COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the position of the Council at first reading on the adoption of a Decision of the European Parliament and of the Council providing further macro-financial assistance to Georgia
Date: 2012-05-11
Institutions: European Commission
Subjects: EU aid, Georgia, economic conditions, economic stabilisation, financial aid, financial cooperation

EUROPEAN COMMISSION 

Brussels, 11.5.2012  
COM(2012) 219 final 

2010/0390 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to Article 294(6) of the Treaty on the Functioning of the European Union 

concerning the 

position of the Council at first reading on the adoption of a Decision of the European 
Parliament and of the Council providing further macro-financial assistance to Georgia

EN 

   EN 

 
 
 
 
  
 
 
 
2010/0390 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to Article 294(6) of the Treaty on the Functioning of the European Union 

concerning the 

position of the Council at first reading on the adoption of a Decision of the European 
Parliament and of the Council providing further macro-financial assistance to Georgia 

1. 

BACKGROUND 

Date of transmission of the proposal to the European Parliament and 
to the Council  
(document COM(2010) 804 final – 2010/0390 COD): 

13 January 2011 

Date of the opinion of the Committee of the Regions: 

not applicable 

Date of the position of the European Parliament, first reading: 

10 May 2011 

Date of transmission of the amended proposal: 

not applicable 

Date of adoption of the common position of the Council 

10 May 2012  

2. 

OBJECTIVE OF THE PROPOSAL FROM THE COMMISSION 

The proposal was part of the potential EU deliverables announced at the donor conference in 
2008. The objectives of the proposed Macro-Financial Assistance (MFA) are to:  

•  Contribute  to  covering  the  external  financing  needs  of  Georgia  and  to  alleviating 

budgetary financing needs. 

•  Support  the  fiscal  consolidation  effort  and  external  stabilisation  in  the  context  of  an 

International Monetary Fund programme. 

•  Support structural reform efforts aimed at raising sustainable growth and increasing the 

transparency and efficiency of public finance management. 

•  Facilitate  and  encourage  efforts  by  the  authorities  of  Georgia  to  implement  measures 
identified under the EU-Georgia ENP Action Plan and the Eastern Partnership so as to 
promote  closer  economic  and  financial  integration  with  the  EU,  also  in  line  with  the 
plan  to  conclude  a  "Deep  and  Comprehensive  Free  Trade  Area"  between  the  two 
parties. 

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3. 

COMMENTS ON THE POSITION OF THE COUNCIL 

3.1.  General comments on the Council position at first reading 

The  comprehensive  EU  package  of  up  to  EUR  500  million  to  support  Georgia's  economic 
recovery,  pledged  at  the  October  2008  International  Donor  Conference  in  Brussels,  in  the 
aftermath  of  the  August  2008  conflict  with  Russia,  included  two  potential  Macro-Financial 
Assistance  operations,  amounting  to  EUR  46  million  each.  The  first  part  was  successfully 
implemented  during  2009-10.  For  the  second  part,  the  Commission  adopted  a  proposal  for 
further MFA to Georgia on 13 January 2011.  

The  European  Parliament's  plenary  voted  on  the  proposal  on  10  May  2011  and  adopted  a 
legislative  resolution  with  amendments  which  were  fully  accepted  by  the  Commission  and 
incorporated in the text. These amendments primarily aimed at reflecting the entry into force 
of  the  new  comitology  regulation  in  March  20111.  The  Commission  acknowledges  that 
amendments  to  the  initial  proposal  were  needed  due  to  the  new  comitology  regulation,  and 
supports  the  European  Parliament's  view  that  the  adoption  of  the  Memorandum  of 
Understanding  (MoU)  for  the  MFA  programme  should  be  governed  by  the  advisory 
procedure, rather than the examination procedure as suggested by the Council.  

On  15  December  2011,  COREPER  reached  a  qualified  majority  agreement  to  adopt  a 
common position, which insists on the use of the examination procedure for the adoption of 
the  MFA  Memorandum  of  Understanding.  This  was  confirmed  by  the  political  agreement 
adopted by the Council on 23 January 2012. 

During the previous discussions at the Financial Counsellors Working Party, the Commission 
argued  in  favour  of  the  use  of  the  advisory  procedure  for  the  adoption  of  the  MoU,  and 
supported  the  Presidency's  proposed  compromise  solution.  This  solution  would  have 
established  the  examination  procedure  as  a  rule,  but  would  have  allowed  for  the  advisory 
procedure,  in  this  case  on  the  basis  of  Article  2.3,  second  sentence,  of  the  comitology 
regulation, which foresees that, under duly justified cases, the advisory procedure may apply 
for  the  adoption  of  implementing  acts  in  cases  where  the  examination  procedure  is  in 
principle applicable. The proposed compromise text argued that since the proposed MFA was 
(i)  a  follow-up  to  the  operation  approved  in  2009  and  (ii)  had  only  a  modest  maximum 
amount (of EUR 46 million), there was a case for applying the advisory procedure. However, 
the Presidency could not build a consensus and its compromise solution was not adopted. 

The  Commission  is  concerned  about  the  delays  that  a  second  reading  will  imply  for  the 
proposed assistance: it is important that the proposed MFA for Georgia is approved as quickly 
as  possible.  Approximately  a  year  elapsed  since  the  Commission  adopted  the  proposal  in 
January  of  2011  and  the  Commission  considers  it  regrettable  that  this  delay  is  taking  place 
despite the fact that the two co-legislators agree on the substance of the proposal, which, as 
noted, stems from a pledge made in 2008. 

The Commission believes that it is crucial to find a quick solution on whether an advisory or 
examination procedure should be applied for the MoU adoption. It should also be noted that if 
the  case  of  the  proposal  for  Georgia  is  not  solved,  this  issue  would  risk  blocking  any 
forthcoming  MFA  proposal,  a  scenario  that  must  be  avoided,  not  least  since  the  worsening 
global financial environment and the economic and financial impact of the Arab Spring in the 

1 

Regulation (EC) No 182/2011 of the European Parliament and of the Council of 16 February 2011. 

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EU's Southern Neighbourhood may result in new requests for complementary MFA support 
from the EU. 

3.2.  Agreement at the stage of the Council's position 

Since  the  adoption  by  the  European  Parliament  of  its  position  at  first  reading,  the  inter-
institutional  discussions  between  the  Council  and  the  Parliament  have  not  been  successful. 
The  Parliament  strongly  prefers  the  use  of  the  advisory  procedure  for  the  adoption  of  the 
Memorandum  of  Understanding,  while  the  Council  believes  that,  according  to  the  new 
Comitology regulation, the examination procedure should be used. Informal meetings have not 
resulted in a compromise on this issue. 

4. 

CONCLUSION 

The  Commission  favours  the  application  of  the  advisory  procedure  for  the  adoption  of  the 
MoU. It does therefore not agree with the common position of the Council as adopted on 10 
May 2012. However, as indicated above, the Commission believes that it is crucial to find a 
quick  solution  and  stands  ready  to  contribute  to  finding  an  early  compromise  on  this  issue 
between the two co-legislators. 

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