COMMISSION STAFF WORKING DOCUMENT accompanying the   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL  on guarantees covered by the general budget  situation at 31 December 2009
Date: 2010-10-20
Institutions: European Commission
Subjects: Community budget, budgetary reserve (EU), general budget, investment protection, macroeconomics, microeconomics, report

EUROPEAN COMMISSION 

Brussels, 20.10.2010 
SEC(2010) 1218 final 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

REPORT FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

on guarantees covered by the general budget  
situation at 31 December 2009  

COM(2010)580 

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COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

REPORT FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

on guarantees covered by the general budget  
situation at 31 December 2009  

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TABLE OF CONTENTS 

1. 

Explanatory notes on the situation of risks covered by the Budget ............................. 4 

1.1. 

Tables A1 and A2......................................................................................................... 4 

1.1.1.  Authorised ceiling (Table A1) ..................................................................................... 4 

1.1.2.  Capital outstanding (Table A1).................................................................................... 5 

1.1.3.  Annual risk (Table A2) ................................................................................................ 5 

1.2. 

1.3. 

Loan operations covered by the Budget guarantee ...................................................... 8 

Evolution of risk......................................................................................................... 12 

1.3.1.  Situation of loans to non euro area Member States.................................................... 12 

1.3.2.  Situations of loans to third countries.......................................................................... 13 

1.4. 

Payment under the Budget guarantees ....................................................................... 14 

1.4.1.  Borrowing/lending operations.................................................................................... 14 

1.4.2.  Guarantees given to third parties................................................................................ 15 

1.4.3.  Activation of Budget guarantees................................................................................ 16 

2. 

Country-risk evaluation.............................................................................................. 17 

2.1. 

Candidate countries.................................................................................................... 18 

2.1.1.  Turkey ........................................................................................................................ 18 

2.2. 

Potential candidate countries...................................................................................... 20 

2.2.1.  Serbia.......................................................................................................................... 20 

2.3. 

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

2.3.1. 

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

2.3.2.  Egypt .......................................................................................................................... 24 

2.3.3.  Lebanon...................................................................................................................... 26 

2.3.4.  Tunisia........................................................................................................................ 28 

2.3.5.  Morocco ..................................................................................................................... 30 

2.3.6.  Syria ........................................................................................................................... 31 

2.4. 

Other countries ........................................................................................................... 32 

2.4.1.  South Africa ............................................................................................................... 32 

2.4.2.  Brazil .......................................................................................................................... 35 

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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 EU 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. 

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 or by the European Parliament and 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 EU 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 Decision 2009/633/EC of the 
European Parliament and of the Council, and a sharing of risk between the EU and the EIB as the 
Budget  guarantee  covers  only  political  risks  in  some  cases,  as  regards  the  two  first-mentioned 
decisions, and only risks of a political or sovereign nature in the case of the last decision; 

•  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 20092. 

2 

For  the  purpose  of  this  calculation,  it  is  assumed  that  defaulting  loans  are  not  accelerated,  i.e.  only  due 
payments are taken into account. 

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TABLE A1: CAPITAL OUTSTANDING IN RESPECT OF OPERATIONS DISBURSED at 31.12.2009 (in EUR million)

Authorised
ceiling

Capital
outstanding at
30.06.2009

Capital
outstanding at
31.12.2009

Remainder
to be disbursed
at 31.12.2009

Operations

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

BoP1
Hungary
Latvia
Romania

MEMBER STATES - TOTAL
THIRD COUNTRIES
A. Macro-Financial Assistance
Albania
Bosnia-Herzegovina
FYROM
Georgia
Lebanon
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

3 659
115
431

4 000
1 000

9 205

9
40
82
58
25
280
28
15
 536
 50

5 487
5 930
1 659
 583

3 533
90
427

5 500
2 200
1 500

13 250

9
40
77
36
25
280
28
0
 495
 54

6 333
6 641
2 049
 667

6 500
3 100
5 000

9
40
90
142
50
280
75
260
 946

28 755
28 342
8 205
2 400

766

1 000
900
3 500

6 166

25

 50
 9

5 440
4 604
1 311
 497

12 618
11 911
18 076

Sub total EIB3
THIRD COUNTRIES - TOTAL
GRAND TOTAL
(1) By Decision 431/2008/EC of 18 May 2009 the Council decided to increase the ceiling from EUR 25 000 million to EUR 50 000 million.
(2) The overall ceiling is EUR 4 000 million for loans to Member States and to certain non-member States. 

67 702
68 648
68 648

17 318
14 245
23 450

19 224
16 239
29 489

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

ANNEX TO TABLE A1: SITUATION IN RESPECT OF EIB OPERATIONS at 31.12.2009 (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 2000/20076:
Pre-Accession countries
Neighbourhood and Partnership countries
Asia and Latin America
South Africa
Member States (following the accession) 5

sub-total 65 %4

Financial agreements (70% Guarantee rate)
Pre-Accession countries
Neighbourhood and Partnership countries
Asia and Latin America:
South Africa
Member States (following the accession) 5

sub-total 70 %4

Financial agreements (75% Guarantee rate)
Pre-Accession countries
Neighbourhood and Partnership countries
Member States (following the accession) 5

sub-total 75 %4

Financial agreements (100% Guarantee rate)
Pre-Accession countries
Neighbourhood and Partnership countries
Asia and Latin America
South Africa
Member States (following the accession) 5

sub-total 100 %4
Total  

Credit line
authorised

Loans made
available minus
cancellations

Amounts
disbursed

Amounts
outstanding 
at 31.12.2009

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

11 928
5 262
4 262
3 860
 403
1 921
 616
1 305
 483

19 384
7 338
6 325
2 135
824
2 762
31 312
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
50 207

3 044
1 077
1 137
1 022
 115
 787
 93
 694
 42

14 702
5 447
4 829
1 659
616
2 151
17 746
5 997
 449
1 492
 657
 265
3 134
5 997
7 176
 719
4 499
1 958
7 176
5 209
 29
 159
 714
 203
4 104
5 209
36 127

3 041
1 077
1 137
1 022
 115
 785
 93
 692
 42

11 905
4 856
4 034
992
514
1 508
14 946
2 606
 298
 632
 154
 105
1 417
2 606
 851
 95
 688
 67
 851
 821
 7
 150
 119
 5
 540
 821
19 224

(4) Percentage figures relate to the Guarantee rate.
(5) Loans to Member States were drawn from 'Pre-Accession countries' or from 'Neighbourhood and Partnership countries' ceilings.

(6) Including Turkey Terra and Special Action Turkey.

6 

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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 31.12.2009

Ranking

Country

2010

2011

2012

2013

2014

2015

2016

2017 until 2039 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

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

 343.9
 279.6
 202.8
 196.3
 152.2
 149.1
 89.3
 88.0
 82.0
 80.5
 70.6
 65.6
 63.1
 61.5
 60.2
 56.9
 44.2
 34.0
 32.1
 26.4
 24.8
 22.9
 22.8
 22.4
 20.8
 18.3
 14.5
 14.4
 12.9
 11.8
 10.6
 10.2
 9.7
 8.2
 7.3
 5.7
 4.8
 4.7
 4.7
 4.1
 3.8
 3.8
 3.5
 3.1
 3.0
 2.9
 2.4
 2.4
 2.1
 2.0
 1.0
 0.7
 0.3
 0.2
 0.0
 0.0
2 465.0
890.1

 343.6
 318.4
 198.3
2 209.0
 160.3
 148.9
 65.9
 73.7
 73.0
 77.8
 73.6
 66.0
 46.9
 68.2
 75.4
 72.6
 42.4
 36.3
 40.7
 22.4
 28.2
 3.2
 22.7
 13.6
 14.3
 14.6
 14.6
 14.6
 12.7
 11.7
 12.6
 17.2
 9.3
 7.4
 7.0
 5.5
 4.4
 4.7
 12.4
 3.2
 3.8
 4.7
 3.5
 4.4
 1.8
 3.5
 2.4
 3.0
 3.9
 1.9
 1.0
 0.7
 0.3
 0.1
 3.5
 0.2
4 486.0
2 924.1

 376.9
 264.9
 191.4
 141.7
 164.1
 153.5
 81.9
 86.5
 70.5
 75.3
 74.3
 51.0
 41.2
 112.7
 73.9
 73.6
 40.9
 60.6
 43.6
 24.9
 31.0
 3.2
 19.7
 0.0
 11.4
 12.6
 16.0
 14.6
 12.9
 11.7
 12.6
 18.1
 7.2
 6.7
 6.9
 5.3
 6.1
 4.7
 15.3
 8.2
 3.8
 7.7
 3.5
 5.2
 1.8
 10.0
 2.4
 3.4
 3.9
 0.9
 0.5
 0.7
 12.2
 0.1
 6.9
 0.4
2 490.9
788.9

7 

EN 

 381.8
 264.1
 187.3
 132.9
 167.0
 158.8
 57.3
 71.9
 67.9
 69.6
 73.1
 37.2
 68.8
 114.6
 73.8
 71.2
 34.5
 33.8
 43.7
 24.9
 27.7
 3.2
 43.9
 0.0
 9.4
 12.6
 14.0
 14.4
 13.2
 8.9
 12.8
 17.9
 4.7
 6.8
 6.9
 5.1
 8.3
 4.6
 15.3
 16.8
 3.8
 10.4
 3.5
 5.2
 0.9
 10.2
 2.4
 4.1
 3.9
 1.3
 0.0
 0.3
 12.1
 0.2
 6.9
 0.5
2 446.2
736.9

 405.5
 244.7
 171.0
2 128.4
 163.7
 155.1
 59.4
 72.4
 56.4
 53.0
 55.2
 25.8
 91.5
 122.0
1 073.7
 70.5
 30.0
 33.1
 40.4
 24.9
 29.7
 3.2
 35.3
 0.0
 7.4
 12.6
 16.8
 14.3
 14.3
 6.1
 13.0
 14.5
 3.1
 7.0
 6.8
 5.0
 2.0
 0.0
 15.3
 13.6
 3.8
 13.5
 0.0
 5.2
 0.0
 12.1
 2.4
 4.5
 3.9
 1.2
 0.0
 0.0
 4.0
 0.4
 6.9
 0.5
5 355.2
3 669.9

 395.5
1 743.8
 170.3
 63.0
 152.6
 149.2
 53.5
 69.0
 45.7
 43.0
 48.7
 15.1
 197.9
 174.2
1 242.3
 72.9
 23.0
 74.6
 38.6
 24.9
 26.1
 3.2
 34.1
 0.0
 4.4
 12.6
 17.3
 9.3
 12.1
 6.1
 11.3
 14.5
 0.0
 7.1
 11.2
 4.8
 0.0
 0.0
 15.3
 13.6
 3.8
 15.2
 0.0
 5.2
 0.0
 13.0
 2.4
 3.7
 3.9
 1.2
 0.0
 0.0
 0.0
 1.0
 6.9
 0.6
5 057.6
3 231.0

 331.0
 174.1
 170.3
1 558.8
 139.8
 138.4
 61.1
 66.6
 43.7
 29.4
 41.8
 14.7
 175.1
 122.9
 4.0
 70.2
 20.9
 30.0
 37.9
 16.1
 24.3
 3.2
 29.1
 0.0
 2.1
 8.6
 16.7
 8.0
 10.9
 4.2
 9.9
 12.1
 0.0
 2.7
 11.2
 4.6
 0.0
 0.0
 15.3
 13.6
 3.7
 12.6
 0.0
 5.2
 0.0
 13.1
 2.4
 3.7
 3.9
 0.8
 0.0
 0.0
 0.0
 0.9
 3.5
 0.6
3 473.8
1 897.9

3 126.6
 916.1
 949.3
 2.1
1 124.2
 846.6
 274.2
 250.3
 86.3
 112.9
 101.4
 101.4
 6.8
 541.9
 9.8
 275.0
 133.0
 170.2
 264.5
 28.0
 59.9
 9.6
 80.1
 0.0
 0.0
 21.9
 113.4
 19.4
 20.2
 8.7
 131.5
 17.6
 0.0
 18.6
 68.3
 13.3
 0.0
 0.0
 32.2
 15.9
 5.5
 53.1
 0.0
 11.9
 0.0
 61.7
 16.6
 1.9
 9.9
 4.2
 0.0
 0.0
 0.0
 6.8
 0.0
 34.4
10 157.2
1 492.2

5 704.7
4 205.7
2 240.7
6 432.2
2 224.0
1 899.6
 742.5
 778.5
 525.5
 541.5
 538.8
 376.8
 691.2
1 317.9
2 613.0
 762.8
 368.8
 472.5
 541.4
 192.5
 251.6
 51.7
 287.6
 36.0
 69.9
 113.9
 223.2
 108.8
 109.2
 69.3
 214.3
 122.1
 34.0
 64.5
 125.6
 49.2
 25.6
 18.7
 125.9
 89.2
 32.0
 120.9
 14.2
 45.2
 7.4
 126.5
 33.2
 26.7
 35.7
 13.6
 2.5
 2.3
 28.9
 9.8
 34.8
 37.2
35 931.7
15 631.0

   EN 

 
1.2. 

Loan operations covered by the Budget guarantee  

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

TABLE A3a
BoP and Euratom lending operations to Member States 

Period 30.06.2009 to 31.12.2009

Instrument

Decision

Date of
decision

Loan Guarantee Maturity
term
(years)

Rate

Date

BOP

2009/431/EC

8/05/2009

100%

Hungary

2009/102/EC

1st tranche
2nd tranche
3 rd tranche

Latvia

2009/290/EC

1st tranche
2nd tranche

Romania

2009/459/EC

1st tranche

4/11/2008
9/12/2008
26/03/2009
6/07/2009

20/01/2009
25/02/2009
27/07/2009

6/05/2009
27/07/2009

77/270-271/Euratom 29/03/1977
20/12/1979
15/03/1982
5/12/1985
23/04/1990

80/29/Euratom
82/170/Euratom
85/537/Euratom
90/212/Euratom

EURATOM

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

TOTAL

3
5.6
6.8

5.1
5.5

5.5

20
15
17
15
15
16
16
14

17
19
18

100%

9/12/2011
7/11/2014
6/04/2016

3/04/2014
27/01/2015

27/01/2015

10/05/2021
15/01/2017
19/08/2019
18/06/2018
16/01/2019
10/09/2020
4/04/2021
23/02/2020

21.07.2022
26.11.2024
23.02.2024

Loan
situation

Amount
decided

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

Outstanding
Outstanding
amount
amount
at 30.06.2009
at 31.12.2009
in EUR million in EUR million

(b)

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

(b)
(c)
(c)

(b)
(c)

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

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

(c)
(c)
(c)

50 000.00

5 000.00

9 200.00

6 500.00

3 100.00

5 000.00

4 000.00
 500.00
 500.00
1 000.00
1 000.00
1 000.00
 212.50

 223.50

4 000.00
2 000.00
2 000.00

1 000.00
1 000.00

5 500.00
2 000.00
2 000.00
1 500.00

2 200.00
1 000.00
1 200.00

1 500.00
1 500.00

 430.50

 426.75

 40.00
 12.00
 25.00
 22.50
 35.00
 30.00
 25.00
 17.50

 100.00
 90.00
 33.50

 40.00
 11.25
 25.00
 21.25
 33.25
 30.00
 25.00
 17.50

 100.00
 90.00
 33.50

54 000.00

5 430.50

9 626.75

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   COUNTRY

TABLE A3b (1)
 European Union (MFA) and Euratom loans to non-member States*
Changes in amounts outstanding during six-month period 30.06.2009 to 31.12.2009, 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 30.06.2009

Loan
term
(years)

    BULGARIA IV*
     1st tranche
     2nd 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
    FYROM I
     1st tranche
     2nd tranche
    FYROM II
     1st tranche
     2nd tranche
     3rd tranche
     4th tranche

99/731/EC

08.11.99

99/732/EC

08.11.99

99/325/EC

10.05.99

02/883/EC

09.11.02

97/471/EC

22.07.97

99/733/EC

08.11.99

10
-

10
10
 -

15
-

15
15

15
15

15
15
15
15

21.12.2009
-

29.06.2010
17.07.2013
 -

22.12.2014
-

16.01.2019
09.02.2021

27.09.2012
13.02.2013

15.01.2016
30.01.2017
04.06.2018
23.12.2018

EN 

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

(c)
(c)

(c)
(c)
(a)

(c)
(c)

(c)
(c)

(c)
(c)

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

9 

in EUR million 

Operations in 
six-month period

Amounts
disbursed

Amounts
repaid

10.00
15.00

5.00

100.00
40.00
60.00
200.00  
100.00
50.00
50.00
20.00
10.00
10.00
20.00
10.00
10.00
40.00
25.00
15.00
50.00
10.00
12.00
10.00
18.00

10.00
30.00

25.00
50.00

10.00
10.00

10.00
10.00

20.00
12.00

10.00
12.00
10.00
18.00

Amount
outstanding
at 31.12.2009

0.00
15.00

25.00
50.00

10.00
10.00

10.00
10.00

15.00
12.00

10.00
12.00
10.00
18.00

EN 

 
  
 
 
TABLE A3b (2)
 European Union (MFA) and Euratom loans to non-member States
Changes in amounts outstanding during six-month period 30.06.2009 to 31.12.2009, 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 30.06.2009

Operations in 
six-month period

Amounts
disbursed

Amounts
repaid

Amount
outstanding
at 31.12.2009

  UKRAINE III
     1st tranche

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

98/592/EC

15.10.98

2002/639/EC
97/787/EC
97/787/EC
2000/244/EC

12.07.02
17.11.97
17.11.97
20.03.00

2001/549/EC
2002/882/EC

16.07.01
09.11.02

2004/580/EC
2007/860/EC

29.04.04
21.12.07

UKRAINE (Euratom)

94/179/EC

21.03.94
15.03.2007
06.10.2008
15.10.2009

10
-

15
15

15
15

15
15
15
15

30.07.2009
-

24.07.2013
30.12.2013

30.03.2016
17.10.2016

28.02.2018
01.09.2018
04.05.2020
23.03.2021
04.06.2014

11

15.03.2018

TOTAL

EN 

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

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

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

10 

150.00
58.00
92.00
110.00
110.00
28.00
75.00
60.00
225.00
55.00
10.00
30.00
15.00
9.00
50.00

EUR equivalent 

39.00 EUR
22.00 USD
10.34 USD

of USD 83 million

14.50

57.50

28.00
225.00

10.00
30.00
15.00
9.00
25.00

49.55
35.10
14.45

750.11

7.10

7.10

14.50

0.00

22.00

35.50

28.00
225.00

10.00
30.00
15.00
9.00
25.00

53.91
33.15
13.66
7.10

1.95
0.80

69.25

638.41

EN 

 
  
 
 
TABLE A4

LOAN GUARANTEES TO EIB

in EUR million 

Geographical Area

Decision

Date
of decision

Rate
of guarantee

MED. Financial protocols(1)

MED. Horizontal cooperation

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

Amount
decided

Loans signed

Amount outstanding

        (minus cancellations)

at 30.06.09

at 31.12.09

at 30.06.09

at 31.12.09

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

 615

 340

 955

 102

 5

 507

 125

 5

 9

 12

2 578

 112

 55

 526

 494

 357

 851

 90

 2

 455

 114

 5

 7

 5

2 421

 107

 71

 515

2005/48/EC(10)

22.12.04

19.07.00/24.07.00 (11)

06.05.02/07.05.02

19 460

 100

18 910

 85

18 784

 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

25 800

67 702

8 611

47 018

11 928

50 209

(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
(use to be decided in the context of ongoing mid-term review).

11 058

11 390

 77

 3

1 188

17 317

 74

 76

3 041

19 223

EN 

11 

EN 

 
  
 
 
1.3. 

Evolution of risk 

1.3.1. 

Situation of loans to non euro area Member States 

The  risk  towards  Member  States  for  the  loans  disbursed  under  Euratom,  MFA  and  EIB 
guaranteed  financing  should  decrease  in  future  due  their  amortization.  These  loans  were 
signed before the accession of these countries to the EU. 

However,  the  total  risk  towards  Member  States  is  increasing  since  2008  following  the 
activation of the Balance-of-Payment3 facility (BoP). BoP loan disbursements are planned up 
to  2012.  Hungary  will  reimburse  in  2011  its  first  tranche  of  EUR 2 billion  disbursed  in 
December 2008 (included in Graph A1). 

Two other tranches of EUR 1 billion for Latvia and EUR 2 billion for Hungary, disbursed in 
2009  will  be  reimbursed  in  2014.  Three  additional  tranches  totalling  EUR 4.2 billion 
disbursed during the second semester 2009 will be reimbursed in 2015 and 2016. 

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 31.12.20094 with the Member States (EUR million). 

4 000 

3 500 

3 000 

2 500 

2 000 

1 500 

1 000 

500 

-

Euratom

MFA

EIB

BOP

2010

2011

2012

2013

2014

2015

2016

3 
4 

Council Regulation (EC) No 431/2009 of 18 May 2009 (OJ L 128, 27.5.2009, p.1-2). 
As of 31 December 2009, the 2010 annual risk for Member States was EUR 890 million. 

EN 

12 

   EN 

 
 
 
                                                 
1.3.2. 

Situations of loans to third countries 

At  31  December  2009,  a  total  of  EUR 3 988 million  remained  to  be  disbursed  by  the  EIB 
under the EUR 20 060 million EIB external lending mandate for 2000– 2007: 

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
31.12.2009***

EUR million

to be disbursed

6 520
10 235
2 480
 825

20 060

6 325
7 338
2 135
 824
2 763

19 384

1 306
1 860
 91
 108
 624

3 988

* 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.
*** Signatures up to 31.07.2008

At the same date, an amount of EUR 8 884 million remained to be disbursed out of signatures 
made under the EIB external mandate for 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

*the current mandate only covers the period until 31 October 2011.

Ceiling

Loans made available
(minus cancellations) at
31.12.2009

EUR million

to be disbursed

8 700
12 400
3 800
 900

25 800

5 262
4 262
1 921
 483

11 928

4 184
3 117
1 141
 443

8 884

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 31.12.2009 with third countries (EUR million). 

2000

1800

1600

1400

1200

1000

800

600

400

200

0

Euratom

MFA

EIB

2010

2011

2012

2013

2014

2015

2016

EN 

13 

   EN 

 
 
 
 
 
 
 
 
Graph A3  presents  the  result  of  simulations  of  disbursement  scenarios  under  the  mandates 
preceding the current EIB external mandate, as well as under the current mandate, established 
for  the  period  1  February  2007—31  October  2011  by  Decision  No  633/2009/EC  of  the 
European Parliament and of the Council. 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  2010  to  2016  (EUR 
million). 

32 000

29 500

27 000

24 500

22 000

19 500

17 000

14 500

12 000

Euratom
MFA
EIB

2010

2011

2012

2013

2014

2015

2016

1.4. 

Payment under the Budget guarantees 

1.4.1.  Borrowing/lending operations 

The  EU  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 
EU. If the recipient of the loan is in default, the Commission will first draw on its own cash 
resources to ensure a timely repayment of the EU borrowing on the contractual due date. 

Should  the  amounts  needed  for  the  necessary  cash  coverage  exceed,  in  a  certain  period  or 
date,  the  available  Commission's  treasury  balances,  the  Commission  would,  in  accordance 

EN 

14 

   EN 

 
 
with Article 12 of Council Regulation 1150/20005, draw on additional cash resources from the 
Member States in order to fulfil its legal obligations towards its lenders.  

In  the  case  of  BoP  loans,  where  reimbursed  amounts  can  be  very  high,  the  beneficiary 
Member States are requested to deposit the amounts due at the European Central Bank seven 
business  days  in  advance  of  the  contractual  due  date.  This  gives  enough  time  for  the 
Commission and Member States to provide for the cash advance to ensure timely repayment 
in case of default. 

In a second step, the treasury situation will be regularised as follows: 

Euratom and MFA loans: 

a) 

b) 

if the payment delay reaches three months after the due date, the Commission draws 
on the Fund to cover for the default and obtain the necessary funds to replenish its 
treasury.  

the Commission might also need to draw on the Budget, most likely by means of a 
transfer to provide the corresponding Budget line under article "01 04 01 European 
Community  guarantees  for  lending  operations"  with  the  necessary  appropriations 
needed  to  cover  the  default.  This  method  is  used  when  there  are  insufficient 
appropriations in the Fund or if the borrower is a Member State6 and the transfers are 
likely to require advance authorisation by the budgetary authority  

c) 

by the re-use of recovered funds, if any. 

Balance of Payments (BoP) loans: 

a) 

b) 

by the re-use of funds from late payments 

the  Commission  may  also  need  to  propose  a  transfer  or  an  Amending  Budget  to 
budget the cash advance under the corresponding budget line "01 04 01 01 European 
Community guarantee for Community loans raised for balance-of-payment-support".  

1.4.2.  Guarantees given to third parties 

The  EU  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 Commission 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, either from the Fund or directly from the Budget (should the 
resources of the Fund be insufficient). 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. 

5 

6 

Council  Regulation  (EC,  Euratom)  No  1150/2000  of  22  May  2000  (OJ  L  130,  31.5.2000,  p.1-12) 
implementing  Council  Decision  2007/436/EC,  Euratom  of  7  June  2007  on  the  system  of  European 
Communities' own resources (OJ L 163, 23.6.2007, p. 17-21). 
Regarding the loans and loans guaranteed to accession countries, they were covered by the Guarantee 
Fund and remained outstanding after the date of accession. From that date, they ceased to be external 
actions of the Union and are therefore covered directly by the Budget. 

EN 

15 

   EN 

 
                                                 
Since  the  entry  into  force  of  the  Regulation  establishing  the  Guarantee  Fund  for  external 
actions7, the provisions of the Agreement between the EU 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. 

1.4.3.  Activation of Budget guarantees 

If  a  borrower  defaults  on  an  EIB  financing  operation  guaranteed  by  the  Budget,  the  EU 
guarantee  is  called  upon  at  the  earliest  three months  after  the  date  on  which  payment  has 
fallen due. The EU 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 if the beneficiary is a non-Member State or to receive payment from the Budget if 
the beneficiary is a Member State (see 1.4.2 above). 

For loans granted by the EU or Euratom, default interest is owed by loan beneficiaries for the 
time between the date on which cash resources are made available by the Budget and the date 
of  repayment  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. 

7 

Council  Regulation  (EC,  Euratom)  No  480/2009  of  25 May 2009  establishing  a  Guarantee  Fund  for 
external actions (codified version), the "Guarantee Fund Regulation" (OJ L 145, 10.6.2009, p.10). 

EN 

16 

   EN 

 
                                                 
2. 

COUNTRY-RISK EVALUATION 

Third  countries  representing  important  risks  to  the  Budget  in  2010,  notably  through  EU 
macro-financial assistance,  Euratom loans  or  guaranteed 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  included  in  the  country  risk 
evaluation  .  The  evaluation  presented  below  comprises  short  analyses  and  tables  of  risk 
indicators. 

Explanatory notes for country-risk indicators 

Standard footnotes 

1) 

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

2) 

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 risk 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 

17 

   EN 

 
 
 
2.1. 

Candidate countries 

2.1.1.  Turkey 

The economic crisis hit Turkey markedly in 2008 and 2009. After having decelerated to 0.7% 
in  2008,  real  GDP  growth  fell  by  4.7%  y-o-y  in  the  first  half  of  2009.  Collapsing  external 
demand  led  to  a  double-digit  decline  of  exports  while  a  lower  availability  of  external 
financing and domestic credit depressed private consumption and investment. The recession 
bottomed out in the first quarter of 2009, and the economy is recovering more strongly than 
anticipated, in large part due to the fiscal stimulus. Overall, economic output is expected to 
decline by about 5% in real terms in 2010.  

The trade and current deficits declined substantially in 2009 as imports shrunk by more than 
25%  in  volume  terms  and  the  terms  of  trade  improved  on  lower  oil  and  commodity  prices. 
Both  the  public  and  private  sector  continued  to  roll-over  external  debt  at  reasonable  rates 
despite the decline in economic activity and tighter domestic lending conditions.  

Gross  FDI  inflows  fell  from  2.4%  of  GDP  in  2008  to  about  1%  of  GDP  2009.  Turkey's 
external debt declined by about 2% in nominal terms in 2009 and currently amounts to about 
33%  of  GDP.  Private  external  debt  represents  two  thirds  of  the  total  debt  and  is  also  on  a 
declining trend. International reserves fell by about 2% to EUR 78 billion but still cover about 
5 months of imports. As a result of the improved risk-appetite for emerging markets in 2009, 
the domestic currency recovered some of the losses incurred previously against the USD and 
the EUR. 

EN 

18 

   EN 

 
Country-risk indicators:  Turkey

2007

2008

2009

Out put  and prices

Real GDP growth rate
Unemployment (end of period)
Inflation rate (CPI) (Dec/Dec)

General governm ent  balance

Balance of  paym ent s

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
Exchange rate (end of period)

Ext ernal debt

External debt  (end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(%)
(% labour force)
(% ch an g e)

(% of GDP)

4.7
10.6
8.4

-1.0

0.7
11.0
10.1

-2.2

-4.7
14.0
6.5

-6.7

(m €)
(% of GDP)
(m €)

(TL p er  €)

(m €)
(%)
(%)
(m €)

(m EUR)
(%)    (1)
(%)
(%)

105 598

119 607

102 519

14595

10723

4374

72208
5.0
1.72

183 692
28.3
33.7
no

no

2285
22.4
1.8
3.2

79235
5.0
1.90

208 203
28.1
29.0
no

no

4848
34.5
3.2
5.6

SBA
(05/08)
yes

SBA
(until 05/08)
yes

78167
5.0
2.20

203 000
32.9
35.6
no

no

5705
35.1
4.0
8.0

none

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)

(1) (2)   See explanatory notes

Ba3
BB-
03/07   09/07
72    68
(185)   (185)

Ba3
BB-
03/08  09/08
69      76
(185)   (186)

Ba3
BB-
03/09     09 /09
68    67
(186)   (186)

(2)

EN 

19 

   EN 

 
 
2.2. 

Potential candidate countries  

2.2.1. 

Serbia 

Severely strained by the impact of the global recession, Serbia’s GDP shrank by 3% in real 
terms  in  2009,  down  from  5.5%  in  2008.  Economic  growth  turned  negative  as  domestic 
demand – which was the driving force of the economy over the past year – contracted very 
substantially. The trade deficit remained relatively high at slightly over 15% of GDP, against 
20% in GDP in 2008. The balance of payments position improved thanks to a record inflow of 
remittances of EUR 2.6 billion as well as the agreement with foreign parent banks to maintain 
their exposure at the 2008 level and IMF funding. Given the repercussions of the global crisis 
on the economic situation and outlook, Serbia's economic stabilisation and recovery has been 
supported by an IMF Stand-By Arrangement since January 2009. The conclusions of the third 
review in February 2010 were positive and the third tranche of the loan of EUR 360 million 
was  made  available  for  release  in  May.  The  authorities  decided  to  draw  only  half  of  the 
planned  instalment,  which  brings  total  disbursements  under  the  current  programme  at  about 
EUR 1.3 billion. In line with the IMF conditions, the government has put in place a number of 
fiscal expenditure measures.  

In 2009, Serbia's fiscal position deteriorated, with the general government deficit estimated to 
have increased to 4.2% of GDP from 2.5% in 2008 and public debt up at 31.3% of GDP from 
25.6%  in  2008.  On  the  other  hand,  inflationary  pressures  eased  somewhat  during  2009.  By 
December, CPI inflation declined to 6.6% year-on-year (8.6% in 2008), mainly due to weak 
aggregate demand following the freeze of public sector wages while the pass-through of the 
exchange rate depreciation (the dinar lost 25% of its nominal value against the euro between 
2008–2009) has been limited. 

EN 

20 

   EN 

 
Country-risk indicators : Serbia

2007

2008

2009

Input  and prices

Real GDP growth rate
Unemployment (end of period)
Inflation rate (RPI) (Dec/Dec)

General governm ent  balance

Balance of  paym ent s

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
Exchange rate (end of period)

Ext ernal debt

 External debt (end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(%)
(% labour force)
(% ch an g e)

(% of GDP)

6.9
18.8
11.0

-2.0

(m €)
(% of GDP)
(m €)

(CSD p er  €)

(m €)
(%)
(%)
(m €)
(a)

(m EUR)
(%)  (1)
(%)
(%)

8 686
-15.5
1 821

10 882
6.3
79.24

17 718
60.2
no
1 763
no

812
8.0
4.5
12.6

no

5.5
14.7
8.6

-2.5

10 157
-17.1
1 824

9 110
7.7
88.60

21 725
63.6
42.8
2 161
no

1194
8.5
5.6
16.1

no

-3.0
17.4
6.6

-4.2

8 478
-5.7
1 372

12 027.0
9.6
95.90

22 713
72.3
57.7
no

no

1318
8.1
5.8
15.5

01 (05 rev.) 2009
yes

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)

(b)

(2)

none
BB-
03/07   09/07
87     87
(185)   (185)

none
BB- (negative)
03/08  09/08
88   126
(185)   (186)

none
BB- (stable)
03/09     09 /09
122    149
(186)   (186)

Footnotes
(a) 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.

(b) Serbia B+, Montenegro BB.
(1) (2)   See explanatory notes

EN 

21 

   EN 

 
 
2.3.  Mediterranean partners 

2.3.1. 

Jordan 

Following a strong performance in 2008, GDP growth dipped to 2.4% in 2009. Exports fell 
2%  compared  to  2008  while  investment  declined  slightly  driven  by  a  decline  in  FDI  from 
surrounding Arab states as oil earnings shrunk. The slowdown affected growth in a number of 
sectors,  particularly  construction,  real  estate,  and  export  industries.  Private  consumption 
growth  slowed  to  2.5%  in  2009,  due  in  part  to  a  slackening  labour  market  and  falling 
remittances. The government deficit expanded to 12% of GDP, both on account of a fall in tax 
revenue  and  an  increase  in  capital  spending.  Despite  the  slowdown,  official  unemployment 
only rose slightly given the large number of migrant workers in the sectors most affected who 
are ineligible for benefits. 

Inflation,  which  had  been  declining  since  the  third  quarter  of  2008,  went  into  negative 
territory  in  the  second  quarter  of  2009  before gradually  increasing.  Annual  average  CPI  for 
2009  was  2.7%  compared  to  14.9%  in  2008.  Both  trade  and  current  account  balances 
narrowed, mainly on account of lower commodity prices. The current account deficit fell from 
11.9% of GDP in 2008 to 6% of GDP in 2009. Jordan's banking sector has not been seriously 
affected  by  the  global  crisis  on  account  of  limited  exposure  to  international  property  and 
equity  markets.  As  a  precautionary  measure,  the  government  guaranteed  all  bank  deposits 
until the end of 2009. There are early signs that growth in the economy will recover in 2010, 
as  exports  and  investment  have  started  to  increase,  while  public  finances  are  set  to  be 
tightened.  GDP  growth  is  predicted  to  accelerate  slightly  to  2.7%  in  2010.  The  current 
account  deficit  is  expected  to  remain  at  around  6%  of  GDP  in  2010,  supported  by  strong 
growth in the tourism sector. The fiscal stance is expected to be tightened as the government 
intends to reign in current expenditure with the deficit predicted to be 11% in 2010. Inflation 
is  projected  to  rise  to  around  5%,  on  average,  for  2010  mainly  due  to  the  reversal  in 
international commodity prices. 

EN 

22 

   EN 

 
Country-risk indicators : Jordan 

2007

2008

2009

Out put  and prices

Real GDP growth rate
Unemployment (average)
Consumer price Inflation (average)

General governm ent  balance

Balance of  paym ent s

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
Exchange rate (end of period)

Ext ernal debt

External debt  ( end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

External debt (end of period)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(%)
(% labour force)
(% ch an g e)

(% of GDP)

(bn USD)
(% of GDP)
(bn USD)

(JOD p er  USD)

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

(bn USD)
(%)     (1)
(%)
(%)

6.6
13.1
5.7

-8.2

6.4
-17.0
2.1

7.9
8.5
0.7

7.4
49.2
no
no
no

302
3.0
2.8
6.9

no

5.6
12.7
9.4

-9.9

7.2
-11.9
1.8

8.9
9
0.7

5.2
30.0
no
no
no

299
2.1
4.1
5.8

no

3.1
13.5
6.7

-12.9

7
-6.8
n.a.

10.2
10
0.7

5
30.8
no
no
no

369
2.3
5.1
7.6

no

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)

Ba3
BB

Baa3
BB

03/07   09/07 03/08  09/08

75   74
(185)   (185)

74    75
(185)   (186)

Ba2
BB
03/09  09/09
73   69
(186)   (186)

(2)

Footnotes
(1) (2)   See explanatory notes 

EN 

23 

   EN 

 
 
2.3.2.  Egypt 

Egypt was affected in 2009 by the global crisis via the external trade and services channels. In 
line with the sharp drop in world trade, exports of Egyptian goods slowed down; in addition, 
the  decline  in  income  from  tourism  and  the  Suez  Canal  negatively  impacted  the  Egyptian 
economy. While economic growth was mainly fuelled by investment and exports in the years 
before 2009, private and government consumption were the main drivers in 2009.  

Although  gross  government  debt  is  still  high  at  73%  of  GDP,  general  government  public 
finances  have  deteriorated  only  slightly  despite  the  lower  economic  growth.  Reforms  in  tax 
collection have improved tax revenues. Moreover, the general government debt was on a clear 
declining path when the crisis started. The government deficit in fiscal year 2009 was 6.9% 
and  will  be  around  8%  of  GDP  in  2010.  High  unemployment  remains  a  serious  concern. 
About  9%  of  the  labour  force  is  unemployed.  The  relatively  fast  population  growth  is  one 
reason  for  persistent  unemployment.  Also,  a  surge  in  wages  has  hampered  the  creation  of 
jobs. Job creation is essential for absorbing the continuing high annual inflow into the labour 
force and the pool of existing unemployed. Youth employment remains high. 

After  several  years  of  surplus,  the  current  account  balance  became  negative  in  2009. 
Revenues  from  tourism,  private  transfers,  remittances  and  the  Suez  Canal  no  longer 
compensated for the trade deficit. Net FDI more than halved from 7.5% of GDP in 2008 to 
3.5% in 2009. The negative current account and lower foreign direct investments pushed the 
balance of payments into deficit in 2009.  

The  currency  regime  is  a  managed  float.  The  central  bank  pursues  an  inflation  targeting 
regime.  In  support  of  the  Egyptian  pound,  the  central  bank  intervened  occasionally  in  the 
foreign  exchange  market.  Nonetheless,  official  foreign  exchange  reserves  remained  stable 
during the crisis, and are also expected to reach more than 15% of GDP in 2010.  

EN 

24 

   EN 

 
Country-risk indicators: Egypt

2007

2008

2009

Out put  and prices

Real GDP growth rate
Unemployment (average)
Consumer price Inflation (average)

General governm ent  balance

Balance of  paym ent s

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
Exchange rate (end of period, + is depreciation of LE)

Ext ernal debt

External debt (end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

EU exposure (capital and interest due)
EU exposure/total EU exposure  (a)
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(%)
(% labour force)
(% ch an g e)

(% of GDP)

(bn USD)

(% of GDP)
(bn USD)

(LE p er  EUR)

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

(m EUR)
(%)   (1)
(%)
(%)

7.1
10.3
11.0

-7.7

42

1.7
10.6

31.4
5.3
7.5

32.8
22.8
6.4
no
no

1680
16.5
8.3
5.8

7.2
8.9
11.7

-7.8

57

0.5
7.0

33.8
6.7
8.1

32.6
20.1
5.6
no
no

2141
15.2
8.8
5.3

4.7
9.1
16.2

-6.9

49

-0.4
2.8

34.2
5.8
7.6

29.7
17.0
6.8
no
no

2241
13.8
5.2
6.6

no

no

no

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)

(2)

Footnotes
(1) (2)   See explanatory notes

Ba1
BB+

Ba1
BB+
03/07   09/07 03/08   09/08 03/09   09/09
68   68
(185)   (186)

71      69
(185)   (185)

70   70
186   186 

Ba1
BB+

EN 

25 

   EN 

 
 
2.3.3.  Lebanon 

The  Lebanese  economy  had  a  quite  robust  performance  in  2009,  in  spite  of  the  global 
financial  crisis.  Real  GDP  growth  is  estimated  at  5.5%  on  average  in  2009,  from  8.5%  in 
2008.  The  financial  sector  proved  remarkably  resilient  to  the  politically  uncertain 
environment,  with  a  government  of  national  unity  only  formed  towards  the  end  of  2009. 
Trade volumes decelerated from the beginning of 2009 onwards, mirroring the slowdown in 
major trading partners, notably Arab countries and the countries in the EU, which account for 
around  50  and  17  percent  of  Lebanese  exports  respectively.  Persistently  high  interest  rate 
spreads to international benchmarks kept financing costs up.  

But  several  other  factors  acted  in  support  of  the  economy.  Inflationary  pressures  abated 
sharply  from  the  latter  part  of  2008.  Consumer  price  inflation  fell  from  more  than  10%  in 
2008  to  around  1%  in  2009.  In  addition,  despite  a  clear  negative  impact  of  the  crisis  on 
tradable industries (exports contracted by 18%) the Lebanese banking system has been quite 
resilient.  Share  prices  also  recovered  from  the  trough  in  spring  2009,  in  line  with  global 
trends.  The  current  account  deficit  broadly  stabilised  in  2009,  at  around  11%  of  GDP.  The 
total external debt ratio declined  only moderately  in  the last  few  years,  to  187%  of  GDP  in 
2009.  

The  government  budget  balance  (including  grants)  is  expected  to  have  broadly  stabilised  at 
around 10% of GDP in 2009. Total public expenditure increased by around 15%, of which is 
a  large  part  is  going  to  service  the  public  debt.  International  support  did  help  alleviate  the 
pressure on public finances. This included the first tranche of grants and loans (EUR 15 and 
EUR25  million  respectively)  under  the  EU  macro  financial  assistance  (MFA)  facility 
(payments were made in December 2008 and May 2009 and will be primarily used for debt 
reduction). 

In 2010, real GDP growth is expected to slow down to slightly above 2%. The high cost of 
credit will weigh on private consumption and investment spending.  Inflation  would pick up 
moderately to 2.4 on average in 2010. Key fiscal ratios are not expected to improve markedly, 
whereas the deficit on the current account is projected to remain at around 10% of GDP. 

EN 

26 

   EN 

 
Country-risk indicators: Lebanon

2007

2008

2009

Out put  and prices

Real GDP growth rate
Unemployment rate (average)
Inflation rate (CPI, av)

General governm ent  overall balance

Balance of  paym ent s

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
Exchange rate (av)

Ext ernal   debt

 External debt  (end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

External debt (end of period)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(%)
(% labour force)
(% ch an g e)

7.5
n.a.
4.1

(% of GDP)

-10.8

(m USD)
(% of GDP)
(m USD)
(gross useable)

(L£ p er  USD)

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

(bn USD)
(%)  (1)
(%)
(%)

4077
-7.1
1.875

19.80
4.9
1508

48 500
194
41
no
no

354
3.5
0.5
12.8

no

8.5
n.a
10.8

-10.0

5259
-11.4

2.608 

25.94
7.7
1508

54 791 
187.0 

33.6
no
no

508
3.6
0.7
13.4

5.5
n.a
1.1

-10.5

4838
-11.3
2.8

34.67
9.7
1508

61 149 
187.0 
no
no
no

539
3.3
0.6
16.0

EPCA II
adopted 3-11
yes (concluded June 2009)

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)

B3
B-
03/07   09/07
111    116
(185)   (185)

B 3
B-
03/08   09/08
127   134
(185)   (186)

B2
B-
03/09  09/09
102   80
(186)   (186)

(2)

Footnotes
(1) (2)   See explanatory notes

EN 

27 

   EN 

 
             
           
   
             
     
 
2.3.4.  Tunisia 

Despite  the  global  financial  and  economic  crisis,  the  performance  of  the  Tunisian  economy 
remained overall robust in 2009. Economic growth slowed down to 3.0% in 2009, from 4.6% 
in  2008  and  is  expected  to  accelerate  to  3.7%  in  2010.  During  the  global  recession  the 
Tunisian economy suffered via the trade channel from the lower global demand, in particular 
from the drop in EU activity.  

During  the  global  crisis  macroeconomic  measures,  both  fiscal  and  monetary  policies 
supported  the  economy.  To  offset  the  fall  in  private  investment  linked  to  the  global  crisis, 
national  authorities  put  in  place  a  stimulus  package  of  1.3%  of  GDP  destined  mainly  for 
public investment in infrastructure, education, energy and health. 

The expansionary fiscal policy and a fall in tax revenues meant that the fiscal deficit increased 
from  -0.8%  of  GDP  in  2008  to  6.3%  in  2009.  Public  debt  slightly  increased,  from  47%  of 
GDP in 2008 to 53% in 2009. Expectations are that the deficit will narrow to 5.2% in 2010, 
while  the  debt  stock  will  further  increase  to  56%.  Tunisia's  public  finance  position  has 
become more vulnerable in view of the rising debt stock, and the relatively high foreign debt 
(more than 50% in 2010).  

Consumer  price  inflation  remained  remarkably  stable  at  4%.  The  authorities  remain 
committed to adopting a formal inflation targeting regime. The Tunisian dinar remains pegged 
to a basket of currencies with the euro having the largest share. The dinar depreciated 4% vis-
à-vis  the  euro  and  10%  vis-à-vis  the  US  dollar  in  2009,  which  helped  limit  the  decline  in 
Tunisian exports. Nonetheless, due to lower exports the current account balance widened in 
2009 and is expected to widen further in 2010 up to almost 7% of GDP. Gross reserves are 
expected to reach 30% of GDP in 2010. 

EN 

28 

   EN 

 
Country-risk indicators : Tunisia

Out put  and prices

Real GDP growth rate
Unemployment (average)
Consumer price inflation (average)

General governm ent  balance

Balance of  paym ent s

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
Exchange rate (end of period)

Ext ernal debt

External debt  (end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

EU exposure (capital and interest due)
EU exposure/total EU exposure     
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(%)
(% labour force)
(% ch an g e)

(% of GDP)

(bn USD)
(% of GDP)
(bn USD)

(TD p er  USD)

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

(m EUR)
(%) (1)
(%)
(%)

2007

2008

2009

6.3
14.1
3.1

-2.9

15.0
-2.6
1.5

7.9
4.6
1.27

20.4
54.9
16.5
no
no

5.0
14.0
5.1

-1.2

19.2
-4.2
2.3

8.9
4.1
1.31

20.7
51.8
11.0
no
no

2.5 

14.3
3.8

-3.8

15.1
-3
1.3

10.2
4.2
1.35

19.9
51.2
22.4
no
no

1 562

1 683

1900

15.3 
11.3 
15.3 

12.0 
11.3 
12.2 

11.7 
13.8 
18.1 

no

no

no

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)

(2)

Footnotes
(1) (2)   See explanatory notes

Baa2
BBB 

Baa2
BBB 
03/07  09/07 03/08  09/08 03/09   09/09
62    64

Baa2
BBB 

62    64

  53       52
  (186)  (186)

(185)    (185) (185)) (186)

EN 

29 

   EN 

 
                 
         
          
               
         
          
               
         
          
               
 
2.3.5.  Morocco 

Morocco showed strong resilience to the global crisis and attained investment grade status in 
2009. GDP growth only moderated to 5.2% in 2009 from 6.2% in 2008, while it is expected to 
dip  slightly  in  2010,  to  4.1%  of  GDP,  partly  restrained  by  higher  import  prices.  The  crisis 
mainly affected the external side of the economy in 2009, with a negative impact on exports, 
particularly  phosphate-based  products,  tourism,  remittances  and  inward  investment.  Exports 
fell by 10% compared to a year earlier. On the other hand, a wider slowdown was averted due 
in  part  to  strong  growth  in  the  agricultural  sector  on  account  of  a  bumper  harvest.  Private 
consumption continued to grow at 8% in 2009 partially supported by an expansion in public 
finances as well as a decline in unemployment. Unemployment continued to fall to a record 
low level of 9%, but could rise again quickly as many new jobs were the result of seasonal 
hiring  in  the  large  agricultural  sector,  which  accounts  for  about  15%  of  GDP  and  employs 
around 40% of the workforce. 

After registering a mild surplus in 2008, the general government balance turned negative in 
2009 mainly on account of lower tax revenues from slowing economic activity and reductions 
to  personal  and  corporate  income  tax,  as  well  as  an  increase  in  capital  expenditure.  The 
government  proceeded  with  an  extensive  social  housing  programme  providing  a  boost  to 
investment. On the other hand, these factors were partly compensated for a significant decline 
in spending on subsidies, due to the fall in international commodity prices and better targeting 
of  food  subsidies.  The  budget  deficit  was  2.1%  of  GDP  for  2009,  while  this  is  expected  to 
widen to 4.3% in 2010 on account of further reductions in taxation and increased spending on 
subsidies. Despite the fiscal expansion, the level of government debt fell slightly, to 55% of 
GDP, due to firm growth in the economy.  

Since  the  end  of  2008,  the  CPI  has  been  gradually  declining  driven  by  a  reversal  in 
commodity prices. The CPI was around 1% on average for 2009 compared to 3.9% in 2008. 
The  current  exchange  rate  regime  is  tightly  managed  against  a  euro-dominated  basked  of 
currencies.  The  authorities  have  taken  gradual  steps  to  lessen  currency  controls  with  the 
prospect  of  introducing  a  fully  floating  currency  in  the  future.  The  current  account  deficit 
narrowed  in  2009  to  -3.7%  of  GDP  due  to  a  marked  improvement  in  the  trade  balance, 
influenced by lower oil and wheat prices. This follows a consistent deterioration of the current 
account since 2007 due to a widening trade deficit, linked to a narrow export base and weak 
competitiveness. The current account deficit is expected to widen in 2010 to -6.5% of GDP, 
as the acceleration in imports outpaces that in exports. 

EN 

30 

   EN 

 
Country-risk indicators: Morocco

2007

2008

2009

Out put  and prices

Real GDP growth rate
Unemployment (average)
Wholesale price Inflation (average)

General governm ent  balance

Balance of  paym ent s

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
Exchange rate 

Ext ernal debt

 External debt (end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(%)
(% labour force)
(% ch an g e)

(% of GDP)

(bn USD)
(% of GDP)
(bn USD)

(MDH p er  USD)

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

(m EUR)
(%)   (1)
(%)
(%)

3.2
9.8
2.0

0.2

24.4
-0.3
2.2

24.7
10.0
7.7

20.5
26.8
8.0
no
no

1275
12.5
N/A
30.3

6.2
9.5
3.8

0.4

23.2
-6.6
2

22.7
9
8.1

20.8
22.5
6.5
no
no

1929
13.7
N/A
N/A

2.6
9.1
2

-1.1

21.5
-4.2
0.7

21.5
8.8
7.85

21.1
22.2
6.6
no
no

2224
13.7
N/A
N/A

no

no

no

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)

Ba1
BB+

Ba1
BB+

03/07    09/07 03/08   09/08

65     65
(185)    (185)

66      63
(185)   (186)

Ba1
BB+
03/09  09/09
63    54
(186)    (186) 

(2)

Footnotes
(1) (2)   See explanatory notes

2.3.6. 

Syria 

After  achieving  average  real  GDP  growth  above  5%  over  the  last  three  years,  despite  a 
drought  in  the  north-east  of  the  country,  growth  dipped  to  3.6%  of  GDP  in  2009.  This  was 
mainly due to the impact of the global economic crisis which hit export demand and inward 
investment.  Export  earnings  declined  by  around  25%  in  2009  and  are  expected  to  only 
gradually recover in 2010 due to lower agricultural prices. Inward investment fell driven by a 
decline  in  FDI  from  the  Gulf  region.  Remittances  also  fell  as  the  employment  market  for 
Syrians  working  overseas  deteriorated.  The  agricultural  sector  grew  strongly  in  2009  albeit 
from  a  low  base  produced  by  two  years  of  contraction  due  to  drought.  This  partially 
compensated  for  a  decline  in  industrial  output.  Private  consumption  growth  accelerated, 
however,  in  part  due  to  an  expansionary  fiscal  stance.  The  government  deficit  expanded  to 
5.7%  of  GDP  mainly  due  to  a  sharp  fall  in  tax  revenue  due  to  falling  oil  production.  Fuel 
subsidies have been substantially reduced but remain a fiscal burden.  The  public  debt stock 
remained low at 33.7% of GDP in 2009 and is expected to remain near that level in 2010. 

EN 

31 

   EN 

 
 
Consumer  price  inflation  declined  in  2009  mainly  on  account  of  the  drop  in  global  demand 
and associated lower global commodity prices. In some months there was even deflation. On 
average, the CPI reached almost 3 % in 2009. Inflation is however rising again strongly and is 
expected to average 6.5% in 2010. The exchange rate depreciated 8% vis-à-vis the US dollar 
and 13% vis-à-vis the euro in 2009. Trade and current account balances deteriorated, largely 
driven by the fall in the volume of crude oil exports and lower remittances. The only positive 
factor  in  the  development  of  the  current  account  was  an  increase  in  the  balance  of  services 
due  to  continued  growth  of  the  tourism  sector.  The  current  account  deficit  is  expected  to 
narrow in 2010. 

Country-risk indicators : Syria

2007

2008

2009

Out put  and prices

Real GDP growth rate
Unemployment (average)
Consumer price Inflation (retail, average)

General governm ent  balance

Balance of  paym ent s

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
Exchange rate (end of period)

Ext ernal debt

 External debt  (end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(%)
(% labour force)
(% ch an g e)

(% of GDP)

(bn USD)
(% of GDP)
(bn USD)

(SYR£ p er  USD)

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

(m EUR)
(%)   (1)
(%)
(%)

5.7
8.4
4.5

-3.1

13.6
1.1
1.1

6.4
11.6
51.1

5.9
14.5
1.2
no
no

378
3.7
9.4
4.1

no

4.3
8.6
15.2

-1.9

17.0
-1.4
2.1

6.7
9.4
46.0

5.7
10.5
0.8
no
no

536.1
3.8
13.1
4.4

2.9
9.2
2.8

-7.0

11.8
-2.8
1.9

6.0
10.4
45.5

5.5
10.4
0.9
no
no

762.8
4.7
20.0
9.3

no

no

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)

none
none

none
none

03/07  09/07 03/08   09/08

124   122
(185)   (185)

116   115
(185)  (186)

none
none
03/09   09/09
163    149
(186)  (186)

(2)

Footnotes
(1) (2)   See explanatory notes

2.4. 

Other countries 

2.4.1. 

South Africa 

South  African  real  GDP  contracted  by  1.8%  in  2009.  This  was  accompanied  by  a  sharp 
decline  in  employment  in  the  private  sector  and  a  rising  unemployment  rate.  Economic 
growth recovered from negative rates in the first half of 2009 to a small positive rate in the 

EN 

32 

   EN 

 
 
third quarter that strengthened considerably in the last quarter. For 2010 a growth rate of 2¾ 
percent can be expected. Inflation came down to 7.1% in 2009 after and should remain within 
the  3-6%  target  ban  in  the  medium  term,  despite  some  base  effects  that  are  likely  to  affect 
adversely  the  inflation  outcomes  in  the  short  term.  Domestic  consumption  expenditure 
remains weak and there are no perceived risks to the inflation outlook from this source. The 
public-sector  borrowing  requirement  was  budgeted  to  amount  to  R288  billion  in  fiscal  year 
2009/10 and projected to rise slightly further in 2010/11 The countercyclical widening of the 
general government deficit in response to deterioration in the economic outlook contributed to 
the increased borrowing requirement.  

Both  import  and  export  volumes  rose  at  the  end  of  2009.  At  the  same  time,  South  Africa’s 
terms  of  trade  improved,  which  contributed  to  a  modest  increase  in  the  trade  surplus  and  a 
narrowing of the current account deficit to slightly below 3% of GDP. As before, the current 
account deficit was financed with ease, most prominently through inward portfolio investment 
flows,  allowing  for  a  further  moderate  accumulation  of  gross  official  foreign  reserves  ($42 
billion in March). The value of the rand rose strongly from March till October 2009.  

EN 

33 

   EN 

 
Country-risk indicators: South Africa

2007

2008

2009

Out put  and prices

Real GDP growth rate
Unemployment (end of period)

Inflation rate (CPI) (Dec/Dec)

General governm ent  balance

Balance of  paym ent s

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
Exchange rate (end of period)

Ext ernal debt

 External debt (end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(%)
(% labour force)

(% ch an g e)

(% of GDP)

5.1
22.7

7.1

0.8

in bn US $
(m €)
(% of GDP)
(m €)

(SAR p er  EUR)

(m €)
(%)
(%)
(m €)

89.2
65074
-7.3
1922
$33,0bn
45234
3.7
10.04

55532
26.6
9.7
no

no

3.1
21.9

11.5

-0.7

97.9
66562
-7.1
8578
$34,1bn
50154
4.6
12.08

48689
25.9
9.6
no

no

-1.8
24.5

7.1

-4.4

78
56094
-4.0
2972
$39,7bn
55203
4.6
11.71

57722
27.3
9.6
no

no

(m EUR)
(%)     (1)
(%)
(%)

666 
6.5 
1.2 
1.1 

636 
4.5 
1.3 
0.9 

743 
4.6 
1.3 
1.4 

no

no

no

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)

(2)

Footnotes
(1) (2)   See explanatory notes

Baa1
BBB+

Baa1
BBB+
03/07   09/07 03/08   09/08 03/09  09/09
    55      54

A3
BBB+

55    55

(185))  (185) (185)   (186)

   50       47
(186)    (186) 

EN 

34 

   EN 

 
         
            
           
            
             
             
            
             
             
          
             
            
 
2.4.2.  Brazil 

Despite Brazil's initial resilience to the global crisis, its economy was significantly impacted 
in  2009  through  weaker  external  demand,  lower  commodity  prices  and  stressed  financial 
markets. However, economic activity bottomed out quite rapidly and started recovering in at 
the  end  of  2009.  In  2010,  growth  is  expected  to  turn  to  pre-crisis  levels.  By  contrast,  the 
economic recovery will improve the public sector balance, as fiscal revenue will rise. Overall, 
the fiscal deficit is forecast to improve from -3.3% of GDP in 2009 to around -2.4% in 2010. 
Monetary  policy  will  face  the  challenge  to  curb  mounting  inflationary  pressures.  On  the 
financial  markets  scene,  equity  markets  have  substantially  recovered,  international  markets 
have  reopened  for  the  Brazilian  sovereign  and  corporates  and  financial  conditions  have 
significantly improved.  

The recovery of global risk appetite has led to a surge in capital inflows, particularly portfolio 
inflows, while foreign direct investment, which had fallen more moderately during the crisis, 
also  started  recovering  already  in  2009.  The  Brazilian  currency  has  also  strongly  recovered 
from sharp depreciations in 2008/2009. Finally, current low external debt, large international 
reserves (amounting to above  USD 240bn) and well capitalised financial institutions should 
help the government to roll over the external debt due in 2010. 

EN 

35 

   EN 

 
Country-risk: Brazil

Output and prices

Real GDP growth rate
Unemployment (average)
Consumer price Inflation (average)

General governm ent  balance

Balance of  paym ent s

2007

2008

2009

(%)
(% labour force)
(% ch an g e)

(% of GDP)

5.4
9.3
4.5

-2.1

5.1
6.8
5.9

-1.9

-0.2
7.4
4.3

-3.5

Exports of goods and services f.o.b.

(bn USD)

116800

140539

110072

Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
   bn USD
   in months of imports of goods and services
Exchange rate (end of period, + is depreciation of LE)

Ext ernal debt

 External debt  ( end of period)
External debt/GDP
Debt service/exports of goods and services
Arrears (on both interest and principal)
Debt relief agreements and rescheduling

Indicators of EU exposure

EU exposure (capital and interest due)
EU exposure/total EU exposure
EU exposure/external debt
EU exposure/exports of goods and services

IMF arrangem ent s

Type
(Date)
On track

(en % du PIB)
(m  €)

0.3
25246

(r eais p er  €)

(m €)
(%)
(%)
(m €)
(m €)

(m EUR)
(%)   (1)
(%)
(%)

131127
14
2.6

177960
14.1
32

no
no

443
4.4
0.3
0.4

No

-1.7
17468

137585
13
3.3

170094
12.1
19

no
no

621
4.4
0.3
0.4

No

-1.5
18668

166787
22
2.5

142533
12.6
28

no
no

691
4.3
0.3
0.9

22/01/2010
2 years

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)

Ba1
BB+

Ba1
BBB-

03/07    09/07 03/08   09/08   

67     66
(185)    (185)

63    60
(185)    (186)

Baa3
BBB-
03/09   09/09
51   48
(186)   (186)

(2)

Footnotes
(1) (2)   See explanatory notes

EN 

36 

   EN