COMMISSION STAFF WORKING PAPER
Date: 2011-08-31
Institutions: European Commission
Subjects: Community loan, EU Member State, budgetary reserve (EU), economic analysis, economic stabilisation, financial aid, general budget (EU), investment protection, third country

EUROPEAN COMMISSION 

Brussels, 31.8.2011 
SEC(2011) 1011 final 

COMMISSION STAFF WORKING PAPER 

Accompanying the document 

REPORT FROM THE COMMISSION 

TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 
on guarantees covered by the general budget  
situation at 31 December 2010  

{COM(2011) 528 final} 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

Introduction ..................................................................................................................2 

Situation of risks covered by the Budget......................................................................2 

Overview of capital loan operations covered by the EU guarantee .............................2 

Risk factors ...................................................................................................................4 

Cumulative and annual Budget guarantee exposures ...................................................4 

Loan operations covered by the Budget guarantee.......................................................6 

Evolution of risk ...........................................................................................................9 

2.5.1.  Situation of loans to Member States.............................................................................9 

2.5.2.  Situation of loans to third countries............................................................................10 

2.6. 

Payment under the Budget guarantees........................................................................12 

2.6.1.  Borrowing/lending operations ....................................................................................12 

2.6.2.  Guarantees given to third parties ................................................................................13 

2.6.3.  Default interest penalties for late payment .................................................................14 

3. 

Country-risk evaluation ..............................................................................................15 

3.1. 

Candidate countries ....................................................................................................15 

3.1.1.  Turkey.........................................................................................................................15 

3.2. 

Potential candidate countries ......................................................................................17 

3.2.1.  Serbia ..........................................................................................................................17 

3.3. 

Mediterranean partners ...............................................................................................18 

3.3.1.  Egypt...........................................................................................................................18 

3.3.2.  Lebanon ......................................................................................................................20 

3.3.3.  Tunisia ........................................................................................................................21 

3.3.4.  Morocco......................................................................................................................22 

3.3.5.  Syria............................................................................................................................23 

3.3.6. 

Jordan..........................................................................................................................25 

3.4. 

Other countries ...........................................................................................................26 

3.4.1.  South Africa................................................................................................................26 

3.4.2.  Brazil ..........................................................................................................................27 

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1. 

INTRODUCTION 

This  working  document  is  published  in  parallel  with  the  report  from  the  Commission  to  the 
European Parliament and the Council on guarantees covered by the budget at 31 December 2010. It 
provides  information  on  quantitative  aspects  of  the  risk  borne  by  the  Budget,  relating  to  third 
countries  and  Member  States.  An  overview  of  the  outstanding  amount  of  loans  covered  by  the 
budget under each programme is presented in section 2. The third countries representing important 
risks to the Budget in 2010, 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  in  section  3.  The  evaluation  comprises  short  analyses  and  tables  of 
risk  indicators.  The  evaluated  countries  are  grouped  in  4  sub-sections:  candidate  countries  (3.1), 
potential candidate countries (3.2), Mediterranean partners (0) and other countries (3.4). 

2. 

SITUATION OF RISKS COVERED BY THE BUDGET 

2.1. 

Overview of capital loan operations covered by the EU guarantee 

Table A1 shows 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. 

TABLE A1: CAPITAL OUTSTANDING IN RESPECT OF OPERATIONS DISBURSED at 31.12.2010 (in EUR million)

Authorised
ceiling (a)

Capital
outstanding at
30.06.2010 (b)

Capital
outstanding at
31.12.2010 (b)

Remainder
to be disbursed
at 31.12.2010  (c) 

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

3 363
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

3 240
38
417

5 500
2 900
3 650

15 744

9
38
69
14
25
280
28

463
49

8 173
7 204
2 524
 845

6 500
3 100
5 000

14 600

9
40
90
142
50
280
75

 686

28 755
28 342
8 205
2 400

533

1 000
200
1 350

3 083

25

 25
 9

5 487
6 022
1 277
 454

8 286
7 787
10 870

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. 

20 830
18 013
32 563

67 702
68 388
82 988

21 987
19 259
35 002

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

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• 

(a) 

Explanatory notes to table (A1) 

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. 

(b) 

Capital outstanding (Table A1) 

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

(c) 

Remainder to be disbursed (Table A1) 

Amount of loans signed not yet disbursed at the date of the report. 

• 

• 

EIB operations 

EIB loans operations account for 63% of the total loan operations covered by the budget. 
The following table provides further details in this respect. 

ANNEX TO TABLE A1: SITUATION IN RESPECT OF EIB OPERATIONS at 31.12.2010 (in EUR million)

Operations 

Credit line
authorised (a)

Loans made
available minus
cancellations

Amounts
disbursed

Amounts
outstanding 
at 31.12.2010 (b)

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  

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

16 600
6 807
6 762
5 729
1 033
2 500
 779
1 720
 531

19 230
7 335
6 202
2 125
824
2 744
35 830
6 512
 477
1 617
 809
 375
3 235
6 512
7 062
 713
4 492
1 857
7 062
5 320
 29
 315
 710
 285
3 982
5 320
54 724

(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.

6 129
2 829
1 759
1 583
 176
1 348
 284
1 064
 192

15 796
5 843
5 238
1 757
 711
2 247
21 926
6 067
 450
1 508
 670
 275
3 163
6 067
7 212
 723
4 530
1 959
7 212
5 327
 29
 246
 722
 204
4 127
5 327
40 532

6 003
2 826
1 642
1 581
 61
1 343
 284
1 060
 191

12 215
5 001
4 232
938
576
1 468
18 218
2 284
 267
 531
 135
 76
1 275
2 284
 695
 74
 568
 53
 695
 789
 4
 232
 107
 3
 443
 789
21 987

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2.2. 

Risk factors 

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. 

2.3. 

Cumulative and annual Budget guarantee exposures 

With  the  cash  flow  approach  based  on  the  existing  loans  disbursed  it  is  possible  to  calculate  the 
total capital exposure of the budget and the total capital and interest payments due to be received 
each year. The following table A2 includes the estimated amount of principal and interest due each 
financial  year  by  each  country  according  to  disbursements  made  until  31 December 20102.

1 
2 

Within each portfolio individual EIB loans are, de facto, guaranteed at 100% until the global ceiling is reached. 
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 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 31.12.2010

Ranking

Country

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

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

2 209,6
 395,9
 383,9
 211,4
 171,3
 166,3
 99,5
 98,3
 88,0
 81,9
 76,9
 76,8
 76,0
 73,6
 58,1
 55,0
 47,1
 44,6
 42,4
 33,9
 24,5
 18,8
 16,6
 15,8
 15,6
 14,3
 14,3
 14,1
 13,9
 13,3
 12,7
 9,8
 8,1
 7,6
 6,5
 5,8
 5,7
 5,6
 5,5
 5,1
 5,1
 4,8
 4,8
 4,4
 3,9
 3,8
 3,8
 3,3
 2,7
 2,4
 2,1
 1,9
 1,0
 0,7
 0,4
 0,3
4 769,5
3.013,7
1.755,9

 142,1
 417,1
 335,7
 202,0
 175,0
 175,0
 109,3
 96,7
 134,5
 79,1
 90,0
 78,1
 79,8
 71,0
 51,0
 47,5
 46,3
 66,9
 45,4
 44,2
 21,2
 19,5
 16,0
 13,6
 17,2
 11,4
 14,3
 22,0
 0,0
 13,8
 12,6
 7,6
 7,1
 7,2
 6,4
 14,3
 7,9
 8,1
 5,3
 8,2
 5,0
 5,4
 6,5
 4,3
 7,5
 4,0
 3,8
 3,7
 2,7
 2,6
 1,0
 1,9
 0,5
 0,7
 12,3
 0,3
2 782,7
891,2
1.891,5

 133,2
 425,5
 334,6
 198,6
 178,1
 185,5
 82,5
 96,6
 141,5
 73,2
 77,0
 76,2
 82,5
 68,4
 37,2
 77,1
 39,4
 40,3
 45,5
 40,7
 47,3
 19,3
 17,5
 13,6
 15,2
 9,4
 14,6
 25,0
 0,0
 14,4
 9,6
 5,0
 7,0
 7,4
 6,4
 15,9
 10,6
 8,0
 5,1
 22,1
 5,0
 5,4
 8,9
 4,3
 15,0
 6,4
 3,8
 4,4
 2,7
 2,6
 1,5
 1,0
 0,0
 0,3
 12,1
 0,3
2 780,8
840,0
1.940,8

2 128,4
 475,5
 314,9
 181,4
 179,4
 182,0
 84,8
1 096,5
 155,3
 53,5
 77,4
 75,5
 90,4
 56,4
 25,8
 106,7
 35,3
 39,8
 42,1
 42,5
 38,1
 15,7
 17,9
 13,6
 18,8
 7,4
 14,8
 25,0
 0,8
 15,9
 6,5
 3,2
 6,9
 7,7
 6,4
 18,0
 13,7
 7,9
 5,0
 28,5
 0,0
 5,4
 2,2
 4,3
 15,0
 6,3
 0,0
 4,9
 2,7
 2,6
 1,3
 0,0
 0,0
 0,0
 4,0
 0,5
5 765,0
3.768,5
1.996,5

EN 

1 558,8
 482,9
 243,8
 181,4
 153,6
 173,3
 86,9
 26,7
 156,7
 29,4
 71,2
 78,9
 55,4
 43,7
 14,7
 206,1
 25,7
 37,1
 38,7
 25,5
 31,4
 13,0
 14,8
 9,3
 19,1
 2,1
 11,2
 25,0
 1,7
 13,4
 4,6
 0,0
 16,6
 3,4
 6,7
 19,4
 13,8
 10,5
 4,6
 33,1
 0,0
 5,4
 0,0
 4,3
 11,2
 6,2
 0,0
 4,0
 2,6
 2,7
 1,4
 0,0
 0,0
 0,0
 0,0
 1,5
3 983,6
1.994,9
1.988,7

 2,1
4 693,5
3 248,0
1 022,2
1 295,4
1 158,5
 537,4
 812,5
 725,3
 112,9
 280,3
 330,4
 151,2
 86,3
 101,4
 103,2
 173,2
 272,9
 267,2
 59,9
 86,3
 19,0
 76,5
 23,7
 139,0
 0,0
 147,2
 50,4
 22,9
 25,2
 9,4
 0,0
 143,1
 28,3
 124,5
 95,0
 57,7
 57,4
 13,3
 68,6
 0,0
 12,4
 0,0
 10,6
 7,5
 20,7
 0,0
 2,0
 4,6
 62,1
 11,9
 0,0
 0,0
 0,0
 0,0
 11,0
16 764,0
4.656,8
12.107,2

6 237,2
7 429,0
6 674,6
2 177,9
2 425,0
2 219,8
1 087,1
3 492,4
1 608,8
 473,5
 746,4
 796,0
 598,2
 445,1
 303,3
 826,4
 394,7
 583,4
 521,3
 282,8
 285,5
 120,9
 173,3
 103,2
 244,8
 49,1
 229,4
 186,5
 41,1
 110,6
 61,8
 25,7
 200,1
 69,7
 163,6
 187,8
 125,0
 108,0
 43,5
 199,0
 15,1
 44,5
 22,4
 36,3
 75,0
 53,6
 11,5
 26,3
 20,8
 77,7
 21,0
 4,8
 1,5
 1,7
 28,8
 15,3
42 508,0
18.494,1
24.013,9

 63,0
 538,7
1 813,8
 181,1
 272,1
 179,2
 86,8
1 265,1
 207,6
 43,4
 73,7
 80,0
 63,0
 45,7
 15,1
 230,7
 27,7
 81,9
 40,1
 36,1
 36,7
 15,7
 14,1
 13,6
 19,8
 4,4
 12,9
 25,0
 1,7
 14,6
 6,5
 0,0
 11,4
 8,1
 6,6
 19,4
 15,4
 10,5
 4,8
 33,1
 0,0
 5,4
 0,0
 4,3
 15,0
 6,3
 0,0
 4,0
 2,7
 2,7
 1,8
 0,0
 0,0
 0,0
 0,0
 1,3
5 662,5
3.329,0
2.333,5

5 

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2.4. 

Loan operations covered by the Budget guarantee  

The Budget covers two types of lending operations. These are: 

(a) 

Lending  operations  to  Member  States.  These  are  BoP,  MFA,  Euratom,  (table  A3a)  and 
EIB guaranteed lending operations (table A4). 

TABLE A3a
BoP, Euratom, MFA lending operations to Member States  (EUR million)

Period 30.06.2010 to 31.12.2010

Instrument

Decision

Date of
decision

Loan Guarantee Maturity
term
(years)

Rate

Date

Loan
situation

Amount
decided

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

Outstanding
amount
at 30.06.2010

Operations in 

Amounts
disbursed

Amounts
repaid

Outstanding
amount
at 31.12.2010

BOP

2009/431/EC (1)

8/05/2009

100%

Total

Hungary

1st tranche
2nd tranche
3 rd tranche

2009/102/EC

Latvia

2009/290/EC

1st tranche
2nd tranche
3rd tranche
4th tranche

Romania

2009/459/EC

1st tranche
2nd tranche
3rd 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
16/07/2010

6/05/2009
27/07/2009
17/02/2010
22/09/2010

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
MFA*

BULGARIA IV*

99/731/EC

08.11.99

     1st tranche
     2nd tranche

ROMANIA IV*

99/732/EC

08.11.99

     1st tranche
     2nd tranche
     3rd tranche
* Member States as of 01.01.2007
TOTAL

3
5,6
6,8

5,1
5,5
9,2
15

5,5
9,2
7

20
15
17
15
15
16
16
14

17
19
18

10
-

10
10

 -

100%

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

3/04/2014
27/01/2015
10/05/2019
20/10/2025

27/01/2015
10/05/2019
22/09/2017

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

21.12.2009
-

29.06.2010
17.07.2013

 -

(b)

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

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

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

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

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

(c)
(c)
(c)

(c)
(c)

(c)
(c)
(a)

50.000,00

14.600,00
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

300,00

100,00
40,00
60,00

200,00
100,00
50,00
50,00

10.700,00
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

421,75

1.350,00
0,00

0,00
0,00

200,00

0,00

200,00

1.150,00

0,00

1.150,00
0,00

5,00

12.050,00
5.500,00
2.000,00
2.000,00
1.500,00

2.900,00
1.000,00
1.200,00
500,00
200,00

3.650,00
1.500,00
1.000,00
1.150,00
416,75

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

100,00
90,00
33,50
65,00

15,00
0,00
15,00

50,00
0,00
50,00

0,00

0,00

0,00

0,75
1,25
1,25
1,75

27,50

15,00

15,00

12,50

12,50

193,25
40,00
8,50
23,75
18,75
29,75
30,00
25,00
17,50

223,50
100,00
90,00
33,50
37,50

0,00
0,00
0,00

37,50
0,00
37,50
0,00

54.300,00

11.186,75

1.350,00

32,50

12.504,25

(1) Regulation establishing the facility stipulating that the outstanding amount of loans to be granted to Member States  shall be limited to EUR 50 billion in principal

(b) 

Lending operations to non Member States are covered by the Guarantee Fund for external 
actions. These include MFA, Euratom (Table A3b) and EIB guaranteed lending operations 
to third countries (table A4). 

EN 

6 

   EN 

 
 
 
 
TABLE A3b
 European Union (MFA) and Euratom loans to non-member States (EUR million) 
Changes in amounts outstanding during six-month period 30.06.2010 to 31.12.2010, broken down by countries and tranches

   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)

MFA

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

99/325/EC

10.05.99

02/883/EC

09.11.02

97/471/EC

22.07.97

99/733/EC

08.11.99

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

15
-

15
15

15
15

15
15
15
15

15
15

15
15

15
15
15
15

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

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

EURATOM

UKRAINE (Euratom)

94/179/EC

11

15.03.2018

21.03.94
15.03.2007
06.10.2008
15.10.2009

(c)
(c)

(c)
(c)

(c)
(c)

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

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

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

TOTAL
* including exchange rate valuation

EN 

792.00

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
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

7 

Amount
outstanding
at 30.06.2010

Operations in 
six-month period

Amounts
disbursed

Amounts
repaid

Amount
outstanding
at 31.12.2010

491.50

0.00

29.00

462.50

10.00
10.00

10.00
10.00

15.00
9.00

10.00
12.00
10.00
18.00

35.50

28.00
225.00

10.00
30.00
15.00
9.00
25.00

54.72
31.20
15.10
8.42

2.00

5.00

22.00

1.95
0.85
0.95

0.00
8.00
10.00
0.00
10.00
10.00
0.00
10.00
9.00
0.00
10.00
12.00
10.00
18.00

13.50

28.00
225.00

10.00
30.00
15.00
9.00
25.00

49.01
29.25
13.00
6.77

546.22

0.00

32.75

511.51

EN 

 
  
 
 
 
TABLE A4

LOAN GUARANTEES TO EIB

in EUR million 

Geographical Area

Decision

Date
of decision

Rate
of guarantee

Amount
decided

Loans signed

Amount outstanding

        (minus cancellations)

at 30.06.10

at 31.12.10

at 30.06.10

at 31.12.10

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

5548

1656

7204

 912

 493

2 464

 571

 139

 122

 285

6 139

 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

18 709

 85

18 630

 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

13 124

51 330

16 600

54 724

(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.
(3) The Community has guaranteed EUR 5 497 million, of which EUR 141.5 million were 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
(which has been decided in the context of ongoing mid-term review beginning of 2011).

EN 

8 

EN 

 469

 338

 806

 92

 0

 418

 121

 5

 7

 4

2 328

 101

 69

 504

11 853

 78

 80

4 366

20 832

 402

 293

 695

 76

 0

 372

 103

 4

 5

 3

2 116

 96

 67

 491

11 724

 72

 160

6 003

21 987

 
  
 
2.5. 

Evolution of risk 

The evolution of risk corresponds to the schedule of the total annual repayments (amount in 
capital including interests due) under all financial instruments guaranteed by the Budget. The 
situation  of  loans  to  Member  States  implies  that  the  risk  is directly  covered  by  the  Budget. 
Regarding the situation of loans to third countries the risk is covered by the guarantee Fund 
for external actions. 

2.5.1. 

Situation of loans to Member States 

The total risk towards Member States arising from BoP, Euratom, EIB and MFA lending has 
increased during the second semester 2010.  

Two additional tranches for BoP loans were disbursed for a total amount of EUR 1.35 billion 
(EUR  200  million  for  Latvia  and  EUR  1.15  billion  for  Romania).Further  BoP  loan 
disbursements are planned up to 2012.  

As  regards  reimbursements,  Hungary  will  repay  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. 

EFSM was activated for Irland in early January with a first disbursment of EUR 5 billion and 
EUR  3.5  billion  in  March.  Further  disbursements  are  scheduled  during  the  year  2011  up  to 
2012.  At  the  end  of  April  2011,  Portugal  had  required  lending  under  this  programme.  Both 
countries have not been taken into consideration in the graph A1 below since at 31.12.2010 
the relating loan operations were not disbursed. 

Graph A1: Total Annual Risk to the Budget3 relating to Member States at 31.12.20104 
(EUR million) for the period 2011-2016 

4 000 

3 500 

3 000 

2 500 

2 000 

1 500 

1 000 

500 

-

Euratom

MFA

EIB

BOP

2011

2012

2013

2014

2015

2016

3 
4 

Based on the amounts (capital and interest) due under operations disbursed at 31.12.2010. 
As of 31 December 2010, the 2011 annual risk for Member States was EUR 1,756 million. 

EN 

9 

   EN 

 
 
                                                 
2.5.2. 

Situation of loans to third countries 

At  31  December  2010,  a  total  of  EUR 3 022 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 

Ceiling

Loans made available
(minus cancellations) at
31.12.2010***

EUR million

to be disbursed****

Mediterranean
South-Eastern Neighbours**
Asia, Latin America
South Africa
Sub-total third countries

Member States*

6 520
10 235
2 480
 825
20 060

20 060

6 202
7 335
2 125
 824
16 486

2 744

19 230

 871
1 482
 63
 95
2 511

 511

3 022

* No ceiling for Member States as the loan operations were decided before enlargement rounds under the Mandate. Mediterranean and

South-Eastern Neighbours ceilings were amended following the enlargements rounds. 

** The ceiling includes Terra Turkey and Special Action Turkey.
*** Signatures up to 31.07.2008 (end of the Mandate 2000-2007). No additional signatures allowed after this date.
**** Loans have to be drawn within 10 years from the end of the Mandate.
At  the  same  date,  an  amount  of  EUR 10  603  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
31.12.2010

EUR million

to be disbursed

8 700
12 400
3 800
 900

25 800

6 807
6 762
2 500
 531

3 992
5 037
1 214
 360

16 600

10 603

EN 

10 

   EN 

 
 
 
 
 
 
Graph  A2:  Total  Annual  Risk  borne  by  the  Budget  related  to  third  countries  (EUR 
million) at 31.12.2010 for the period 2011-2016 

2500

2000

1500

1000

500

0

Euratom

MFA

EIB

2011

2012

2013

2014

2015

2016

Graph A3  presents  the  result  of  simulations  aiming  at  estimating  the  outstanding  amount 
covered  by  the  Fund  for  the  period  2011  to  2016.  These  simulations  are  based  on 
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. 

EN 

11 

   EN 

 
 
Graph A3: Estimated outstanding amount covered by the Fund from 2011 to 2016 (EUR 
million). 

45.000

40.000

35.000

30.000

25.000

20.000

15.000

Euratom

MFA

EIB

2011

2012

2013

2014

2015

2016

2.6. 

Payment under the Budget guarantees 

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).  

Procedures have been set up to guarantee the repayments of the borrowings due from the EU 
and also the guarantees given to third parties in connection with the EIB lending operations. 

2.6.1.  Borrowing/lending operations 

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 

12 

   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 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  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) 

by the re-use of funds from late payments 

the  Commission  may  also  need  to  propose  a  transfer  or  an  Amending  Budget  to 
b) 
budget the cash advance under the corresponding budget line "01 04 01 01 European Union 
guarantee for Union borrowings for balance-of-payments support.  

2.6.2.  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. 

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).  [the  regulation  of  2000  implements  a 
decision of 2007?] 
The loans (and loans guarantees) to accession countries were covered by the Guarantee Fund until the 
date of accession. From that date, those that remained outstanding ceased to be external actions of the 
Union and are therefore covered directly by the Budget. 

EN 

13 

   EN 

 
                                                 
The  guarantee  call  must  be  paid  within  three  months  of  receiving  the  EIB's  request,  either 
from the Fund7 or directly from the Budget should the resources of the Fund be insufficient8. 

The  EIB  administers  the  loan  with  all  the  care  required  by  good  banking  practice  and  is 
obliged to seek the recovery of the payments due after the guarantee has been activated. 

2.6.3.  Default interest penalties for late payment 

(a) 

EU or Euratom loans 

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.  

(b) 

EIB loans 

For EIB loans, EIB is entitled to default interest which 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 latter date, default interest is due to the Commission. 

7 

8 

Since  the  entry  into  force  of  the  Regulation  establishing  the  Guarantee  Fund  for  external  actions,  the 
Agreement between the EU and the EIB on the management of the Fund foresees that the Commission 
must  authorise  the  Bank  to  withdraw  the  corresponding  amounts  from  the  Fund  within  three  months 
from  the  date  the  EIB  calls  in  the  guarantee.  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). 
If there are insufficient resources in the Fund, the procedure for activating the guarantee is the same as 
for borrowing/lending operations, see 2.6.1 above. 

EN 

14 

   EN 

 
                                                 
3. 

COUNTRY-RISK EVALUATION 

Third countries representing important risks to the Budget in 2010, 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.  The 
evaluated  countries  are  grouped  in  4  sub-sections:  candidate  countries  (3.1),  potential 
candidate countries (3.2), Mediterranean partners (0) and other countries (3.4).  

Explanatory notes for country-risk indicators 

Abbreviations and English words used in tables 

S&P 

FDI 

GDP 

CPI 

est. 

m EUR 

bn USD 

n.a. 

Standard and Poor's 

Foreign Direct Investment 

Gross Domestic Product 

Consumer Price Index 

Estimates 

EUR million 

USD billion 

not available 

Standard footnotes used in the table 

1) 

2) 

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

The  higher  the  ranking  number,  the  lower  the  creditworthiness  of  the  country. 
Countries  are  rated  on  a  scale  of  zero  to  185;  185  represents  the  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. 

3.1. 

Candidate countries 

3.1.1.  Turkey 

The Turkish economy has recovered strongly, and grew by 8% in 2010 after a contraction by 
4.7%  in  2009.  A  double-digit  growth  of  imports  combined  with  a  domestic  credit  boom 
accommodated  rising  private  consumption  and  in  particular  investment.  Headline  inflation 
eased after reaching 10% in early 2010 and came down to 6.5% by the end of the year. On the 
back of the strong GDP growth, the fiscal deficit has narrowed to about 3.5% of GDP in 2010, 
and the ratio of public debt stock to GDP has come down by almost 4 percentage points in the 
previous year and amounted to 41% at the end of 2010. The current account deficit tripled in 
2010  as  imports  increased  by  more  than  15%  in  volume  terms  and  the  terms  of  trade 
worsened  on  higher  oil  and  commodity  prices.  FDI  inflows  fell  marginally  to  about  1%  of 
GDP.  Turkey's  gross  external  debt  declined  by  about  5%  of  GDP  in  2010  and  currently 
amounts  to  about  38%  of  GDP.  Private  external  debt  represents  two  thirds  of  the  total  debt 

EN 

15 

   EN 

 
and  showed  a  similar  decline.  International  reserves  fell  by  about  3%  to  EUR  80  billion, 
covering  about  4  months  of  imports.  Largely  as  a  result  of  the  improved  risk-appetite  for 
emerging  markets,  the  domestic  currency  appreciated  against  the  USD  and  the  EURO,  in 
particular in the first three quarters of 2010. 

Country-risk indicators: Turkey
 Output and prices

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

Public Finances
        Gen er al g o ver n m en t  b alan ce
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) 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 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)

(a) See explanatory notes at beginning of the tables.

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

(% of GDP)

       (m EUR)

(% of GDP)
(m EUR)

(TL p er  EUR)

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

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

2008

0.7
11.0
10.1

-2.2

119 607
-5.6
10723
79235
5.0
1.90

277 000
37.3
29.0
none
none

4848
34.5
3.3
4.1

SBA
(until 05/08)
yes

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

2009

2010

-4.7
14.0
6.5

-6.7

102 519
-2.3
4374
82400
5.0
2.20

268 000
43.4
35.6
none
none

5705
35.1
3.1
5.6

no

Ba3
BB-

8.0
12.0
8.5

-4.0

123 692
-6.5
4500
80000
4.5
2.00

245 000
38.3
32.6
none
none

7429
40.2
3.6
6.0

no

Ba2

BB

03/09   09/09 03/10   09/10

68     67
(186)   (186) 

    59       50

(186)   (186)

EN 

16 

   EN 

 
 
3.2. 

Potential candidate countries  

3.2.1. 

Serbia 

Following  a  3%  drop  of  output  in  real  terms  in  2009,  Serbia's  economy  began  to  slowly 
recover in 2010. The economic upturn in 2010 was broad-based, driven by foreign demand in 
the first half of the year while domestic consumption and investment began to pick up towards 
the  end  of  the  year.  Vigorous  export  activity, supported  by  the  gradual  economic  revival  in 
Serbia's  main  trading  partners,  and  the  dinar  depreciation,  helped  to  narrow  the  current 
account  deficit  further,  well  below  the  pre-crisis  level.  However,  the  deficit  of  the  income 
account was by a third higher and the surplus of the current transfers account slightly lower 
than a year ago. Financial and capital flows remained modest, with FDI and other investment 
markedly lower in comparison with 2009. Foreign exchange reserves of the National Bank of 
Serbia remained largely stable at over EUR 10 billion, covering some 8 months of imports. 
Foreign  currency  inflows  have  been  insufficient  to  cover  the  current  account  deficit  and 
Serbia’s foreign debt continued to increase. In 2010 gross external debt rose by almost EUR 
1.3  billion,  to  around  EUR  23.8  billion,  i.e.  close  to  80%  of  GDP.  Renewed  inflationary 
pressures became a key policy concern. At end-December, inflation soared to 10.3% year-on-
year  (6.6%  in  2009),  overshooting  the  6%  ±  2%  target  range  set  by  the  National  Bank  of 
Serbia. In 2010, public finances deteriorated as the fiscal policy allowed automatic stabilisers 
to operate. While revenue performance improved in the second half of the year as economic 
activity was picking up, a supplementary budget was nevertheless adopted in November. At 
4.8% of GDP, the deficit is the highest in the past decade. Public debt increased in 2010 to 
over 41% of GDP, mostly in the form of foreign loans. 

EN 

17 

   EN 

 
Country-risk indicators: Serbia

Ou t p u t  an d  p r ices

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

Public finances

Gen er al g o ver n m en t  b alan ce

Balan ce o f  p aym en t 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) m EUR
Months' imports of goods and services
Exchange rate (end of period)

Ext er n al d eb t

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 ar r an g em en t s

Type
(Date)
On track

2008

2009

2010

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

(% of GDP)

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

( p er  EUR)

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

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

5.5
14.4
8.6

-2.6

6
-17.1
1824
8189
6.5
88.60

21088
63.6
42.8
2 161 
no

1194
8.5
5.7
20.2

-3.0
16.9
6.6

-4.3

6
-5.7
1372
10601
11.5
95.90

22487
72.3
57.7
no
no

m
8.1
5.9
22.0

1.8 (Q4 estim.)
20
6.8

-4.8 (estim.)

6.3
-7.3
860
10001
9.8
105.50

23786
82.0
36.6
no
no

1609
8.7
6.8
25.5

SBA, 27 m, 
01 (05 rev.) 
yes

SBA, 27 m, 
01 (05 rev.) 
yes

In d icat o r s o f  m ar ket 's p er cep t io n  o f  cr ed it w o r t h in ess
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- 
03/08   09/08
88    126
(185)   (186)

none
BB- 
03/09   09/09
122   109
(186)   (186) 

none
BB- 
03/10  09/10

     76      70

(186)   (186)

(2)

(1) (2)   See explanatory notes

3.3.  Mediterranean partners 

3.3.1.  Egypt 

The  Egyptian  economy  gathered  momentum  in  2010  with  GDP  growing  by  5.1%,  up  from 
4.7%  in  2009.  Growth  was  mainly  driven  by  domestic  demand.  Private  consumption 
continued  to  grow  strongly  helped  by  falling  inflation  and  supported  by  three  government 
stimulus packages which also contributed to an increase in gross fixed investment following a 
sharp decline in 2009. The external side of the economy remained weak with both exports and 
imports falling compared to the previous year. Exports suffered from weak consumer demand 
in  Egypt's  main  trading  partners,  in  particular  the  EU  and  the  USA.  The  current  account 
remained in deficit at -1.5% of GDP. Compared to the situation before the crisis when it was 
regularly in surplus, the current account is still weighed down by lower revenues from tourism 
and the Suez Canal, weaker remittances and only a tentative pick-up in FDI inflows. Inflation 
(CPI) continued to decrease to 11% in 2010, having fallen from 18.3% in 2008. The general 
government balance expanded to -8% of GDP in 2010 from -6.6% of GDP in 2009 linked to 
government stimulus measures. 

The domestic political crisis starting in the spring of 2011 will cause short-term disruption to 
the Egyptian economy. On the domestic side, strikes involving numerous sectors of activity 
and the damage  caused  to governments buildings and property will have a negative impact. 
On  the  external  side,  there  has  been  a  sharp  fall  in  tourism  revenue,  early  indications  of  a 
decline in capital inflows, including FDI, and lower remittances as a result of the conflict in 
Libya where many Egyptians are employed. Output growth in 2011 is set to be significantly 

EN 

18 

   EN 

 
          
 
lower than in 2010, although the economy is expected to continue to grow, and the political 
and  economic  outlook  remains  highly  uncertain.  The  general  government  deficit  is  set  to 
expand further on account of higher public spending. Economic reforms are likely to be put 
on  hold  until  promised  elections  are  held  in  2011  as  the  interim  government  focuses  on 
maintaining stability. 

Country-risk indicators: Egypt

Ou t p u t  an d  p r ices

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

Pu b lic f in an ces

general government balance

Balan ce o f  p aym en t 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) m EUR
Months' imports of goods and services
Exchange rate (end of period)

Ext er n al d eb t

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

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 ar r an g em en t s

Type
(Date)
On track

2008

2009

2010

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

(% of GDP)

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

(p er  USD)

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

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

7.2
8.7
18.3

-6.8

56.6
1.9
10.5
31.2
5.8
5.4

31.5
20.9
5.6
no
no

2141
15.2
9.1
5.1

no
-
-

4.7
9.4
11.8

-6.6

49.0
0.5
12.1
35.1
5.8
5.5

36.4
16.7
6.8
no
no

2241
13.8
8.2
6.1

no
-
-

5.2
9.6
11.1

-8.0

50.3
-2.4
6.8
37.9
5.5
5.6

39.8
16.8
5.1
no
no

2178
11.8
7.3
5.8

no
-
-

In d icat o r s o f  m ar ket 's p er cep t io n  o f  cr ed it w o r t h in ess
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)

(1) (2)   See explanatory notes

Ba1
BB+

Ba1
BB+
03/08   09/08 03/09   09/09 03/10   09/10
70  70
(186)   (186) 

    69      64
(186)   (186)

68   68
(185)   (186)

Ba2
BB

EN 

19 

   EN 

 
 
3.3.2.  Lebanon 

Lebanon’s  economy  performed  remarkably  well  during  the  global  financial  crisis  with  real 
GDP  growing  by  8%  in  2010  from  nearly  7%  in  2009,  backed  by  buoyant  activity  in 
construction,  tourism,  commerce,  and  financial  services.  Consumer  price  inflation  increased 
to  4.7%  in  2010  from  nearly  1.2%  in  2009,  driven  partly  by  fuel  and  commodity  price 
increases.  The  country  also  experienced  a  significant  inflow  of  foreign  capital  during  2010, 
which helped the Central bank rebuild its foreign exchange reserves. The government deficit 
widened  to  8.7%  in  2010  from  8.1%  in  2009  and  the  current  account  balance  improved 
slightly  partly  due  to  a  moderate  increase  in  FDI  inflows.  The  external  debt-to-GDP  ratio 
went down to 160% from almost 170% in 2009 but it remains the highest in the world; almost 
half  of  it  is  denominated  in  foreign  currencies.  However,  little  progress  has  been  made  on 
structural  reforms  regarding  the  loss-making  electricity  sector,  the  value  added  tax  (VAT) 
rate,  elimination  of  extra-budgetary  funds,  or  the  improvement  of  the  budget  process. 
Lowering the government  debt-to-GDP ratio and alleviating  the pressure on public finances 
still  remain  the  top  medium-term  priorities;  they  require  expenditure  rationalization  and 
socially  balanced  tax  measures.  The  banking  sector  is  characterized  by  prudent  regulations 
and  supervision;  however  it  depends  heavily  on  short-term  deposit  inflows  from  non-
residents.  Lebanon  continues  to  suffer  from  high  underlying  vulnerabilities  fed  by  the 
maintenance of a fragile political system and regional tensions.  

Country-risk indicators: Lebanon

Ou t p u t  an d  p r ices

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

Public finances
          Gen er al g o ver n m en t  b alan ce
Balan ce o f  p aym en t s

Export of goods and services f.o.b
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period) bn EUR
Months' imports of goods and services
Exchange rate (end of period)

Ext er n al d eb t

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 ar r an g em en t s
Type
(Date)
On track

In d icat o r s o f  m ar ket 's p er cep t io n  o f  cr ed it w o r t h in ess

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)

(% of GDP)

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

( p er  USD)

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

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

9.3
n.a.
10.8

-9.6

5.3
-11.4
2.6
19.3
7.9
1 507.5

30 611
172.0
41.0
no
no

508
3.6
2.2
12.8

6.9
n.a.
1.2

-8.1

4.7
-11.3
3.7
28.6
10.3
1 507.5

31 892
171.0
33.6
no
no

539
3.3
2.3
15.3

8.0
n.a.
4.7

-8.7

5.3
-11.1
3.9
32.2
10.3
1 493.91

34 440
160.00
no
no
no

598
3.2
2.3
15.1

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)

B1
B
03/10    09/10
   82       76
(185)   (185)

(2)

EN 

20 

   EN 

 
 
3.3.3.  Tunisia 

Tunisia  showed  remarkable  resilience  to  the  global  economic  crisis  during  2010  with  real 
GDP growth reaching 3.8% from 3.0% in 2009, supported by a rebound in industrial activity 
and  investment.  The  budget  deficit  (excluding  grants  and  privatization)  stabilized  at  3%  of 
GDP  and  the  current  account  deficit  narrowed  to  2.2%  from  3.1%  in  2009.  However, 
Tunisia's official reserves had fallen to EUR 7.2 billion by the end of 2010 (corresponding to 
6 months of imports of goods and services) partly reflecting seasonal factors, but remaining at 
a comfortable level. Public debt remained stable, corresponding to 11.4 months of exports of 
goods.  Unemployment  increased  only  marginally  but  concerns  mainly  young  educated 
people. Inflation reached 4.5% from 3.5% in the previous year, due to rising food prices. Low 
dependence  on  external  financing  and  a  significant  growth  on  deposits  enabled  to  good 
functioning  of  the  banking  sector  during  2010.  Tunisia  has  made  great  progress  in 
macroeconomic  reforms  with  the  implementation  of  new  tax  system  establishing  public 
spending controls (including subsidies) units. These reforms are expected to reduce the debt-
to-GDP ratio below 40% and the government deficit to 2% by 2015. 

Despite  the  robustness  of  the  Tunisian  economy  to  global  factors,  the  recently  unfolding 
political crisis of the country and the developments in Libya has turned into a major source of 
destabilisation.  The  budget  deficit  is  expected  to rise  in  2011  in  light  of  the  deceleration  of 
growth.  The  current  account  deficit  is  also  expected  to  grow  in  2011  due  to  the  decline  in 
tourism revenues, FDI inflows and remittances, and the increase in oil and commodity prices.  

Country-risk indicators: Tunisia
Ou t p u t  an d  p r ices

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

Public finances
       Gen er al g o ver n m en t  b alan ce
Balan ce o f  p aym en t s

Export of goods and services f.o.b.
Current account balance
Net inflow of foreign direct investment
Official reserves, including gold (end of period) bn EUR
Months' imports of goods and services
Exchange rate (end of period)

Ext er n al d eb t

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 ar r an g em en t s

Type
(Date)
On track

In d icat o r s o f  m ar ket 's p er cep t io n  o f  cr ed it w o r t h in ess
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

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

(% of GDP)

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

( p er  USD)

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

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

2008

4.6
14.2
5.0

-0.8

21.1
-4.2
2 300
6.1
4.1
1.31

20 776
50.7
16.5
no
no

1683
12.0
10.8
10.7

no
-
-

2009

3.0
13.3
3.5

-3.0

16.8
-3.1
1 300
8.1
5.6
1.35

20 129
50.9
22.0
no
no

1900
11.7
12.6
15.1

no
-
-

2010

3.8
14.0
4.5

-5.0

17.3
-2.2
1 296
7.2
6.0
1.40

19 619
50.7
11.4
no
no

2220
12.0
15.1
17.1

no
-
-

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

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

Baa3
BBB 
03/10   09/10

      71      69

  (185)  (185)

(2)

EN 

21 

   EN 

 
 
3.3.4.  Morocco 

The Moroccan economy grew by 3.2% in 2010, compared to 4.8% in 2009. The slowdown is 
mainly  due  to  the  weak  growth  in  agriculture.  FDI  inflows  increased  by  an  estimated  1.5% 
compared to 2009 and are likely to recover only gradually. Inflation picked-up slightly due to 
higher food and fuel prices but these increases have been partly absorbed by the government 
subsidies.  The  fiscal  deficit  expanded  in  2010  to  4%  of  GDP  from  2.1%  in  2009.  On  the 
revenue side, indirect taxes and customs duties rebounded after having fallen sharply in 2009. 
On the expenditure side food and fuel subsidies rose to around 2% of GDP. The level of debt 
increased  slightly  to  58.5%  of  GDP  from  57%  of  GDP  in  2009.  Higher  commodity  prices 
contributed  to  an  increase  of  the  current  account  deficit  which  rose  from  5.8%  of  GDP  in 
2010. Average inflation in 2010 was 1.4%, up from 1% in 2009, while government subsidies 
will  help  contain  further  price  rises.  Despite  the  slight  increase  in  inflationary  pressure,  the 
Bank al-Maghrib (BAM) chose not to tighten monetary policy and maintained its policy rate 
at 3.25%. In March 2010, the BAM also lowered reserve requirements from 8% to 6%. In a 
sign of growing international confidence, Morocco was assigned investment grade status by 
Standard and Poor's Rating Agency in March 2010. In September, the government also issued 
the first government bonds on the international market for three years, EUR 1 billion in ten-
year  Eurobonds,  which  were  oversubscribed  and  mainly  purchased  by  European  and  US 
investors. Foreign reserves increased slightly in 2010, representing about 6 months of imports, 
to nearly the level of external debt which stands at 23% of GDP. 

Country-risk indicators: Morocco

Ou t p u t  an d  p r ices

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

Public finances

General government balance

Balan ce o f  p aym en t s

Exports of goods and services f.o.b (3)
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 er n al d eb t

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 ar r an g em en t s

Type
(Date)
On track

2008

2009

2010

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

(% of GDP)

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

( p er  USD)

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

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

5.6
9.6
3.7

0.4

33.3
-6.4
2.0
22.0
7.5
7.25

17.2
19.4
6.5
no
no

1929
13.7
8.4
4.3

no
-
-

4.9
9.1
1.0

-2.1

26.1
-5.8
0.7
21.9
6.9
7.84

18.8
20.9
6.6
no
no

2224
13.7
8.9
6.4

no
-
-

3.2
9.8
1.4

-4.0

27.1
-7.1
2.4
22.5
6.7
8.33

20.1
22.8
6.4
no
no

2425
13.1
9.0
6.7

no
-
-

In d icat o r s o f  m ar ket 's p er cep t io n  o f  cr ed it w o r t h in ess
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-
03/10   09/10
   57       62
(186)    (186) 

(2)

(1) (2)   See explanatory notes
(3) Figures of the former report at 30.06.2010 did not include export of services 

EN 

22 

   EN 

 
 
3.3.5. 

Syria 

The  Syrian  economy  recovered  in  2010  with  GDP  growth  reaching  3.2%  despite  a  fourth 
consecutive  poor  harvest  and  the  stagnation  of  oil  production.  Economic  activity  has  been 
largely  supported  by  the  fiscal  policy  adopted  by  the  government  in  order  to  mitigate  the 
effects  of  the  crisis.  The  services  balance  contributed  to  a  reduction  in  the  current  account 
deficit  to  3.9%  of  GDP  from  4.5%  in  2009.  At  the  end  of  2010,  foreign  exchange  reserves 
covered 13 months of imports reflecting the quite robust financial situation of the country. 

Since March 2011, Syria has been facing popular protests in the context of spreading unrest 
against authoritarian regimes of the region. The government's reaction has been a mixture of 
concession and repression. The political situation will have significant negative consequences 
for the Syrian economy with a growth forecast of only 1.1% for 2011. The unrest halted the 
implementation  of  reforms,  such  as  the  reorganisation  of  the  public  sector  and  the 
introduction of VAT. The strong increase in wages in the public sector (up to 62%) and the 
reintroduction of subsidies decided by the government will have a strong negative impact on 
the  state  budget  by  pushing  up  the  deficit  to  an  estimated  7.7%  of  GDP.  The  increase  in 
minimum salaries in the private sector, comparable to the one in the public sector, is expected 
to  cause  a  strong  rise  in  unemployment.  Also,  inflation  will  surge.  The  Syrian  pound  has 
slipped about 15% against the dollar since April obliging the Central bank of Syria to bring 
back restrictions on foreign- currency transactions. The closure of borders with surrounding 
countries, combined with the sanctions decided by the international community in response to 
repressive  government  policy,  will  offset  the  efforts  that  have  been  made  to  diversify  the 
economy.  Foreign  investment  is  expected  to  drop  and  tourism  sector  is  faced  with  a  major 
decline,  due  to  fewer  visitors  especially  from  Western  countries.  The  foreign  reserves 
accumulated during the previous years, combined with higher revenues than expected from oil 
exports, gave Syrian authorities the possibility to compensate the loss of revenues due to the 
slowdown of activity. If the unrest continues, Syria will be facing a recession, or even a risk 
of  bankruptcy,  obliging  national  authorities  to  negotiate  financial  assistance  with  regional 
allies. 

EN 

23 

   EN 

 
Country-risk indicators: Syria

Ou t p u t  an d  p r ices

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

Public finances
                                          Gen er al g o ver n m en t  b alan ce
Balan ce o f  p aym en t 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) m EUR
Months' imports of goods and services
Exchange rate (end of period)

Ext er n al d eb t

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

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 ar r an g em en t s

Type
(Date)
On track

2008

2009

2010

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

4.3
10.9
15.7

(% of GDP)

-2.5

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

( p er  USD)

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

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

17.0
-1.4
1 627
11.6
9.4
46.0

7 112
14.5
1.2
no
no

536.1
3.8
10.1
4.2

no
-
-

5.0
8.5
3.8

-9.0

11.8
-2.8
1 514
12.7
10.7
45.5

7 467
13.9
0.8
no
no

762.8
4.7
13.7
8.6

no
-
-

5.0
8.4
4.4

-3.2

14.3
-3.9
1 850
13.7
9.4
46,7   (3 Q)

7 296
12.3
1.5
no
no

796
4.3
14.6
7.4

no
-
-

In d icat o r s o f  m ar ket 's p er cep t io n  o f  cr ed it w o r t h in ess
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)

(1) (2)   See explanatory notes

none
none

none
none
03/08   09/08 03/09   09/09 03/10   09/10
163    149
(186)  (186)

  140     128
(186)  (186)

116   115
(185)  (186)

none
none

EN 

24 

   EN 

 
 
3.3.6. 

Jordan 

The global economic crisis affected economic activity in Jordan during 2010 with real GDP 
growing by less than 3% compared to 5.6% in 2008. The recent slowdown is partly attributed 
to decreased FDI inflows from surrounding Arab states. Despite the economic slowdown and 
the  increase  in  international  fuel  and  food  prices,  unemployment  decreased  slightly  during 
2010  and  reached  2008  levels  of  almost  12.5%  of  total  labour  force.  Inflation  decreased  to 
5.7%  from  6.7%  in  2009.  The  government  deficit  narrowed  to  8.4%  of  GDP  in  2010  from 
12.9% in 2009, mainly due to reductions in the operational cost of Ministries, a hiring freeze 
for  civil  servants  and  greater  prioritization  of  capital  spending.  In  response  to  fiscal 
consolidation  measures,  public  debt-to-GDP  ratio  declined  to  about  25%  from  almost  32% 
and the current account deficit narrowed to 4.3% in 2010 from 6.8% in 2009. Following the 
successful  first-time  issuance  of  a  USD  750  million  five-year  Eurobond  in  November  2010 
external  reserves  increased  to  USD  12.6  billion  in  2010,  representing  11.5  months  of  next 
year’s exports of goods and services. 

Jordan  has  made  remarkable  progress  in  structural  reforms  and  capacity-building,  such  as 
strengthening the legal framework for public-private partnerships (PPP) and promoting draft 
regulations  to  lower  the  cost  of  credit.  Economic  growth  is  set  to  increase  steadily  in  the 
medium-term  as  exports  and  investment  recover,  but  the  near-term  outlook  is  subject  to 
uncertainty  related  to  world  commodity  price  developments,  the  growth  path  of  the  Gulf 
countries  to  which  Jordan’s  business  cycle  is  closely  linked  and  possible  spillover  of  the 
political instability in the Arab world. 

Country-risk indicators: Jordan

Ou t p u t  an d  p r ices

Real GDP growth rate
Unemployment (average)
Inflation rate ( CPI) (Dec/Dec)

Public finances
      Gen er al g o ver n m en t  b alan ce
Balan ce o f  p aym en t 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
Months of next years imports of goods and services
Exchange rate (end of period)

Ext er n al d eb t

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

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 ar r an g em en t s

Type
(Date)
On track

In d icat o r s o f  m ar ket 's p er cep t io n  o f  cr ed it w o r t h in ess
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

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

(% of GDP)

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

(JOD p er  USD)

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

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

5.6
12.7
9.4

-9.9

7.9
-11.9
2.8
8.9
9
0.7

6.55
82.5
34.2
no
no

299
2.1
6.1
5.1

-
-
-

3.1
13.5
6.7

-12.9

6.4
-6.8
2.3
10.2
10
0.7

6.76
106.3
10.3
no
no

369
2.3
7.3
7.7

3.2
12.5
5.7

-8.4

6.6
-4.3
2.4
12.6
11.5
0.7

6.27
85.5
10.2
no
no

395
2.1
8.4
8.0

Baa3
BB

Ba2
BB

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

Ba2
BB
03/10   9/10

74    75
(185)   (186)

73   69
(186)   (186)

   72       67
(185)    (185)

(2)

EN 

25 

   EN 

 
 
3.4. 

Other countries 

3.4.1. 

South Africa 

Following  a  contraction  by  1.8%  of  GDP  in  2009,  South  Africa's  economy  has  been 
recovering strongly in 2010 and real GDP grew by 2.8%. High commodity prices, low interest 
rates,  and  faster  global  growth,  have  been  the  main  drivers  of  South  Africa's  economic 
recovery.  Improving  household  consumption  and  accelerating  investment  will  support  an 
increase  in  economic  growth  over  the  medium  term.  South  Africa  relies  on  exports, 
concentrated  primarily  on  commodities,  which  have  been  pushed  up  by  stronger  external 
demand and supported by the depreciation of the Rand. After running a budget deficit of an 
estimated  5.3%  of  GDP  in  the  current  2010/11  fiscal  year,  national  authorities  project  the 
shortfall  to  remain  the  same  in  2011/12  (instead  of  previously  forecasted  deficit  of  4.6%  of 
GDP). Monetary policy is focused on trying to keep annual inflation within the official target 
range  of  3-6%.  The  financial  sector  weathered  the  global  financial  crisis  quite  well.  During 
2010 South Africa received net inflows of 92 billion ZAR (i.e. 13.3 billion USD) in foreign 
capital, which contributed to upward pressure on the exchange rate. Since the fourth quarter 
of  2010,  however,  South  Africa  has  experienced  capital  outflows.  Along  with  uncertainties 
and volatility in global financial markets, this contributed to a depreciation of the rand. The 
current  account  deficit,  which  had  reached  more  than  7%  of  GDP  in  2007  and  2008,  has 
returned to 4% in 2009 and is expected to stand at 3.2% of GDP in 2010. Foreign exchange 
reserves  rose  from  USD  34.1  billion  in  2008  to  an  expected  USD  43.8  billion  in  2010. 
External debt is rising from a low level, but is expected to be financed by capital inflows. 

Country-risk indicators: South Africa

Output and prices

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

Public finances
     Gen er al g o ver n m en t  b alan ce
Balance o f  p aym en t 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
Months of imports of goods and services
Exchange rate (end of period, + is depreciation of LE)

Ext er n al d eb t

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 ar r an g em en t s

Type
(Date)
On track

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

(% of GDP)

(bn EUR)
(en % du PIB)
(m  €)

(r an d s p er  EUR)

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

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

2008

2009

2010

3.7
21.9
11.5

-0.3

66.5
-7.1
8060.4
34.1
4.6
13.1

52254
15.2
9.4
no
no

-1.8
24.3
7.1

-5.0

56
-4.0
9586.1
35.8
6.7
10.7

52429
18.4
10.9
no
no

636 
4.5 
1.2 
1.0 

no
-
-

743 
4.6 
1.4 
1.3 

no
-
-

3.0
24.8
5.6

-4.8

77.6
-4.3
11977.9
42.3
6.3
8.9

54158
16.2
10.8
no
no

1087
5.9
2.0
1.4

no
-
-

In d icat o r s o f  m ar ket s' p er cep t io n  o f  cr ed it w o r t h in ess
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+
03/10  09/10
    53     44

(186)  (186)

(2)

(1) (2)   See explanatory notes

EN 

26 

   EN 

 
             
               
              
                
              
                
            
               
 
3.4.2.  Brazil 

Brazil  recovered  strongly  from  the  crisis  and  grew  at  a  record  rate  of  7.5%  in  2010  driven 
mainly  by  strong  domestic  demand.  Growth  is  expected  to  slow  to  4.5-5%  in  2011.  The 
output  gap  is  currently  positive  and  unemployment  is  at  an  historical  low.  Inflationary 
pressures  have  been  mounting  since  the  beginning  of  2011,  reflecting  not  only  higher 
international food prices but also internal factors. Inflation reached 6% in February (year-to 
year) compared to a midpoint target of 4.5%, but still remains within the limits of the upper 
band of 6.5%. The Brazilian Central Bank continued to tighten its policy, as it started at the 
end  of  2010,  by  raising  the  SELIC  twice  this  year  up  to  11.75%  and  introducing  macro-
prudential  measures.  Further  increases  in  the  policy  rate  are  expected  and  the  Brazilian 
Central  Bank  signalled  its  readiness  to  introduce  additional  macro-prudential  measures  if 
necessary. On the fiscal side, the government announced spending cuts worth USD 30 billion 
(around 1.3% of GDP) in the 2010 budget, ending the 2009 fiscal stimulus. The debt-to-GDP 
ratio  declined  from  42.8%  in  2009  to  40.4%  in  2010  and  the  Brazilian  Ministry  of  Finance 
expects that the tendency will continue in 2011. 

National currency continued to appreciate, due to strong capital inflows: Brazil has been one 
of the top recipients of capital inflows (USD 92 billion in 2009 and around USD141 billion in 
the first 11 months of 2010), and one of the top beneficiaries of the improvement in the terms 
of  trade.  The  authorities  have  tried  to  contain  the  appreciation  of  the  real  through  sterilized 
interventions  in  the  foreign  exchange  markets  that  have  pushed  international  reserves  to  a 
record  level.  Meanwhile  imports  grew  at  a  record  36.2%  in  2010,  supported  by  the  strong 
exchange  rate  as well as by  the dynamism of the domestic demand. As a result, the current 
account deficit reached 2.3% of GDP in 2010 and is expected to widen in 2011.  

EN 

27 

   EN 

 
Country-risk indicators: Brazil

Output and prices

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

Public finances

Gen er al g o ver n m en t  b alance

Balance o f  p aym en t 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
Months of imports of goods and services
Exchange rate (end of period)

Ext er n al d ebt

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 ar r an g em en t s

Type
(Date)
On track

In d icat o r s o f  m ar ket s' p er cep t io n  o f  cr ed it w o r t h in ess
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)

(% of GDP)

(m EUR)
(en % du PIB)
(m  EUR)

(r eais p er  EUR)

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

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

5.1
7.9
5.6

-1.9

140539
-1.7
20738
193.7
10.0
2.7

139346
13.2
22
no
no

621
4.4
0.4
0.4

no

-0.6
8.1
4.9

-3.5

110072
-1.5
14153
238.5
13.4
2.8

142862
13.1
24
no
no

691
4.3
0.5
0.6

no

7.5
6.7
5

-1.7

135770
-2.2
30357
288.5
11.9
2.3

178203
11.9
26
no
no

826
4.5
0.5
0.6

no

Ba1
BBB-
03/08   09/08   
63    60
(185)    (186)

Baa3
BBB-

Baa3
BBB-

03/09   09/09 03/10   09/10

51   48
(186)   (186)

     51     42

(100)  (100)

(2)

EN 

28 

   EN