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 30 June 2010     COM(2011) 150 final
Date: 2011-03-29
Institutions: European Commission
Subjects: Community loan, EU Member State, budgetary reserve (EU), general budget (EU), investment protection, report, third country

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EUROPEAN COMMISSION 

Brussels, 29.3.2011 
SEC(2011) 371 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 30 June 2010  

COM(2011) 150 final 

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   EN 

 
 
  
 
 
 
 
 
 
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 30 June 2010 

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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 Member States...........................................................................12 

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

1.4. 

Payment under the Budget guarantees........................................................................15 

1.4.1.  Borrowing/lending operations ....................................................................................15 

1.4.2.  Guarantees given to third parties ................................................................................16 

1.4.3.  Activation of Budget guarantees ................................................................................17 

2. 

Country-risk evaluation ..............................................................................................18 

2.1. 

Candidate countries ....................................................................................................19 

2.1.1.  Turkey.........................................................................................................................19 

2.2. 

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

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

2.3. 

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

2.3.1.  Egypt...........................................................................................................................22 

2.3.2.  Lebanon ......................................................................................................................23 

2.3.3.  Tunisia ........................................................................................................................25 

2.3.4.  Morocco......................................................................................................................26 

2.3.5.  Syria............................................................................................................................27 

2.4. 

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

2.4.1.  South Africa................................................................................................................28 

2.4.2.  Brazil ..........................................................................................................................29 

2.4.3.  Mexico ........................................................................................................................31 

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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 30 June 20102. 

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 30.06.2010 (in EUR million)

Authorised
ceiling

Capital
outstanding at
31.12.2009

Capital
outstanding at
30.06.2010

Remainder
to be disbursed
at 30.06.2010

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

Sub total MFA
B. EURATOM2
C. Other
EIB Pre-Accession countries
EIB Neighbourhood and Partnership countries
EIB Asia and Latin America
EIB South Africa

3 533
90
427

5 500
2 200
1 500

13 250

9
40
77
36
25
280
28

 495
 54

6 333
6 641
2 049
 667

3 363
65
422

5 500
2 700
2 500

14 550

9
40
74
36
25
280
28

 492
 55

7 092
6 985
2 647
 743

6 500
3 100
5 000

14 600

9
40
90
142
50
280
75

 686

28 755
28 342
8 205
2 400

 652

1 000
 400
2 500

4 552

 25

 25
 9

5 722
4 554
1 185
 536

12 650
12 031
16 583

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. 

82 302
82 988
97 588

19 224
16 239
29 489

20 830
18 014
32 563

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

ANNEX TO TABLE A1: SITUATION IN RESPECT OF EIB OPERATIONS at 30.06.2010 (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 30.06.2010

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

13 125
5 793
4 608
3 860
 748
2 241
 616
1 625
 483

19 310
7 338
6 261
2 125
824
2 762
32 434
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
51 330

4 487
1 673
1 459
1 334
 125
1 289
 226
1 063
 65

15 538
5 748
5 123
1 816
683
2 168
20 025
6 075
 452
1 515
 683
 278
3 147
6 075
7 226
 728
4 539
1 959
7 226
5 261
 29
 169
 730
 204
4 129
5 261
38 586

4 365
1 672
1 343
1 333
 10
1 286
 226
1 060
 64

12 356
5 038
4 224
1 075
 566
1 454
16 721
2 505
 285
 606
 162
 109
1 344
2 505
 806
 92
 654
 60
 806
 797
 6
 158
 125
 4
 504
 797
20 830

(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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Sum of K + I in EUR million

Année de valeur2

Année de valeur

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 30.06.2010

Ranking

Country

2nd / 2010

2011

2012

2013

2014

2015

2016

2017 until 2040 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
Hungary
Romania
Egypt
Tunisia
Morocco
South Africa
Lebanon
Bulgaria
Poland
Czech Republic
Serbia
Syria
Slovak Republic
Brazil
Mexico
Jordan
Georgia
Bosnia and Herzegovina
Croatia
Argentina
The former Yugoslav Republic of Macedonia
Indonesia
Vietnam
Slovenia
Albania
the Philippines
Pakistan
Peru
Israel
Colombia
Cyprus
China
Ukraine
Latvia
Panama
India
Lithuania
Bangladesh
Russia
Sri Lanka
Ecuador
Thailand
The West Bank and the Gaza Strip
Montenegro
Maldives
Costa Rica
Malaysia
Uruguay
El Salvador
Laos
Estonia
Malta
Paraguay
Republic of Moldova
Tadjikistan
Total outstanding
Member States
Non Member States

 199,0
 146,7
 121,1
 98,3
 81,1
 81,1
 70,6
 55,5
 51,6
 42,1
 40,8
 35,4
 30,1
 27,3
 26,6
 25,3
 25,0
 22,2
 19,0
 17,4
 15,1
 13,5
 10,8
 8,9
 8,5
 7,6
 7,0
 6,8
 6,4
 6,4
 5,4
 5,1
 4,9
 4,6
 3,7
 3,6
 2,9
 2,8
 2,8
 2,7
 2,5
 2,4
 2,2
 2,2
 2,2
 2,2
 2,1
 1,7
 1,5
 1,2
 1,2
 0,5
 0,3
 0,2
 0,2
 0,1
1 368,7
450,5
918,1

 360,8
2 210,3
 382,6
 216,0
 153,8
 169,0
 73,0
 76,3
 75,5
 81,8
 73,3
 82,9
 76,8
 58,0
 57,0
 3,8
 49,2
 13,6
 37,4
 41,7
 26,7
 31,7
 17,1
 16,5
 14,3
 15,1
 13,7
 13,4
 20,2
 14,0
 14,6
 9,8
 8,7
 7,1
 98,5
 7,0
 3,2
 5,5
 5,5
 4,9
 5,3
 4,6
 5,2
 4,5
 4,5
 5,0
 4,2
 2,1
 3,5
 2,3
 2,6
 1,0
 0,7
 4,1
 0,3
 0,3
4 690,4
3.011,2
1.679,1

 395,5
 142,7
 329,7
 207,9
 159,1
 172,5
 94,1
 79,2
 87,5
 79,2
 70,7
 131,3
 78,6
 51,0
 50,4
 3,8
 48,7
 0,0
 61,7
 44,7
 23,1
 35,5
 14,8
 16,5
 11,4
 16,6
 14,3
 13,4
 21,2
 14,1
 20,8
 7,6
 7,9
 7,1
 96,8
 7,0
 8,2
 5,3
 5,5
 7,8
 8,2
 4,6
 7,1
 4,5
 12,8
 5,8
 4,2
 2,1
 4,0
 1,1
 2,8
 0,5
 0,7
 8,1
 0,3
 12,3
2 722,5
883,2
1.839,3

7 

EN 

 403,0
 133,6
 328,7
 205,1
 165,6
 175,6
 65,1
 78,6
 72,8
 73,3
 68,2
 137,0
 76,1
 37,2
 82,7
 3,8
 41,6
 0,0
 35,0
 44,7
 51,5
 32,2
 14,8
 17,4
 9,4
 14,7
 14,9
 10,1
 21,0
 14,3
 20,8
 5,0
 8,0
 7,0
 96,7
 7,0
 22,5
 5,1
 5,4
 7,7
 10,9
 4,6
 9,7
 4,5
 13,4
 5,8
 4,2
 1,0
 4,8
 1,6
 2,9
 0,0
 0,3
 16,3
 0,4
 12,1
2 705,9
830,3
1.875,6

 445,8
2 128,4
 309,2
 186,3
 161,6
 175,9
 67,5
 85,4
 73,4
 53,5
 56,4
 148,5
 75,3
 25,8
 115,3
 3,8
 36,9
 0,0
 34,2
 41,4
 41,4
 34,2
 14,8
 17,2
 7,4
 17,9
 16,3
 6,8
 17,1
 14,6
 20,8
 3,3
 8,7
 6,9
1 096,6
 7,0
 24,3
 5,0
 0,0
 8,1
 14,0
 4,6
 2,4
 4,5
 15,4
 5,8
 0,0
 0,0
 5,3
 1,4
 2,9
 0,0
 0,0
 16,3
 0,5
 4,0
5 669,9
3.758,9
1.911,0

 448,0
 63,0
1 808,1
 185,6
 157,1
 216,9
 68,5
 58,0
 69,8
 43,4
 45,7
 199,6
 80,3
 15,1
 245,2
 3,8
 28,7
 0,0
 76,0
 39,4
 40,0
 28,3
 14,8
 13,3
 4,4
 18,8
 15,0
 6,8
 17,1
 12,7
 20,8
 0,0
 9,3
 11,4
1 265,2
 7,2
 24,3
 4,8
 0,0
 8,5
 15,7
 4,6
 0,0
 4,5
 16,8
 5,8
 0,0
 0,0
 4,4
 1,9
 2,9
 0,0
 0,0
 16,3
 1,3
 0,0
5 449,3
3.319,5
2.129,7

 382,9
1 558,8
 238,3
 185,8
 147,8
 149,3
 70,4
 50,0
 67,4
 29,4
 43,7
 146,7
 79,1
 14,7
 218,5
 3,8
 26,4
 0,0
 32,4
 38,3
 34,2
 24,3
 10,1
 13,5
 2,1
 18,2
 13,6
 4,9
 14,1
 11,2
 20,8
 0,0
 4,2
 11,3
 26,9
 7,3
 24,3
 4,6
 0,0
 8,5
 13,1
 4,6
 0,0
 4,3
 16,9
 5,8
 0,0
 0,0
 4,4
 1,4
 3,0
 0,0
 0,0
 12,2
 1,5
 0,0
3 804,9
1.985,7
1.819,1

3 710,2
 2,1
3 211,3
1 048,7
 926,1
1 225,6
 318,2
 120,7
 251,7
 112,9
 86,3
 625,7
 327,4
 101,4
 88,6
 11,3
 171,3
 0,0
 196,1
 265,7
 94,0
 59,9
 25,8
 67,8
 0,0
 129,2
 25,3
 10,2
 20,7
 146,3
 42,1
 0,0
 39,8
 68,4
 812,7
 135,5
 32,9
 13,3
 0,0
 40,1
 54,5
 11,6
 0,0
 6,5
 80,8
 13,0
 0,0
 0,0
 2,2
 10,9
 67,6
 0,0
 0,0
 8,1
 11,0
 0,0
14 831,4
4.591,7
10.239,7

6 345,3
6 385,5
6 728,9
2 333,7
1 952,2
2 365,9
 827,4
 603,6
 749,8
 515,4
 485,1
1 507,1
 823,9
 330,5
 884,3
 59,1
 427,8
 35,8
 491,8
 533,3
 326,0
 259,6
 123,1
 171,1
 57,6
 238,2
 120,1
 72,5
 137,8
 233,5
 166,1
 30,7
 91,4
 123,8
3 497,1
 181,7
 142,6
 46,3
 19,2
 88,4
 124,3
 41,8
 26,7
 35,3
 162,8
 49,2
 14,6
 6,9
 30,0
 21,7
 85,8
 2,0
 2,1
 81,7
 15,5
 28,9
41 242,8
18.831,1
22.411,7

   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 31.12.2009 to 30.06.2010

Instrument

Decision

Date of
decision

Loan Guarantee Maturity
term
(years)

Date

Rate

Loan
situation

Amount
decided

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

Outstanding
Outstanding
amount
amount
at 31.12.2009
at 30.06.2010
in EUR million in EUR million

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
3rd tranche

Romania

2009/459/EC

1st tranche
2nd tranche

EURATOM

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

20/01/2009
25/02/2009
27/07/2009
17/02/2010

6/05/2009
27/07/2009
17/02/2010

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

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
9,2

5,5
9,2

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
10/05/2019

27/01/2015
10/05/2019

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

(b)

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

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

(b)
(c)
(c)

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

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

(c)
(c)
(c)

50.000,00

9.200,00

10.700,00

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

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

5.500,00
2.000,00
2.000,00
1.500,00

2.700,00
1.000,00
1.200,00
500,00

2.500,00
1.500,00
1.000,00

426,75

421,75

40,00
11,25
25,00
21,25
33,25
30,00
25,00
17,50

100,00
90,00
33,50

40,00
9,25
25,00
20,00
31,50
30,00
25,00
17,50

100,00
90,00
33,50

54.000,00

9.626,75

11.121,75

EN 

8 

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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 31.12.2009 to 30.06.2010, 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 31.12.2009

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

25.00

3.00

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

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

Amount
outstanding
at 30.06.2010

0.00
15.00

0.00
50.00

10.00
10.00

10.00
10.00

15.00
9.00

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 31.12.2009 to 30.06.2010, 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 31.12.2009

Operations in 
six-month period

Amounts
disbursed

Amounts
repaid

Amount
outstanding
at 30.06.2010*

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

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

15
15

15
15

15
15
15
15

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

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

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

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

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

35.50

28.00
225.00

10.00
30.00
15.00
9.00
25.00

53.91
33.15
13.66
7.10

35.50

28.00
225.00

10.00
30.00
15.00
9.00
25.00

54.72
31.20
15.10
8.42

1.95
0.86

TOTAL
* including exchange rate valuation of EUR +3.62 million for the 2 Euratom tranches with Ukraine

638.41

0.00

30.81

611.22

EN 

10 

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 31.12.09

at 30.06.10

at 31.12.09

at 30.06.10

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

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

18 784

 85

18 709

 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

11 928

50 209

13 124

51 330

(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).

 494

 357

 851

 90

 2

 455

 114

 5

 7

 5

2 421

 107

 71

 515

 469

 338

 806

 92

 0

 418

 121

 5

 7

 4

2 328

 101

 69

 504

11 390

11 853

 74

 76

3 041

19 223

 78

 80

4 366

20 832

EN 

11 

EN 

 
  
 
1.3. 

Evolution of risk 

1.3.1. 

Situation of loans to Member States 

The  total  risk  towards  Member  States  has  increased  during  the  first  semester  2010.  Two 
additional tranches were disbursed for a total amount of EUR 1.500 billion (EUR 500 million 
for Latvia and EUR 1 billion for Romania). Both tranches will be reimbursed in 2019.  

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 based on the amounts (capital and 
interest) due under operations (MFA, BoP, Euratom and EIB) disbursed at 30.06.20103 
to 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 

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 30 June 2010, a total of EUR 3 517 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
30.06.2010***

EUR million

to be disbursed

6 520
10 235
2 480
 825

20 060

6 260
7 338
2 124
 824
2 763

19 309

1 126
1 605
 71
 108
 608

3 517

* 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 8 930 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
30.06.2010

EUR million

to be disbursed

8 700
12 400
3 800
 900

25 800

5 793
4 608
2 241
 483

13 124

4 154
3 234
1 114
 428

8 930

Graph A2: Total Annual Risk borne by the Budget based on the amounts (capital and 
interest) due under all operations (MFA, Euratom and EIB) disbursed at 30.06.2010 to 
third countries (EUR million). 

EN 

13 

   EN 

 
 
 
 
 
 
 
2500

2000

1500

1000

500

0

Euratom

MFA

EIB

2010

2011

2012

2013

2014

2015

2016

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. The simulation is therefore subject 
to a non-negligible degree of uncertainty. 

Graph A3: Estimated outstanding amount covered by the Fund from 2010 to 2016 (EUR 
million). 

EN 

14 

   EN 

 
 
44 500

42 000

39 500

37 000

34 500

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 
with Article 12 of Council Regulation 1150/20004, 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. 

4 

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). 

EN 

15 

   EN 

 
 
                                                 
In a second step, the treasury situation would 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 
Union guarantees for Union and Euratom borrowing operations and for EIB 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  State5  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 
Union guarantee for Union borrowings for balance-of-payments 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. 

Since  the  entry  into  force  of  the  Regulation  establishing  the  Guarantee  Fund  for  external 
actions6, 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. 

5 

6 

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. 
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 

 
                                                 
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. 

EN 

17 

   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  highest  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 

18 

   EN 

 
 
 
2.1. 

Candidate countries 

2.1.1.  Turkey 

The Turkish economy has recovered strongly, and is forecasted to grow by 7.5% in 2010 after 
a dramatic contraction by 4.7% in 2009. A double-digit growth of imports combined with a 
domestic  credit  boom  fuelled  private  consumption  and,  in  particular,  investment.  Headline 
inflation eased after spiking 10% in early 2010 and is expected to reach 8.5% by the end of 
the year. Given these favourable inflation dynamics and an expected moderation in growth in 
the second half of 2010, the central bank is expected not to alter its relatively loose monetary 
policy stance. On the back of the strong GDP growth, the fiscal deficit has narrowed to about 
4% of GDP in 2010, and the public debt stock has come down by almost 3 % in the previous 
year and amounts to 42.5% of  GDP at the end of 2010. The trade and current deficits have 
increased  substantially  in  2010  as  imports  increased  by  more  than  15%  in  volume  and  the 
terms of trade worsened on higher oil and commodity prices. In the first nine months of 2010, 
gross FDI inflows fell by one third to 0.8% of GDP. Turkey's external debt declined by 0.8% 
in  2010  and  currently  amounts  to  about  31%  of  GDP.  Private  external  debt  represents  two 
thirds of the total debt and is also broadly stable. International reserves fell to EUR 80 billion, 
and  still  cover  about  5  months  of  imports.  In  large  part  as  a  result  of  the  improved  risk-
appetite  for  emerging  countries,  the  domestic  currency  appreciated  significantly  against  the 
USD and the EUR since mid-2010.  

Country-risk indicators: Turkey

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

2008

2009

2010

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

0,7
11,0
10,1
-2,2

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)

(m EUR)
(% of GDP)
(m EUR)

(TL p er  EUR)

       Ext ernal debt

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

Indicat ors 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

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

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

119.607
-5,6
10723
79235
5,0
1,90

208.203
28,1
29,0
no
no

4848
34,5
3,2
5,6

-4,7
14,0
6,5
-6,7

102.519
-2,3
4374
78167
5,0
2,20

203.000
32,9
35,6
no
no

5705
35,1
4,0
8,0

7,5
12,0
8,5
-4,0

110.000
5,7
3700
80000
5,0
2,00

198.700
31,0
32,6
no
no

6345
34,9
3,2
5,8

SBA
(until 05/08)
yes

none

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)

Ba3
BB-

Ba3
BB-

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

69    76
(185)   (186)

68     67
(186)   (186) 

Ba2
BB
09/09 03/10
67     59
(186)   (186)

(2)

(1) (2)   See explanatory notes .

EN 

19 

   EN 

 
 
2.2. 

Potential candidate countries  

2.2.1. 

Serbia 

Serbia's GDP increased by 1.2% in the first half of year and its growth should reach 1.5% for 
the  whole  year  2010  (according  to  the  IMF-supported  programme).  The  main  impetus  to 
growth came from vigorous export activity fuelled by the gradual economic revival in Serbia's 
main  trading  partners  and  by  the  depreciating  dinar.  Domestic  demand  remained  largely 
subdued,  which  kept  inflation  on  a  downward  trend  in  the  first  half  of  the  year.  However, 
inflationary  tensions  were  since  rekindled  by  rising  food  prices  and  the  dinar  depreciation. 
Thus, the end-year inflation is expected to exceed the upper bound of the 4-8% target range 
set by the National Bank of Serbia (NBS). Foreign exchange reserves with the NBS remained 
largely  stable  at  over  EUR  10  billion,  which  is  sufficient  to  cover  10  months  of  imports. 
However, surplus on the current transfers account was considerably lower and deficit on the 
income  account  substantially  higher  than  a  year  ago.  Also,  financial  and  capital  flows 
remained modest, with FDI and other investment markedly lower in comparison with a year 
earlier.  While  foreign  currency  inflows  have  been  largely  insufficient  to  cover  the  current 
account  deficit,  Serbia’s  foreign  debt  continued  to  increase.  At  the  end  of  July  2010,  gross 
external  debt  had  risen  by  around  EUR  0.5  billion  since  the  beginning  of  the  year  close  to 
80% of projected GDP.  

Despite  significant  cuts  in  capital  expenditure  and  the  constraints  imposed  on  current 
expenditure  throughout  2010  (including  the  nominal  freeze  in  civil  servants'  salaries  and 
pensions), the budgetary gap is to widen to 4.8% of GDP by the end of the year. Public debt 
soared  in  2010  to  some  38%  of  GDP  at  end-October,  mostly  on  the  back  of  foreign  debt 
reaching almost 70% of the total. 

EN 

20 

   EN 

 
Country-risk indicators: Serbia

Out put  and prices

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

General governm ent  balance

Balance of  paym ent s

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

(% of GDP)

Exports of goods and services f.o.b.
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)

(m EUR)
(% of GDP)
(m EUR)

(TD p er  USD)

Ext ernal debt

External debt ( end of period)
External debt/GDP (end of period)
Debt service/exports of goods 
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 arrangements

Type
(Date)
On track

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

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

2008

2009

2010

5,5
14,7
8,6

-2,5

10157
-17,1
1824
9110
7,7
88,60

21725
63,6
42,8
2.161 
no

1193,8
8,5
5,6
16,1

-
-
-

-3,0
17,4
6,6

-4,2

8478
-5,7
1372
12027
9,6
95,90

22713
72,3
57,7
NA
no

1317,9
8,1
5,8
15,5

,

2.1 (Q3)
19.5 (Q1)
4.1 (Q2)

-2.7 (Oct)

5300 (Q3)
-6.2 (Q3)
595 (Q3)
9217 (Q2)
7,9
106.34 (Q3)

23200 (Q3)
78,8
67,1
NA
no

1507
8,3
6,5 (Q3)
28,4 (Q3)

,

,
)

,
)

EUR 2,97 bn 
(
2009
yes

EUR 2,97 bn 
(
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)

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

none
none
BB- (stable)
BB- (stable)
03/09   09/09 09/09   03/10

122   109
(186)   (186) 

    109    76

(186)   (186)

(2)

(1) (2)   See explanatory notes

EN 

21 

   EN 

 
          
 
2.3.  Mediterranean partners 

2.3.1.  Egypt 

The Egyptian economy performed well during the global crisis. GDP growth slowed down, to 
4.7% in 2009 but accelerated again to 5.2% in 2010. Inflation fell to 12.0% in 2010 (18.3% in 
2008). However, this still high level of inflation and upward inflationary pressures in view of 
the  rising  global  commodity  prices  and  Egypt's  high  dependence  on  basic  food  imports 
(wheat,  corn)  entail  a  risk.  As  a  reaction  to  the  increasing  inflation,  monetary  policy  is 
expected  to  be  tightened  in  the  coming  months.  Despite  the  crisis  the  deterioration  in  the 
fiscal  deficit  was  limited.  The  deficit  was  8.2%  of  GDP  in  fiscal  year  2009-2010,  and  the 
government plans to reduce it to 7% of GDP in 2010-2011. The general government debt was 
on a steeply declining path when the crisis started but this trend was interrupted by the crisis. 
Gross  government  debt  currently  stands  at  73%  of  GDP.  The  current  account  balance 
deteriorated  to  -2.0%  of  GDP  in  2010  (-1.4%  in  2008).  Revenues  from  tourism,  private 
transfers,  remittances  and  the  Suez  Canal  no  longer  compensated  the  trade  deficit.  On  the 
positive  side,  the  external  debt  position  improved;  external  debt  as  a  percentage  of  GDP 
decreased  from  almost  20%  in  2008  to  14%  in  2010.  During  the  global  crisis  the  exchange 
rate vis-à-vis the US dollar was managed and kept roughly stable. Lower capital inflows and 
foreign  exchange  interventions  arrested  the  rapid  increase  in  foreign  exchange  reserves. 
Upcoming  elections  in  2010  (Parliamentary)  and  2011  (Presidential)  are  likely  to  affect  the 
pace of implementation of reforms, in particular for fiscal tightening measures. 

Country-risk indicators: Egypt

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

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

(% of GDP)

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)

(m USD)
(% of GDP)
(m USD)

( p er  USD)

Ext ernal debt

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

Indicat ors 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

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

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

2008

2009

2010

7,2
8,4
18,3

-7,5

56.567
1,4
12.124
23,0
6,7
5,3

32.616
19,8
5,5
no
no

2141
15,2
8,8
5,3

no
-
-

4,7
9,4
12,5

-6,9

48.970
0,5
6.772
24,8
5,8
5,6

29.656
15,8
10,6
no
no

2241
13,8
5,2
6,6

no
-
-

5,2
8,9
12,0

-8,2

47.436
-2,0
5.781
26,0
5,8
5,7

30.812
14,2
5,2
no
no

2333,7
12,8
6,2
6,0

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+
03/08   09/08
68   68
(185)   (186)

Ba1
BB+
03/09   09/09
70   70
(186)   (186) 

Ba1
BB+
09/09    03 /10
70     69
(186)   (186) 

(2)

(1) (2)   See explanatory notes

EN 

22 

   EN 

 
 
2.3.2.  Lebanon 

The Lebanese economy had a good performance in 2009. Real GDP growth reached 6.9% and 
is  expected  to  remain  at  the  same  level  in  2010.  The  financial  sector  proved  remarkably 
resilient  to  the  uncertain  environment,  with  a  government  of  national  unity  only  formed 
towards  the  end  of  2009.  Consumer  price  inflation  came  down  significantly  from  2008  to 
2009, from 10.8% to 1.2%, but is expected to rise to 3.7% in 2010. The government deficit 
remained high, at around 8% in 2009 and is expected to remain near this level in 2010. Total 
public  expenditure  increased  by  around  15%,  of  which  a  large  part  is  going  to  service  the 
public  debt.  International  support  helped  alleviate  the  pressure  on  public  finances.  This 
included  the  first  tranche  of  grants  and  loans  (EUR  15  and  EUR  25  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).  

Net public debt to GDP remained at around 150%  of GDP, while the  external debt-to-GDP 
ratio  (including  non-resident  deposits)  stayed  at  around  160%  of  GDP.  Trade  volumes 
decelerated  from  the  beginning  of  2009  onwards,  mirroring  the  slowdown  in  major  trading 
partners, notably Arab countries and the EU, which account for around 50 and 17 percent of 
Lebanese  exports,  respectively.  Persistent  high  interest  rate  spreads  to  international 
benchmarks  kept  financing  costs  up.  The  current  account  deficit  remains  high  but  broadly 
stabilised  in  2009,  at  around  11%  of  GDP  and  is  expected  to  improve  slightly  in  2010. 
Lowering the government debt-to-GDP ratio remains the top medium-term priority to reduce 
Lebanon's  macro-financial  vulnerabilities.  The high debt levels could produce unsustainable 
debt dynamics should the economy suffer a negative shock, while the high interest burden (45 
percent  of  revenues)  crowds  out  productive  public  spending,  limiting  the  economy's  growth 
potential. About half of the debt is denominated in foreign currency. 

EN 

23 

   EN 

 
General governm ent  balance

(% of GDP)

-9,6

Country-risk indicators: Lebanon

Out put  and prices

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

Balance of  paym ent s

Exports of goods
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 (end of period, includes non-resident deposits)
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

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

2008

2009

2010

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

9,3
n.a.
10,8

(m USD)
(% of GDP)
(m USD)

( p er  USD)

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

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

5.251
-11,4
2,6
19,3
7,9
1.507,5

30.611
172,0
106,3
no
no

508
3,6
0,7
13,4

6,9
n.a.
1,2

-8,1

4.716
-11,3
3,7
28,6
10,3
1.507,5

31.892
171,0
121,4
no
no

539
3,3
0,6
16,0

7,2
n.a.
3,7

-8,7

5.069
-10,5
3,9
32,2
10,3
1.507,5

34.440
160,00
160,0
no
no

603
3,3
1,4
14,6

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

B3
B-
03/08   09/08
127   134
(185)   (186)

B3
B-
03/09  09/09
102   80
(186)   (186)

B2
B-
09/09   03/10
80   82
(186)   (186)

(2)

EN 

24 

   EN 

 
 
2.3.3.  Tunisia 

Despite  the  global  financial  and  economic  crisis,  the  performance  of  the  Tunisian  economy 
remained  overall  robust  in  2009.  Real  GDP  growth  slowed  down  to  3%  in  2009  (4.6%  in 
2008),  but  is  expected  to  accelerate  again  in  the  near  future.  On  the  back  of  the  weaker 
economic  activity,  consumer  price  inflation  fell  from  5  %  in  2008  to  3.5%  in  2009.  The 
country  risks  moving  back  to  a  situation  of  relatively  high  inflation,  like  it  did  in  the  years 
before the global crisis. Due to the lack of basic agriculture and the significant weight of food 
items  in  the  average  consumption  basket,  Tunisia  is  very  exposed  to  the  global  commodity 
market developments. The fiscal deficit increased significantly during the crisis, from 0.8% in 
2008 to 5% of GDP in 2010, underlining a need for serious fiscal consolidation. However, in 
comparison with many of its neighbours, the public debt stock is not excessively high (below 
50%  of  GDP).  Tunisia's  trade  deficit  is  high,  at  3-4%  of  GDP,  as  it  has  no  strong  export 
position  in  the  world  economy.  This  deficit  is  only  just  compensated  by  the  inflow  of 
remittances  and  FDI.  Remaining  committed  in  the  overall  monetary  policy  framework  to 
inflation targeting over the medium term, the Tunisian dinar has been pegged to a basket of 
currencies in which the euro holds the largest share. This helped stabilise the exchange rate 
during the global financial crisis. Gross reserves are expected to cover hardly six months of 
imports by the end of 2010.  

Country-risk : Tunisia

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

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

(% of GDP)

Exports of goods
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)

(m USD)
(% of GDP)
(m USD)

( p er  USD)

Ext ernal debt

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

Indicat ors 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

Ext ernal debt

Type
(Date)
On track

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

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

2008

2009

2010

4,6
14,2
5,0

19.184
-4,2
2.300

6,1
4,1
1,31

20.776
50,7
11,0
no
no

1683

12,0
11,3
12,2

no
-
-

3,0
13,3
3,5

14.419
-3,1
1.300
8,1
5,6
1,35

19.596

49,5
22,4
no
no

1900

11,7
13,8
18,1

no
-
-

3,4
14,0
4,5

16.106
-3,5
1.296
8,1
5,9
1,42

18.764
47,8
17,2
no
no

1952

10,8
8,5
14,9

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)

Baa2
BBB 
03/08  09/08
62    64
(185)) (186)

Baa2
BBB 
03/09   09/09
  53       52
  (186)  (186)

Baa2
BBB 
09/09  03/10
52      71
  (186)  (186)

(1) (2)   See explanatory notes

EN 

25 

   EN 

 
 
2.3.4.  Morocco 

The  direct  impact  of  the  global  crisis  on  Morocco  has  been  limited.  With  little  financial 
exposure  to  international  markets,  strong  public  finances,  resilient  domestic  demand  and  an 
exceptional  crop  year,  GDP  growth  moderated  only  to  4.9%  in  2009,  compared  to  5.6%  in 
2008. The economic growth is expected to fall further to 4.2% in 2010. In line with the slight 
slow down of GDP growth, consumer price inflation slowed down from 3.7 % in 2008 to 1.% 
in  2009.  However,  the  rebound  of  global  demand  in  2010  put  upward  pressure  on  global 
commodity prices, which were transmitted into higher imported inflation in Morocco in 2010 
(at  2.5%).  This  inflation  increase  originates  mainly  from  higher  energy  prices.  The  public 
balance recorded a deficit of 2.1% of GDP in 2009 up to 3.9% in 2010, after two surplus years 
(0.2%  in  2007)  and  (0.4%  in  2008).  Public  finance  reforms  in  the  years  before  the  global 
crisis helped to create fiscal room and kept the public debt to GDP ratio below 60% during 
2008-10.  The  continuation  of  reforms  will  help  to  keep  the  public  debt  also  in  the  medium 
term at a sustainable level. The external position of Morocco improved during the crisis years. 
The current  account  deficit  narrowed  from 6.4%  of GDP in 2008  to  3.8% of GDP in 2010. 
The foreign exchange reserves increased from EUR 16 billion to EUR 18 billion in this same 
period. Foreign debt is mainly long-term so that no direct risk is associated with the external 
debt position. Main vulnerability in the Moroccan economy is its weak pension system, and 
an  increasingly  aging  population  (ratio  of  retirees  to  the  active  population  is  expected  to 
double or treble by 2060).  

EN 

26 

   EN 

 
Country-risk : Morocco

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

Indicat ors 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

2008

2009

2010

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

(% of GDP)

(m USD)
(% of GDP)
(m USD)

( p er  USD)

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

(m EUR)

(%)    (1)
(%)
(%)

5,6
9,6
3,7

0,4

10.690
-6,4
2,0
19,2
7,5

16.174
27,2
25,5
no
no

1929

13,7
8,6
25,1

no
-
-

4,9
9,1
1,0

-2,1

11.926
-3,3
0,7
21,8
6,9

17.815
27,1
28,5
no
no

2224

13,7
8,7
26,9

no
-
-

4,2
9,8
2,5

-3,9

15.146
-3,8
2,4
21,4
6,7

20.544
27,3
26,5
no
no

2366

13,0
9,4
19,2

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+
03/08   09/08
66      63
(185)   (186)

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

Ba1
BBB-
09/09   03/10
54    57
(186)    (186) 

(2)

(1) (2)   See explanatory notes

2.3.5. 

Syria 

During  the  global  crisis,  GDP  growth  in  Syria  remained  at  5%.  The  external  shocks  in  the 
economy hardly affected the economy due to low degree of financial and trade integration of 
the  country.  The  lower  global  commodity  prices  improved  the  terms  of  trade  conditions  of 
Syria  and  consumer  price  inflation  decreased  by  8  percentage  points  in  the  period  2008  to 
2010 (from 15.7% to 7.9%). Economic activity was supported by fiscal stimulus packages. As 
a consequence, the fiscal deficit increased from 2.5% of GDP in 2008 to 9.0% in 2009. High 
oil export revenues in the past helped keep the external debt position at around 13% of GDP. 
However, the public domestic debt position increased during the crisis years to above 30% of 
GDP. 

In view of the low diversification of economic activity and the almost exhausted oil reserves, 
the country risks a gloomier public finance and balance of payment position in the medium-to 
long-term.  The  further  phasing  out  of  government  subsidies  on  energy  and  privatisations  of 
state  companies  can  help  the  fiscal  consolidation.  The  exchange  rate  regime  is  still  loosely 
pegged  to  the  IMF's  special  drawing  rights.  A  further  opening  of  the  economy  is 
commendable.  The  inflow  of  FDI  is  still  low at not even USD 2 billion (equalling 2-3% of 
GDP). 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.  

EN 

27 

   EN 

 
 
Country-risk indicators: Syria

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

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

(% of GDP)

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)

(m USD)
(% of GDP)
(m USD)

( p er  USD)

Ext ernal debt

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

Indicat ors 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

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

(m EUR)

(%)    (1)
(%)
(%)

2008

2009

2010

4,3
10,9
15,7

-2,5

19.278
-1,4
1.627
11,6
9,4
46,0

7.112
14,5
1,0
no
no

536,1

3,8
13,1
4,4

no
-
-

5,0
8,5
3,8

-9,0

16.678
-2,8
1.514
12,7
10,7
45,5

7.467
13,9
1,2
no
no

4,0
8,3
7,9

-6,2

18.451
-2,4
1.850
12,9
9,4
46,3

7.916
13,6
1,1
no
no

762,8

823,9

4,7
7,1
6,6

no
-
-

4,5
8,5
5,5

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
03/08   09/08
116   115
(185)  (186)

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

none
none
09/09   03/10
149    140
(186)  (186)

(2)

(1) (2)   See explanatory notes

2.4. 

Other countries 

2.4.1. 

South Africa 

Following  a  contraction  in  GDP  by  1.8%  in  2009,  South  Africa's  economy  has  been 
recovering  strongly  since  the  fourth  quarter  of  2009,  with  GDP  growth  in  the  current  year 
likely  to  exceed  3%.  The  recovery  has  been  led  by  export-oriented,  primarily  commodities, 
and has been supported by strongly countercyclical fiscal policies in 2009/10. The fiscal year 
2010/11 budget, however, projects a clear improvement in structural balances in the near and 
medium-term.  

The South African financial sector weathered the global financial crisis quite well. The Rand, 
which  had  depreciated  strongly,  has  continued  along  the  appreciating  trend  that  started  in 
early  2009.  This  has  brought  it  back  to  the  level  observed  at  the  beginning  of  2008.  The 
current  account  deficit,  which  had  reached  more  than  7%  of  GDP  in  2007  and  2008,  has 
declined  strongly  to  4%  in  2009  and  is  likely  to  remain  below  5%  also  in  2010;  foreign 
exchange  reserves  are  up  from  USD  34.1  billion  in  2008  to  USD  44  billion  as  of  October 
2010. External debt is rising from a low level and is expected to be financed by continuing 
capital inflows. 

EN 

28 

   EN 

 
 
Country-risk indicators: South Africa

2008

2009

2010

Output and prices

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

General governm ent  balance

Balance of  paym ent s

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

(% of GDP)

3,1
13,5
11,5

-0,33

Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
 Months of imports of goods and services
Exchange rate (end of period, + is depreciation of LE)

(bn USD)
(en % du PIB)
(m  €)

      bn USD

(r an d s p er  €)

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

Indicat ors 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

IMF arrangem ent s

(m €)
(%)
(%)
(m €)
(m €)

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

-1,7
14,3
7,1

-5,1

79,2
-3,9
9667,5
36,2
5,3
11,7

51515,9
25,0
10,9

99,4
-7,1
8084,7
34,2
3,8
12,1

52824,9
27,9
9,4

636 
4,5 
1,3 
0,9 

no
-
-

743 
4,6 
1,3 
1,4 

no
-
-

-209,0
16,2
5,5

-5,7

92,4
-4,2
11977,9
41,8
5,1
9,8

57810,0
23,9
10,8

828
4,6
1,2
1,1

no
-
-

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)

Baa1
BBB+
03/08   09/08
55      54
(185)  (186)

A3
BBB+
03/09   09/09
50     47
(186)  (186)

A3
BBB+
09/09   03/10
47     47
(186)  (186)

(2)

(1) (2)   See explanatory notes

2.4.2.  Brazil 

The  Brazilian  economy  weathered  the  international  financial  crisis  well;  against  the 
background of a very competitive exchange rate, economic growth contracted much less than 
in  other  countries  (by  0.2%  in  2009).  On  the  back  of  sound  fundamentals  and  strong 
commodity demand by emerging economies, growth in 2010 is likely to reach 7.4%, due to 
strong domestic demand and recovery in exports. However, with domestic demand driving up 
imports even more, the current account deficit is likely to rise to 2.5% of GDP in 2010 (1.5% 
in 2009). 

Given  the  loose  monetary  policy  environment,  with  low  interest  rates  in  the  advanced 
economies,  Brazil  now  faces  the  challenge  of  managing  huge  capital  inflows,  which  are 
attracted by higher yields in Brazil and better growth prospects. This is putting pressure on the 
Brazilian currency to appreciate even more against the US dollar. As a consequence, Brazil 
has increased the Tax on Financial Transactions (IOF) which applies to foreign investments in 
Brazilian  financial  and  capital  markets:  on  20  October  2009  the  rate  was  raised  to  2%  and 
then, to 6% on 18 October 2010. However, inflation is now running above the official target 
of  4.5%  for  2010.  Like  other  emerging  economies,  Brazil  now  faces  the  considerable 
challenge of fighting inflation, while not inducing additional capital inflows. In the absence of 

EN 

29 

   EN 

 
             
               
              
                
              
                
              
                
 
another  abrupt  change  in  risk  aversion  in  global  capital  markets,  Brazil  is  unlikely  to  face 
problems with rolling over its – relatively low - external debt (around 13 ½% of GDP).  

Country-risk indicators: Brazil

2008

2009

2010

Output and prices

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

General governm ent  balance

Balance of payments

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

(% of GDP)

5.1
7.9
5.6

-1.9

Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
Months of imports of goods and services
Exchange rate (end of period, + is depreciation of LE)

(bn USD)
(en % du PIB)
(m  €)

       bn USD

(r eais p er  €)

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

Indicat ors 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

(m €)
(%)
(%)
(m €)
(m  €)

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

49.5
-1.7
30064
194
22
2.7

557384
13.8
19

no

no

621
4.4
0.3
0.4

No

7.5
7.2
5

1.7

44.6
-1.5
33136
276
29
2.8

521597
12.1
28

no

no

884
4.9
0.1
2.4

-0.2
8.1
4.9

-3.5

38.8
-1.5
19906
229
34
2.8

571447
13.2
28

no

no

691
4.3
0.3
0.9

22/01/2010
2 years

Indicators of markets' perception of creditworthiness

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
BBB-

03/08   09/08   

63    60
(185)    (186)

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

Baa3
BBB-
09/09   03/10
  48    51
(186)   (186)

(2)

Footnotes
(1) (2)   See explanatory notes

EN 

30 

   EN 

 
 
2.4.3.  Mexico 

Given  its  high  dependence  on  developments  in  the  US,  Mexico  was  particularly  strongly 
impacted by the recession in the US since 2007 and the collapse in global trade observed in at 
the end of 2008. Furthermore, as Mexico relies on remittances from abroad, which dropped 
drastically, private consumption also declined further. Growth started to recover in the second 
quarter of 2009, but GDP growth for 2009 was sharply negative (-6.5%).  

Developments  in  2010  have  been  positive,  with  a  weak  first  quarter  followed  by  a  strong 
expansion in the second and third quarter, growth starting to be driven by domestic demand, 
both private consumption and investment. GDP growth for the year, as a whole, is expected to 
reach  between  4.5%  and  5%.  Despite  the  strong  depreciation  of  the  Mexican  peso,  from  an 
average exchange rate of 11.1 pesos to the USD to 13.5 pesos, consumer price inflation has 
moderately increased from a rate of 5.1% in 2008 to 5.3% in 2009. In 2010, inflation is likely 
to  have  declined  below  5%  on  the  whole  year.  Foreign  exchange  reserves  increased  from 
USD 36 billion in 2009 to USD 42 billion in 2010. The current account deficit should remain 
below 1% of GDP and external debt, which amounts to 20.7% of GDP, is expected to decline 
in the current year, confirming the relatively sound external position. In April, the IMF and 
Mexico  renewed  the  USD  48  billion  Flexible  Credit  Line  Agreement  (FCLA),  although  the 
first FCLA agreed upon in April 2009 had never to be activated. 

Country-risk indicators: Mexico

2008

2009

2010

Output and prices

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

General governm ent  balance

Balance of  paym ent s

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

(% of GDP)

1,3
3,9
5

-0,1

Exports of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period)
Months of imports of goods and services
Exchange rate (end of period, + is depreciation of LE)

(bn USD)
(en % du PIB)
(m  €)

      bn USD

(p eso s p er  €)

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 arrangements

Type
(Date)
On track

(m €)
(%)
(%)
(m €)
(m €)

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

309,6
-1,5
17021
82,14
2,9
16,3

39319
5,6
2,2

77,4
0,55
0,05
0,04

-6,5
5,4
5,2

-4,8

244,6
-0,6
10399
78,76
3,6
18,7

63389
10,8
4,3

74,6
0,52
0,05
0,05

4,9
5,0
4,2

-3,6

297,6
-1,1
17500
98,75
3,6
18,7

74430
9,6
3,9

59,1
0,33
0,06
0,02

FCLC
17 April 2009

FCLC
17 April 2010

expired (not used expired (not used)

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)

Baa1
BBB+
03/08   09/08
51     51
(185)   (186)

Baa1
BBB
03/09  09/09
48    50
(186)   (186)

Baa1
BBB
09/09   03/10
50      50
(186)   (186)

(2)

Footnotes
(1) (2)   See explanatory notes

EN 

31 

   EN