.a.
0
yes
63
0.6
3.8
4.7
none

2008
(Estimate)
8.1
-1.1
10.8
6.9
1.0
1.5
1 282.0
-29.2
567.6

336.1
1.7
2 287

n.a.

77.2
178.4
n.a.
0
yes
54
0.4
2.4
4.2
none

none

Baa1

Baa1
BB/Positive/B  BB+/Stable/B BB+/Negative/B
03/07  09/07
03/06   09/06
none
none
(185)  (185)
(185)  (185)
03/07  09/07
03/06   09/06
89    96
87   89
(173)    (173)
(173)    (173)

03/08   09/08
none
(185)  (186)
03/08   09/08
87  88
(174)   (177)

EN 

19 

   EN 

 
 
2.3. 

New Independent States  

2.3.1.  Georgia 

The geo-political situation in Georgia remains fragile, due to the consequences of the military 
conflict with Russia. The newly-implemented monetary policy in order to curb inflation was 
put to the test in the immediate aftermath of military conflict. This forced the authorities to 
allow a 16% depreciation of the lari against the dollar in November 2008. After several years 
of  very  high  real  GDP  growth,  the  economy  is  expected  to  slow  down  in  2009.  Supportive 
fiscal and monetary policy measures aim to also cushion the consequences of the global crisis. 
The fiscal policy will remain accommodative, with the government budget deficit increasing 
to  7%  of  GDP  in  2009.  In  view  of  the  expected  deceleration  of  inflation  consumer  price  is 
expected  to  decrease  by  9%.  Against  the  background  of  a  heavy  dependence  on  external 
funding, evidenced by a current account deficit that reached more than 20% of GDP in 2008, 
the  Georgian 
the  capital 
markets.Vulnerabilities  are  mitigated,  however,  by  the  ample  assistance  (around  4.5  billion 
US$  over  a  three  year  period)  pledged  by  the  international  community  at  an  international 
donor's conference in October 2008. In addition, in late 2008 Georgia obtained access to an 
18-month  IMF  Stand-By  Arrangement  of  SDR  477.1  million  to  help  ensure  market  access, 
and is seeking additional MFA funding from the EU. 

financial  sector  seems 

to  have  difficulties 

to  accede 

Count ry-risk indicat ors:

Georgia

footnotes

2006

2007

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Indicat ors of  m arket 's percept ion 
of  credit w ort hiness

(%)
(% change)
(% of labour force)
(% ch ang e)
(Lar i p er  USD)
(% of GDP)
(commitments)
(m USD)
(% of GDP)
(m USD)

(m USD)

(m USD)
(m USD)
(m USD)
(%)
(%)
(%)
(m USD)

(m EUR)
(%)
(%)
(%)

Real GDP growth rate
Industrial production 
Unemployment (end of period)
Inflation rate (CPI) (Dec/Dec)
Exchange rate (end of period)
Gen er al g o ver n m en t  b alan ce

Exports of goods and services
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   m USD
   months' imports of goods and services
Convertible currency external debt
  (en d  o f  p er io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
  (number of countries)

(a)

(b)

(b)

Footnotes
(a) (b)  

See explanatory notes.

9.4
15.9
13.8
9.2
1.71
-2.4

2567
-15.1
1076

881
1.8
1 697

12.4
15.0
13.9
10.0
1.59
-3.0

3240
-19.6
1562

1361
2.1
1 790

2008
(projected)
2.0
n.a.
n.a.
5.0
1.66
-4.7

3500
-21.1
1200

1378
2.4
2 800

270
234.4
36.0
30.0
66
10.5
0
no
86
1.0
6.6
4.4
PRGF
(06/04-06/07)
yes

171
131.7
38.9
30.7
57
8.2
0
no
65
0.6
5.3
2.9
PRGF
(06/04-06/07)
yes

n.a.
n.a.
n.a.
34.6
80
14.0
0
no
61
0.4
3.0
2.4
Stand-by
(09/08-03/10)
yes

none
B+

none
B

none
B+
03/06   09/06 03/07   09/07 03/08    09/08
126    88
114    114
106    120
(185)   (185)
(185)   (186)
(185)   (185)
03/06   09/06 03/07   09/07 03/08    09/08
110   117
(173)  (173)

103     92
(174)   (177)

119    113
(173)  (173)

EN 

20 

   EN 

 
 
 
2.3.2.  Ukraine 

In  Ukraine,  real  GDP  growth  decelerated  strongly  already  in  2008  (2.1%  against  7.8%  in 
2007), and is foreseen to collapse in 2009 (some forecasts are as low as -12.5%). This change 
was driven by the reduction in domestic demand, and especially investment, on the back of 
the reduction of domestic credit growth and a severely curtailed access to external financing 
of  the  domestic  financial  system.  In  early  November  2008,  Ukraine  concluded  a  stand-by 
arrangement with the IMF worth USD 16.4 billion (eight times its quota); the first USD 4.5 
billion was drawn upon its approval. The programme includes a sharp tightening of fiscal and 
monetary policy and the implementation of a flexible exchange rate regime; it also envisages 
support for the domestic banking sector. The recapitalisation needs of the 17 largest Ukrainian 
banks  were  estimated  at  a  USD  3  billion,  including  USD  1.8  billion  needed  by  the  foreign 
banks  (also  from  the  EU).  The  first  programme  review  initially  scheduled  for  March  was 
delayed as the IMF staff mission that ended in early February did not reach an agreement with 
the authorities due to slippages in the budgetary policy and several other outstanding matters, 
including a re-pegging of the currency and protectionist measures. In mid-April, however, the 
government and the IMF staff reached an agreement on the resumption of the lending under 
the programme, and the IMF Board will review the programme in the first half of May. In the 
meantime,  the  government  has  approached  several  bilateral  donors  (including  the  EU)  for 
financial support. 

Count ry-risk indicat ors:

Ukraine

footnotes

2006

2007

2008

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Real GDP growth rate
Unemployment (average)
Consumer price Inflation (average)
Exchange rate (end of period)
Gen er al g o ver n m ent  b alan ce
Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   bn USD
   in months of next years imports of goods and services
Convertible currency external debt
   (en d  of  p er io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

(%)
(% of labour force)
(% chan g e)
(UAH p er  USD)
(% of GDP)
(bn USD)
(% of GDP)
(bn USD)

(bn USD)

(bn USD)
(bn USD)
(bn USD)
(%)
(%)
(%)
(m USD)
(m USD)
(m EUR)
(%)
(%)
(%)

Indicat ors of  m arket 's 
percept ion of  credit w ort hiness Moody's long-term foreign currency rating (end of period)

S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
   (number of countries)

Sources: International Monetary Fund.
Footnotes
(1) (2)  
(a)

See explanatory notes at beginning of tables.
Officially registered unemployed.

(a)

(1)

(2)

(2)

7.3
6.8
9.1
5.1
-0.7
39.0
-1.5
5.3

22.3
6.1

7.8
6.4
12.8
5.1
-1.1
49.8
-4.1
9.2

32.5
6.5

2.1
6.5
25.2
5.3
-1.5
67.7
-6.6
9.9

31.5
4.5

50.6

57.9

60.2

64
0.7
N/A
1.6
-
-
-

81
0.8
N/A
1.3
-
-
-

76
0.5
N/A
1.1

B2
BB-

B1
CCC+

Ba3
BB-
03/06   09/06 03/07  09/07 03/08   09/08
76   81
76     80
(185)  (186)
(185)  (185)
03/06   09/06 03/07  09/07 03/08   09/08
78      78

78     78
(185)  (185)

79    80

75      80
(173)    (173)

(173)    (173) (174)   (177)

EN 

21 

   EN 

 
 
2.4.  Mediterranean partners 

2.4.1. 

Jordan 

The Jordanian economy  maintained  a strong growth performance in 2008, despite the sharp 
increase of the food and oil prices and the slowdown of the economy in the second semester. 
Real GDP growth averaged around 5.5% but could drop to 3.5% in 2009. 

Fiscal  policy  has  been  prudent  in  2008  and  allowed  the  fiscal  deficit  to  narrow  to  5% 
(including  grants).  Jordan  also  managed  to  repay  a  USD  2.1  billion  of  its  external  debt 
(reducing it to 62% of GDP) sending a strong signal to its creditors and donors. The current 
account deficit is expected to narrow to 16% of GDP in 2009. However it still remains large 
calling  for  acceleration  in  the  export  diversification  efforts.  The  agreement  of  the  Jordanian 
government with Iraq (as of August 2008) to receive low priced crude oil will help reducing 
further the energy bill. 

The impact of the financial turbulences was manageable for the Jordanian banking sector. The 
absence  of  sophisticated  financial  instruments  and  the  limited  scale  of  most  banking 
operations allowed banks to build a buffer against future short-term instability and authorities 
boosted confidence announcing a guarantee scheme of bank deposits. 

Count ry-risk indicat ors:

Jordan

footnotes

2006

2007

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Indicat ors of  m arket 's percept ion of  
credit w ort hiness

(%)
(% of labour force)
(% ch an g e)
(JOD p er  USD)
(% of GDP)
(bn USD)
(% of GDP)
(bn USD)

(bn USD)

(bn USD)
(bn USD)
(bn USD)
(%)
(%)
(%)
(m USD)
(m USD)
(m EUR)
(%)
(%)
(%)

Real GDP growth rate
Unemployment (average)
Consumer price Inflation (average)
Exchange rate (end of period)
Gen er al g o ver n m en t  b alan ce
Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   bn USD
   in months of next years imports of goods and services
Convertible currency external debt
   (en d  o f  p er io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
   (number of countries)

(a)

(1)

(2)

(2)

6.4
13.9
6.3
0.7
-4.4
5.2
-11.3
3.1

6.2
5.6

6
13.5
5.4
0.7
-6.2
5.7
-16.7
1.9

7.9
5

2008
(prelim.)
5.5
12.6
14.9
0.71
-5.5
6.5
-23.9
2.3

8.6
3.6

51.9

47.0

24.0

359
4.1
N/A
9.1
-
-
-

302
3.0
N/A
7.8
-
-
-

299
2.1
N/A
6.4

Ba3
BB

Baa3
BB

Baa3
BB
03/06   09/06 03/07  09/07 03/08  09/08
74    75
74     74
74    76
(185)   (185)
(185)   (186)
(185)   (185)
03/06   09/06 03/07  09/07 03/08  09/08
81    82
(173)    (173)

73    76
(173)    (173)

81    83

(174)   (177)  

EN 

22 

   EN 

 
 
2.4.2. 

Syria 

Syrian  economy  performed  well  during  2008.  Non-oil  GDP  increased  by  an  estimated  6  % 
however, the overall growth is estimated around 5% due to the decline of the oil production. 
Given its low integration with the global financial system Syria is likely to be only indirectly 
affected by a regional slowdown resulting from the economic linkages with other countries in 
the  region  and  the  Gulf  countries.  FDI,  worker  remittances  and  demand  for  Syrian  exports 
may  decline;  therefore  growth  is  expected  to  drop  to  3.0%  in  2009.  Inflation  averaged  to 
around 14.5%. Inflationary pressures are expected to ease to 8% in 2009 as a result of the fall 
in  the  global  prices.  Additionally,  any  significant  return  of  the  Iraqi  refugees  to  Iraq  would 
help demand pressures to ease. 

The  fiscal  deficit  improved  marginally  to  3.5%  in  2008  because  public-sector  salaries  and 
crop  purchases  both  increased  largely  offsetting  the  fiscal  savings.  For  2009,  the  Syrian 
government  has  embarked  on  an  expansive  fiscal  policy  which  will  be  driven  by  large 
increases in capital expenditures but also in recurrent expenses. As a result, according to the 
budget  the  fiscal  deficit  will  reach  9%  of  GDP.  In  early  2009,  the  government  had  secured 
around USD 600 million (including € 275 million from the EIB) for funding electricity and 
other  development  projects.  The  current  account  deficit  widened  slightly  to  around  4%  in 
2008 as a result of the declining oil production and is expected to widen marginally in 2009 as 
a result of the lower exporting oil prices and an expected slowdown in remittances, FDI and 
tourist inflows. 

Count ry-risk indicat ors:

Syria

footnotes

2006

2007

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Indicat ors of  m arket 's 
percept ion of  

(%)
(% of labour force)
(% ch an ge)
(SYR£ p er  USD)
(% of GDP)
(bn USD)
(% of GDP)
(bn USD)

(bn USD)

(bn USD)
(bn USD)
(bn USD)
(%)
(%)
(%)
(m USD)
(m USD)
(m EUR)
(%)
(%)
(%)

Real GDP growth rate
Unemployment (average)
Consumer price Inflation (average)
Exchange rate (end of period)
Gen er al g over n m en t  b alan ce
Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   bn USD
   in months of next years imports of goods and services
Convertible currency external debt
   (en d  o f  per io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
   (number of countries)

(a)

(1)

(2)

(2)

Sources: International Monetary Fund.
Footnotes
(1) (2) 
(a)

See explanatory notes at beginning of tables.
Officially registered unemployed.

5.1
8.3
10.4
51.0
-1.2
10.2
-2.8
0.8

6.7
13.7

4.2
8.4
4.7
49.9
-3.4
11.7
-3.3
1.1

6.4
11.6

2008
(prelim.)
5.2
9
14.5
46.5
-3.5
12.5
-4.1
2.1

6.7
9.4

19.2

14.5

10.4

260
3.0
N/A
3.4
-
-
-

536

3.8 

N/A

6.0 

378

3.7 

N/A

4.8 

-
-
-

none
none

none
none

none
none
03/06  09/06  03/07  09/07 03/08   09/08
116   115
124   122
124    130
(185)   (185)
(185)  (186)
(185)   (185)
03/06  09/06  03/07  09/07 03/08   09/08
61    60
(173)   (173)

110  110
(174)   (177)

56    56
(173)   (173)

EN 

23 

   EN 

 
 
            
           
            
           
 
2.4.3.  Egypt 

Economic growth accelerated from 7.1% in 2007 to 7.2% in 2008 underpinned by investment, 
especially  FDI  and  private  consumption  (also  via  tourism).  However,  the  global  financial 
crisis is affecting the economy of Egypt. The Egyptian stock market has been rallying down 
since May by more than 50%, equalling a loss of more than 30% of GDP. This impacts the 
funding  for  enterprises  negatively.  As  to  the  real  side  of  the  economy,  economic  growth 
decelerated steeply to 5.8% in Q1 and further down to 4.1% in Q2 of 2009. The multitude of 
public  enterprises  remains  a  drain  on  the  government  budget  and  hampers  a  proper 
functioning of the internal market. The tourism sector will slow down, as will inward foreign 
direct investment. On a positive side, inflation has come down from the huge level of more 
than  20%  in  2008  to  14%  in  January  2009.  The  lower  global  energy  prices  are  expected  to 
bring  down  the  high  food  prices  in  Egypt.  So  far,  the  government  finances  are  stable,  with 
deficits  in  the  range  of  7  to  8%  of  GDP.  For  this  reason  gross  government  debt  is  high,  at 
almost 90% of GDP. In order to stimulate the Egyptian economy, a fiscal package of USD 15 
billion, of which 50% will be spent before July 2009, is already launched. 

Count ry-risk indicat ors:

Egypt

footnotes

2006

2007

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Indicat ors of  m arket 's percept ion of  
credit w ort hiness

(%)
(% of labour force)
(% ch an g e)
(LE p er  EUR)
(% of GDP)
(bn USD)
(% of GDP)
(bn USD)

(bn USD)

(bn USD)
(bn USD)
(bn USD)
(%)
(%)
(%)
(m USD)
(m USD)
(m EUR)
(%)
(%)
(%)

Real GDP growth rate
Unemployment (average)
Consumer price Inflation (average)
Exchange rate (end of period, + is depreciation of LE)
Gen er al g o ver n m en t  b alan ce
Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   bn USD
   in months of next years imports of goods and services
Convertible currency external debt
  (en d  o f p er io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
  (number of countries)

(a)

(1)

(2)

(2)

Sources: International Monetary Fund.
Footnotes
(1) (2) 
(a)

See explanatory notes at beginning of tables.
Officially registered unemployed.

2008
(projections)
7.2
8.5
11.7
8.1
-7.8
56.6
0.5
12.1

35
7.5
33.9

60.0

20.1

1.1

2 141
15.2
8.8
5.3

6.8
11.5
4.2
7.2
-9.2
35.9
1.6
6.0

22.9
5.9
29.6

59.6

27.6

1.7

1 562
17.9
7.0
5.7
-
-
-

7.1
9.5
11.0
7.5
-7.5
42.5
1.7
10.5

28.4
6.1
29.9

54.7

22.8

1.3

1 680
16.5
8.3
5.8
-
-
-

Ba1
BB+

Ba2
BB+

Ba1
BB+
03/06   09/06 03/07   09/07 03/08   09/08
68   68
71      69
68     68
(185)   (185)
(185)   (186)
(185)   (185)
03/06   09/06 03/07   09/07 03/08  09/08
70     72
(173)    (173)

70   70
(173)    (173)

73   71
(174)   (177)

EN 

24 

   EN 

 
 
 
2.4.4.  Lebanon 

Lebanon  will  be  affected  by  the  crisis  primarily  via  trade  linkages,  remigration  of  emigrant 
workers,  and  a  decline  in  remittances.  Given  the  high  public  and  external  debt  and  the 
reduction in oil revenue recycling from the Gulf region, Lebanon's access to capital inflows 
will be reduced in the wake of financial risk aversion. Reductions in capital flows may have 
important repercussions, as in 2007 Lebanon was the middle income country with the highest 
share of FDI inflows in domestic investment (64%). Against this background, investment is 
set to decelerate. On the positive side, however, the well-capitalised and highly liquid banking 
sector has withstood the financial headwinds quite well so far. Stringent prudential regulation 
has meant that Lebanese banks were hardly involved in the trade in structured products. With 
foreign  reserves  still  increasing,  the  stable  exchange  rate  to  the  dollar  has  also  provided  a 
cushion. Also, inflation has been falling from its peak in  mid-2008,  reflecting  strong global 
disinflationary forces. 

The  availability  of  IMF  financing  under  EPCA  II  and  the  disbursement  of  the  first  grant 
tranche  of  EU  MFA  in  late  December  2008  (€  15  million)  should  help  stabilise  public 
finances. Nevertheless, Lebanese public finances remains precarious in view of high debt and 
deficit  ratios.  For  lack  of  recent  fiscal  data,  the  exact  impact  of  the  crisis  on  the  public 
accounts is difficult to estimate. Refinancing costs being pushed up as a result of risk aversion 
would weigh on the budget. As a result of rising interest rate spreads, the planned issue of a 
government euro bond already has to be postponed. 

Country-risk indicators:

Lebanon

footnotes

2006

General indicators

Balance of  paym ent s

Real GDP growth rate
Industrial production (period average)
Unemployment rate (average)
Inflation rate (CPI, av)
Exchange rate (av)
To t al g o ver n m en t  d eb t
Exports of goods and services
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   m USD
   months' imports of goods and services

     (a)

(%)
(% change)
(% of labour force)
(% ch an g e)
(L£ p er  USD)
(% of GDP)
(m USD)
(% of GDP)
(m USD)
(gross useable)

Ext ernal (f oreign currency) governm ent  debt Convertible currency external debt

   (en d  o f  p er io d )
Convertible currency debt service
   principal
   interest
Foreign currency debt/GDP
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
   (number of countries)

See explanatory notes at beginning of tables.
Officially registered unemployed.

Indicators of EU exposure

IMF arrangem ent s

Indicat ors of  m arket 's percept ion of  
credit w ort hiness

Sources: International Monetary Fund.
Footnotes
(1) (2)  
(a)

(m USD)

(m USD)
(m USD)
(m USD)
(%)
(%)
(%)
(%)
(m USD)
(m USD)
(m EUR)
(%)
(%)
(%)

(1)

(2)

(2)

2007

7.5
n.a.
n.a.
4.1
1508
171
4 077
-7.2
3 077

11 494
6.6
21 221

1 511 
n.a.
n.a.
84
197.3
576
41
n.a.
n.a.
354
3.5
2.5
12.8
-
-
-

2008
(estimates)
4.2
n.a
n.a
12.1
1508
162
5 259 
-10.9
3 529 

17 115 
7.2
21 550 

1 534 
n.a
n.a
n.a
190.4 
472 

33.6
n.a
n.a
508
3.6
3.3
13.5
EPCA II
adopted 3-11
-

0.6
n.a.
n.a.
5.6
1508
177
3 207 
-5.6
2 669

11 353 
7.2
20 330 

1 677 
n.a.
n.a.
90.0 
196.0 
748 
61.7 
n.a.
n.a.
330
3.8
2.1
13.6
-
-
-

B3
B-

B 3
B-

B3
B-
03/06   09/06 03/07   09/07 03/08   09/08
127   134
111    116
98    106
(185)   (185)
(185)   (186)
(185)   (185)
03/06   09/06 03/07   09/07 03/08   09/08
109   121 
(173)    (173)

101     99
(173)    (173)

115   113
(174)   (177)

EN 

25 

   EN 

 
 
       
       
       
     
     
 
     
     
       
       
       
         
       
       
          
          
         
 
2.4.5.  Tunisia 

Economic  growth  in  Tunisia  remained  buoyant  in  2008  and  is  estimated  to  have  reached 
around 8%. Tunisia is well-integrated with the EU economy. While the direct impact of the 
crisis  on  Tunisia's  financial  sector  has  been  relatively  muted,  reflecting  its  closed  character 
and the lack of currency convertibility, indirect effects are being increasingly felt, in particular 
via  the  trade  channel.  Inflation  peaked  at  around  6%  in  the  spring  of  2006  and  has  been 
moderating  since,  facilitating  the  adjustment  Government  finances  continued  to  improve  in 
2008, even though extensive subsidies (notably on food) put a burden on public finances, Last 
year, higher food subsidies led to a marked increase in government expenditure of around 0.8 
percentage points of GDP in 2008. 

The  public  deficit  and  debt  are  expected  to  slightly  increase  in  2009  in  view  of  economic 
headwinds.  The  persistently  high  nonperforming  loans  ratio  (estimated  at  around  17%) 
underlines  the  vulnerability  of  the  Tunisian  banking  sector  to  adverse  shocks,  whereas 
persistently high unemployment will remain an important challenge. 

Country-risk indicators:

Tunisia

footnotes

2006

2007

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Indicat ors of  m arket 's percept ion of  
credit w ort hiness

(%)
(% of labour force)
(% ch an g e)
(TD p er  USD)
(% of GDP)
(bn USD)
(% of GDP)
(bn USD)

(bn USD)

(bn USD)
(bn USD)
(bn USD)
(%)
(%)
(%)
(m USD)
(m USD)
(m EUR)
(%)
(%)
(%)

Real GDP growth rate
Unemployment (average)
Consumer price inflation (average)
Exchange rate (end of period)
Gen er al g o ver n m en t  b alan ce
Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   bn USD
   in months of next years imports of goods and services
Convertible currency external debt
  (en d  o f  p er io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
  (number of countries)

(a)

(1)

(2)

(2)

Sources: International Monetary Fund.
Footnotes
(1) (2) 
(a)

See explanatory notes at beginning of tables.
Officially registered unemployed.

2008
(projections)
5.1
14.0
5.1
1.23
-2.7
19.5
-3.9
1.9

8.9
4.1

51.8
94.9
9.9

1 683
12.0
N/A

12.0 

5.7
14.3
4.6
1.32
-2.7
11.5
-2.0
3.3

6.8
5.0

58.3
160.9
18.8

1 411
16.2
N/A

16.2 
-
-
-

6.3
14.1
3.1
1.27
-2.9
15.0
-2.6
1.6

7.9
4.6

54.9
123.3
13

1 562
15.3
N/A

15.3 
-
-
-

Baa2

Baa2

Baa2
BBB (stable) BBB (stable) BBB (stable)
03/06   09/06 03/07  09/07 03/08  09/08
62    64
62    64
59    62
(185)) (186)
(185)    (185)
(185)    (185)
03/06   09/06 03/07  09/07 03/08  09/08
61     60
(173)   (173)

56     56 
(173)   (173)

56    60
(174)   (177)

EN 

26 

   EN 

 
 
          
          
         
 
2.4.6.  Morocco 

Official figures forecast real GDP growth at 6.5% in 2008, and anticipate a slowdown to 5.5% 
in  2009.  The  economy  continues  to  be  dependent  on  the  agricultural  output,  although  non-
agricultural GDP growth continues to perform rather well, at an expected growth rate of 6% 
in  2008  and  2009.  The  overall  fiscal  deficit  is  projected  at  3.8%  in  2008  from  a  close-to-
balance position in 2007. The expansion in wages (an increase in the minimum wage of civil 
servants) and extraordinary spending on food and oil subsidies (5% of GDP compared with 
2.6% in 2007) are the key factors behind the substantial deterioration of the public finances in 
2008.  Public  deficit  in  2009  is  expected  to  remain  in  the  same  order  (3.7%)  in  spite  of 
government’s announcements about a potential overhaul of the current subsidy system and oil 
price moderation since August 2008. Total government debt was close to 54% of GDP end-
2007 but is expected to contract to around 52% in 2008 and 2009 in spite of mounting levels 
of public deficit. 

Inflation has been low in recent years (1.8% in average). Inflation peaked to 5.1% as a result 
of high international oil and commodity prices, although it moderated to 3.5% in October. The 
current  exchange  rate  regime  is  tightly  managed  against  a  euro-dominated  basked  of 
currencies. The authorities have taking gradual steps to lessen currency controls, with the aim 
of  introducing  a  fully  floating  currency  at  an  unspecified  date.  The  external  environment 
remains shaped by a substantial trade deficit standing in 2008 at 22% of GDP (2007: 19.2%). 
Large  increases  in  tourism  revenues  (+13.2%)  and  remittances  (+15.1%)  have  been 
insufficient to offset the trade deficit resulting in a negative current account balance standing 
at 0.7% of GDP in 2007. However, rising GDP is expected to consolidate the steady fall in the 
external debt-to-GDP ratio about 21% of GDP at the end of 2008. 

Country-risk indicators:

Morocco

footnotes

2006

2007

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Indicat ors of  m arket 's percept ion of  
credit w ort hiness

(%)
(% of labour force)
(% ch an g e)
(MDH p er  USD)
(% of GDP)
(bn USD)
(% of GDP)
(bn USD)

(bn USD)

(bn USD)
(bn USD)
(bn USD)
(%)
(%)
(%)
(m USD)
(m USD)
(m EUR)
(%)
(%)
(%)

Real GDP growth rate
Unemployment (average)
Wholesale price Inflation (average)
Exchange rate (end of period)
Gen er al g o ver n m en t  b alan ce
Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   bn USD
   in months of next years imports of goods and services
Convertible currency external debt
  (en d  o f  p er io d )
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
  (number of countries)

(a)

(1)

(2)

(2)

Sources: International Monetary Fund.
Footnotes
(1) (2)  
(a)

See explanatory notes at beginning of tables.
Officially registered unemployed.

7.8
11.1
3.3
8.8
-2.3
35.1
2.2
3.4

20.2
7.0

2.7
9.7
2
8.2
-0.5
41.5
-0.1
5.2

24.0
6.5

2008
(prelim.)
6.5
9.8
3.5
7.8
-3.8

-0.7
…

28.2
6.8

23.9

23.8

21.1

1 187
13.6
N/A
4.5
-
-
-

1 275
12.5
N/A
4.5
-
-
-

1 929
13.7
N/A
N/A

Ba1
BB+

Ba2
BB+

Ba1
BB+
03/06    09/06 03/07    09/07 03/08   09/08
66      63
65     65
66     65
(185)    (185)
(185)   (186)
(185)    (185)
03/06   09/06 03/07   09/07 03/08   09/08
67      67
(173)   (173)

65    66
(173)   (173)

66    67
(174)   (177)

EN 

27 

   EN 

 
 
 
2.5. 

Other countries 

2.5.1. 

South Africa 

South  Africa  could  not  escape  the  consequences  of  the  global  financial  turmoil.  The  last 
quarters  in  2008  have  been  the  weakest  in  terms  of  growth  for  a  decade.  On  top  of  a  weak 
internal demand, tied by the high interest rates to limit inflation (peaking at 14% in August), 
weakness  in  manufacturing  and  mining  highlights  the  impact  of  the  dramatic  reduction  in 
external demand. Inflation is set to fall quickly in the coming months and the current account 
deficit  should  shrink  significantly  in  2009  on  lower  import  demand  and  lower  dividend 
outflow.  Due  to  capital  inflows,  the  overall  balance  of  payments  registered  surpluses  in  all 
quarters  in  2008.  External  debt  is  below  30%  of  GDP.  Foreign  reserves  are  relatively  high 
covering 200% of foreign currency denominated short-term debt and 3.5 months of imports of 
goods and services. The main risk to the outlook relates to the current account deficit that is 
primarily  financed  by  capital  inflows.  In  the  global  environment  of  elevated  levels  of  risk 
aversion a slowdown in portfolio inflows or even a sustained outflow of funds would cause a 
large  depreciation  of  the  Rand.  A  large  depreciation  would  place  upward  pressure  on  the 
inflation outlook and thus jeopardise the anticipated downward trajectory of interest rates. 

Country-risk indicators:

South Africa

footnotes

2006

2007

General indicators

Balance of  paym ent s

Ext ernal debt

Indicators of EU exposure

IMF arrangem ent s

Indicat ors of  m arket 's percept ion of  
credit w ort hiness

(%)
(% change)
(% of labour force)
(% chan ge)
(SAR p er  EUR)
(% of GDP)
in bn US $
(m EUR)
(% of GDP)
(m EUR)

(m EUR)

(m EUR)
(m EUR)
(m EUR)
(%)
(%)
(%)
(m EUR)

(m EUR)
(%)
(%)
(%)

Real GDP growth rate
Industrial production 
Unemployment (end of period)
Inflation rate (CPI) (Dec/Dec)
Exchange rate (end of period)
Gen er al go ver n m ent  balan ce
Exports of goods and services
Exports of goods and services
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   m EUR
   months' imports of goods and services
Convertible currency external debt
   (en d  o f  per iod )
Convertible currency debt service
   principal
   interest
External debt to official creditors/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
   (number of countries)
The Institutional Investor
   Position in the ranking 
   (number of countries)

(a)

(1)

(2)

(2)

Sources: International Monetary Fund.
Footnotes
(1) (2)  
(a)

See explanatory notes at beginning of tables.
Officially registered unemployed.

5.4
6.2
25.5
4.7
9.31
0.4
76.2
60658
-6.5

5.1
5.8
23.0
7.1
10.04
0.9
89.5
65293
-7.3

$25,6bn
32159
3.3

$33,0bn
45234
3.4

2008

4.5
22.5
11.6
12.08

108.6
74282.4
-7.6
14

$34,1bn

48062

3.4

2.0

7.0
none
none

721 
8.3 

N/A

1.2 

none

1.8

1.6

none
none

666 
6.5 

N/A

1.0 

none

none
none

636 
4.5 

N/A

0.9 

none

Baa1
BBB+

Baa1
BBB+

Baa1
BBB+
03/06   09/06 03/07  09/07 03/08  09/08
55    54 
55      55
   55      55
( 185)   (186)
(185)  (185)
03/06   09/06 03/07  09/07 03/08  09/08
   53     51
(173)    (173)

  51     49
(173)    (173) (174)   (177)

   52     53

(185)  (185)

EN 

28 

   EN 

 
 
             
           
            
              
            
             
              
            
             
 
2.5.2.  Brazil 

Until September 2008, Brazil had showed significant resilience to the global crisis due to its 
solid macroeconomic fundamentals. However, the deepening crisis has subsequently impacted 
the economy through the different channels of transmission. GDP growth is projected to come 
down from 5.5% in 2008 to near 0% in 2009. . Although exports represent less than 15% of 
GDP,  weaker  global  demand,  jointly  with  low  commodity  prices,  which  represent  around 
50% of Brazil's exports, have turned the current account surpluses of the last five years into a 
deficit, which is projected to amount to over 2% of GDP in 2009. Under these circumstances, 
the  government  has  announced  a  fiscal  package  to  prevent  a  more  severe  economic 
slowdown. However, fiscal revenues have begun to decline, widening the fiscal deficit from -
1.6% of GDP in 2008 to around -2% in 2009. At the same time, it kept its commitment to its 
inflation  target  (4.5%  ±2  percentage  points).  On  the  financial  markets  scene,  reduced 
availability  of  external  funding  following  a  deleverage  path,  rising  risk  aversion  and 
uncertainty  about  Brazilian  economic  prospects  have  significantly  tightened  financial 
conditions. The local money market has experienced particular pressure. Finally, the Brazilian 
currency has sharply depreciated (more than 45% since September). Nevertheless, current low 
external  debt,  large  international  reserves  (amounting  to  above  $200bn),  well  capitalised 
financial  institutions  and  the  fact  that  Brazil  is  one  of  the  few  emerging  markets  to  benefit 
from the special swap facility in US dollars established in October by the US Federal Reserve 
should help the government to roll over the external debt due in 2009. 

Country-risk indicators:

Egypt

footnotes

2006

2007

2008

General indicators

Balance of payments

External debt

Indicators of EU exposure

IMF arrangements

Indicators of market's perception of 
creditworthiness

(%)
(%)
(% of labour force)
(% change)
(LE per EUR)
(% of GDP)
(bn USD)
(% of GDP)
(bn USD)

(bn USD)

(bn USD)
(bn USD)
(bn USD)
(%)
(%)
(%)
(m USD)
(m USD)
(m EUR)
(%)
(%)
(%)

Real GDP growth rate
Industrial production 
Unemployment (average)
Consumer price Inflation (average)
Exchange rate (end of period, + is depreciation of LE)
General government balance
Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   bn USD
   in months of next years imports of goods and services
Convertible currency external debt
   (end of period)
Convertible currency debt service
   principal
   interest
External debt/GDP
External debt/exports of goods and services
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling
EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services
Type
(Date)
On track

Moody's long-term foreign currency rating (end of period)
S&P long-term foreign currency rating (end of period)
Euromoney
   Position in the ranking 
  (number of countries)
The Institutional Investor
   Position in the ranking 
  (number of countries)

3.8
2.8
10.0
3.1
2.7
-2.8
109748
1.3
14973

68333
8.0
158800

33340
23175
10165
18.7
145
34
no
no
541
5.7
0.4
0.5

No

5.4
6
9.3
4.5
2.6
-2.1
116800
0.3
25246

131127
14
177960

37372
26160
11212
18.5
152
32
no
no
443
4.4
0.3
0.4

No

5.1
3
6.8
5.9
3.3
-1.5
140539
-1.7
17468

137585
13
170094

27602
16617
10985
13.7
121
16
no
no
621
4.4
0.3
0.4

No

Ba3
BB
03/06    09/06
69       66
(185)    (185)

03/06   09/06
64      61
(173)   (173)

Ba1
Ba1
BBB-
BB+
03/08   09/08
03/07    09/07
66     60
67     66
(185)  (186)
(185)    (185)
03/07   09/07 03/08   09/08
60      52
(174)   (177)

60     57
(173)   (173)

(1)

(2)

(2)

Sources: International Monetary Fund.
Footnotes
(1) (2) 

See explanatory notes at beginning of tables.

EN 

29 

   EN