Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL providing further macro-financial assistance to Tunisia
Date: 2016-02-12
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: International Monetary Fund, Tunisia, balance-of-payments deficit, economic reform, economic stabilisation, financial aid, medium-term credit, structural adjustment

EUROPEAN 
COMMISSION 

Brussels, 12.2.2016  
COM(2016) 67 final 

2016/0039 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

providing further macro-financial assistance to Tunisia 

{SWD(2016) 30 final} 

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EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal  

In parallel to a protracted and fragile political transition process since the 2011 revolution, the 
Tunisian  economy  has  suffered  from  continuous  domestic  unrest,  regional  instability 
(including  the  impact  of  the  Libyan  conflicts),  and  a  weak  international  environment 
(particularly  in  the  euro  area).  These  unfavourable  developments  substantially  weakened  its 
growth performance, as well as its fiscal and balance of payments positions. In 2015, largely 
as  a  result  of  the  negative  economic  impact  of  terrorist  attacks  (particularly  on  tourism,  the 
transport  sector  and  investment)  and  of  production  disruptions  due  to  social  unrest,  growth 
projections have been revised markedly down, while the situation is negatively affecting  an 
already  vulnerable  balance  of  payments  and  fiscal  position,  creating  important  financing 
needs. 

At the same time, the country has continued taking significant steps towards the consolidation 
of  democratic  mechanisms,  including  the  approval  of  a  new  Constitution  in  January  2014, 
although the political transition has not been without difficulties and episodes of instability. 

Tunisia reached in mid-April 2013 an agreement with the International Monetary Fund (IMF) 
on a 24-month Stand-By Arrangement (SBA) in the amount of USD 1.75 billion, which was 
approved  by  the  IMF  Board  on  June  2013,  and  which  was  subsequently  extended  until 
December 2015. It also requested in August 2013 complementary Macro-Financial Assistance 
(MFA) from the EU. In response, the European  Commission  proposed  a  MFA  of  EUR  250 
million  in  December  2013  in  the  form  of  loans  (MFA-I),  which  the  co-legislators  raised  to 
EUR  300  million  and  approved  in  May  2014.  The  Memorandum  of  Understanding  (MoU) 
defining the policy conditions related to this loan entered into force in March 2015.  
Following  the  completion  of  the  6th  review  of  the  IMF  programme  last  September,  Tunisia 
requested a successor arrangement with the IMF, probably of a 4-year duration. The new IMF 
programme is still under negotiation but expected to be sent for IMF Board approval in the 
spring of 2016. The MFA-I operation is on track, despite some delays in its implementation. 
The first tranche was disbursed on 7 May 2015 and, with Tunisia having met the conditions 
agreed with the EU in the MoU, the second tranche was disbursed on 1 December 2015. The 
third and last tranche is expected to be disbursed in the second quarter of 2016, provided that 
the MoU conditions are met.  

In  this  context,  the  Tunisian  Prime  Minister,  in  a  letter  sent  to  President  Juncker  in  August 
2015, and reiterated in December by a letter from the Minister of Development Cooperation 
and Investment, requested a second MFA operation from the EU in the amount of EUR 500 
million, which would accompany the successor IMF programme. In view of the strong impact 
the security situation is having on Tunisia's economy and  external financing  needs during a 
period  of  consolidation  of  its  political  transition,  and  after  an  updated  assessment  of  the 
country’s  external  financing  needs  conducted  in  liaison  with  the  IMF,  the  European 
Commission is submitting to the European Parliament and the Council a proposal to grant a 
second  MFA  (MFA-II)  to  the  Republic  of  Tunisia  amounting  to  a  maximum  of  EUR  500 
million, in the form of medium-term loans. The proposed amount is also consistent with the 
expected  size  of  the  IMF  programme,  with  the  significant  risks  the  Tunisian  economy  is 
currently facing, and with the strong commitment of the EU to support Tunisia's political and 
economic transition. 

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The  proposed  new  MFA  would  help  Tunisia  cover  part  of  its  residual  external  financing 
needs, estimated at about USD 2.9 billion for the period 2016-17, in the context of the new 
IMF  programme.  It  would  reduce  the  economy’s  short-term  balance  of  payments  and  fiscal 
vulnerabilities, while coordinating with the adjustment and reform programmes to be agreed 
with  the  IMF  and  the  World  Bank,  as  well  as  with  the  reforms  agreed  under  the  EU’s 
budgetary support operations, in particular the State Building Contracts Programme d’appui à 
la relance (PAR). The proposed MFA-II is consistent with the orientations of the European 
Neighbourhood Policy (ENP) and with efforts of the international community, including the 
G-7 Deauville Partnership initiative, to assist Tunisia in these challenging times. 

In this context, and as elaborated in the Commission Staff Working Document accompanying 
this  proposal,  the  Commission  considers,  based  also  on  the  assessment  of  the  political 
situation made by the European External Action Service, that the political and economic pre-
conditions for a MFA operation of the proposed amount and nature are satisfied. 

• 

General context  

Following two years of stable, but low, GDP growth, in the context of the IMF programme 
(2.3% in both 2013 and 2014), growth for 2015 has been revised down to 0.5% compared to a 
forecast of 3% at the beginning of the year. Tunisia's economy has suffered a strong setback 
largely as a consequence of the terrorist attacks of 2015, which have affected key economic 
sectors. The negative effect of the attacks on the tourism sector (which contributes about 7% 
of GDP and accounts for around 15% of the workforce) and the transport sector (contributing 
also  about  7%  of  GDP,  20%  of  which  depends  on  tourism  travel),  as  well  as  on  foreign 
investors'  sentiment,  coupled  with  disruptions  in  phosphate  production,  transport  and  other 
sectors  (due  to  work  stoppages  and  strikes),  have  contributed  to  this  downward  revision. 
Tunisian  authorities,  and  the  IMF,  expect  growth  to  pick  up  in  2016,  in  the  absence  of 
additional shocks, supported by a slow recovery of the tourism sector and a normalisation of 
domestic production. Nevertheless, this baseline scenario has strong risks to the downside. 

These  low  growth  rates  will,  in  any  case,  not  suffice  to  make  a  significant  dent  on 
unemployment,  which  remains  high  at  15%,  and  is  particularly  high  among  the  young  and 
graduates (over 30%) and among women (21.6%). Furthermore, employment in the informal 
economy still accounts for around 50% of workers aged between 15 and 24.  

Inflation  averaged  5.5%  in  2014  and  is  on  a  downward  trend,  in  view  of  declining 
international commodity prices, stable domestic food production, the weakening of domestic 
demand  and  a  prudent  monetary  policy.  Headline  inflation  is  expected  to  moderate  to  an 
average of 4.9% in 2015 and stay at around 4% over the next 5 years. 

After  tightening  monetary  policy  between  2012  and  mid-2014  in  response  to  inflationary 
pressures  and  the  deterioration  in  external  and  fiscal  balances,  the  central  bank  cut  its 
benchmark rate  by 50 basis points (to 4.25%) last October, to help reignite the faltering GDP 
growth amid slowing CPI inflation.  

Regarding  the  public  finances,  Tunisia  achieved  a  certain  degree  of  fiscal  consolidation  in 
2014,  as  the  structural  fiscal  balance  (which  notably  excludes  banking  recapitalisation  costs 
and  other  one-off  items)  declined  from  5.1%  of  GDP  in  2013  to  4.2%  of  GDP  in  2014. 
However,  in  2015,  largely  driven  by  expenditure  measures  taken  in  the  aftermath  of  the 
terrorist  attacks,  and  despite  expenditure  savings  generated  by  the  lower  than  expected  oil 
prices,  the  structural  deficit  is  expected  to  increase  to  4.7%  of  GDP.  The  2016  budget  law 
foresees  a  reduction  in  the  structural  deficit  back  to  4.2%  of  GDP,  to  be  achieved  largely 
through  an  increase  in  revenues  (in  part  due  to  the  introduction  of  a  VAT),  and  lower 
expenditure on subsidies (due mostly to the assumptions of a lower international oil price and 

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a stable exchange rate). Nevetherless, the foreseen hiring of around 15,000 additional public 
employees (mostly for the defense and security sectors) will increase the wage bill. 

Meanwhile,  the  debt  of  the  general  government  has  continued  to  increase,  reaching  50%  of 
GDP  in  2014  and  is  forecast  to  peak  at  61%  of  GDP  by  the  end  of  2018  before  starting  to 
reverse the trend. Also, a substantial increase in public debt amortisations is scheduled to take 
place in the coming two years (from about USD 600 million in 2015 to more than USD 1.4 
billion in 2017, and almost USD 1.2 billion in 2018). 

Turning  to  the  balance  of  payments,  the  current  account  deficit  further  widened  in  2014, 
reaching 8.9% of GDP compared to 8.3% of GDP in 2013, and is expected to remain at an 
unsustainable large level in 2015, despite the decline in oil prices, weaker domestic economic 
activity  and  improved  export  performance.  The  negative  effects  on  tourism  of  the  Sousse 
terrorist attack are expected to put additional pressure on the current account deficit, pushing 
the deficit back towards 8.8% of GDP. Private capital inflows in Tunisia have also weakened 
since 2011, contributing to the vulnerabilities of the balance of payments. Net foreign direct 
investments, which averaged almost 5% of GDP during 2005-2010, have declined to just over 
2% of GDP in the last two years.  

In this context of wide current account deficit and weaker capital inflows, Tunisia has had to 
increasingly rely on official financial inflows. In 2015, Tunisia also managed to cover part of 
its external financing gap through the issuance in January 2015 of a 10-year, USD 1 billion 
Eurobond  at  5.75%,  which  was  oversubscribed  by  international  investors  despite  not 
including a sovereign guarantee by a foreign donor.  

Official foreign exchange reserves ended 2014 at USD 7.7 billion, or the equivalent of barely 
3  months  of  imports,  which  compares  to  an initial  target  of  USD  9.0  billion  under  the  IMF 
programme. The USD 1 billion international bond issued in January 2015 raised the reserve 
level but, by the end of October, reserves had dropped back to about USD 6.5 billion, or just 
under  4  months  of  imports,  as  tourism  income  fell  in  the  wake  of  the  terrorist  attacks.  The 
reserve level at the end of 2015 is now expected to be USD 7.5 billion. This is well below the 
USD 8.2 billion the IMF had foreseen for the end of the year in the context of the 6th review 
of the programme (completed in September 2015) and compares to a USD 10.1 billion reserve 
target under the original programme. 

External debt increased from 48% of GDP in 2011 to an estimated 56.2% of GDP in 2014, 
and  it  is  expected  to  peak  at  72.3%  of  GDP  in  2018  before  starting  to  reverse  this  trend. 
Tunisia’s sovereign ratings have been downgraded several times since 2011, the last time in 
2014 (from Ba2 to Ba3 by Moody’s and from BB to BB- by Standard & Poor’s. 

Tunisia continues to face significant structural reform challenges. While the country enjoyed 
during 2000-2010 a period of relatively high per-capita economic growth (one of the highest 
among the oil importers in the Middle East and North Africa (MENA) region), it continues to 
suffer from a number of structural deficiencies. In particular, it has an excessive reliance on 
an export-oriented, low-value added industry located near the coastline, which contributes to 
an  unbalanced  pattern  of  regional  economic  development,  and  suffers  from  rigid  labour 
markets and skill mismatches, which  contributes to  high unemployment, particularly among 
the  youth.  Coupled  with  the  perception  of  transparency  and  economic  governance  as  weak, 
the  growth  model  has  resulted  in  an  unfair  distribution  of  economic  gains  among  the 
population.  

Overall,  reform  progress  remains  limited,  in  part  due  to  the  delicate  political  transition, 
although  the  recent  positive  momentum  is  encouraging  and  the  government  remains 
committed to continuing on a positive reform path. The bulk of the groundwork for some key 

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reforms  (notably  on  tax  policy  and  administration,  improvement  of  the  business  and 
investment  climate,  and  the  reform  of  the  financial  sector)  has  been  substantial  and  should 
pave the way for the implementation of deeper reforms. Other reforms will still require further 
intermediate steps, strong political commitment and support to be fully implemented (such as 
price subsidy reform and the improvement of the social safety net). 

On  7  June  2013  the  IMF  Board  approved,  as  noted,  an  USD  1.75  billion  (400%  of  the 
Tunisian  quota),  two-year,  Stand-By  Arrangement  (SBA)  and  which  was  subsequently 
extended until December 2015. Tunisia has requested a successor arrangement with the IMF, 
which is expected to have a 4-year duration and is likely to be supported by an Extended Fund 
Facility (EFF). The programme, which still being negotiated, is expected to be sent for IMF 
Board approval in the spring of 2016. Although its final amount remains to be determined, it 
is expected to be larger than the current SBA. 

The revised projections that were produced in November by the IMF point towards significant 
balance  of  payments  needs  for  the  period  2016-2017,  with  the  total  external  financing  gap 
estimated  at  USD  5.1  billion  (USD  2.7  billion  in  2016  and  USD  2.4  billion  in  2017).  This 
financing  gap  can  broadly  be  attributed  to  three  factors:  a  persistently  large  current  account 
deficit, the need to build up foreign exchange reserves over the period 2016-17, and the large 
debt  amortization  requirements  expected,  especially  for  2017.  The  proposed  new  MFA 
operation of EUR 500 million would cover 19.2% of the estimated residual financing gap. 

Tunisia has also enjoyed the financial support in the past of a number of bilateral donors (in 
particular from the US and Japan, but also from Algeria), as well as from other multilateral 
donors (the World Bank and the African Development Bank in particular) and they are likely 
to  contribute  additional  funds  in  the  coming  period.  Among  the  assistance  provided  by  the 
EU,  the  MFA-I  of  EUR  300  million,  which  is  being  successfully  implemented,  is  strongly 
contributing  towards  the  implementation  of  key  reforms,  and  providing  much  needed 
financial support. 

• 

Existing provisions in the area of the proposal 

Previously,  Decision  No  534/2014/EU    providing  a  first  macro-financial  assistance  to  the 
Republic  of  Tunisia  in  the  amount  of  EUR  300  million  was  adopted  by  the  European 
Parliament and of the Council on 15 May 20141. 

• 

Consistency with the other policies and objectives of the Union 

The  EU  seeks  to  develop  a  close  relationship to  Tunisia  and  to  support  Tunisia’s  economic 
and political reforms. In 1995, Tunisia became the first country in the Southern Mediterranean 
to  sign  an  Association  Agreement  with  the  EU.  This  agreement,  which  came  into  force  in 
1998,  continues  to  be  the  legal  basis  for  bilateral  cooperation.  Bilateral  relations  have  been 
further  reinforced  under  the  EU’s  ENP,  including  through  the  adoption  of  five-year  ENP 
Action Plans establishing strategic objectives for this cooperation, the latest of which covers 
2013-2017. Tunisia is also a member of the Union for the Mediterranean. Economic ties with 
the EU are also important. Tunisia finalized the dismantling of tariffs for industrial products 
in  2008,  thus  becoming  the  first  Mediterranean  country  to  conclude  a  free  trade  agreement 
with the EU. Tunisia is the neighbouring country that conducts the largest share of its trade 
with  the  EU.  In  2014,  the  EU  was  the  source  of  64.7%  of  Tunisia’s  imports  and  the 
destination of 72.5% of its exports. Tunisia has also a high dependence on the EU in terms of 
FDI and other financial flows, remittances and tourism inflows. The EU and Tunisia formally 

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OJ L 151, 21.5.2014, p. 9. 

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started negotiations on a DCFTA in October 2015, with the goal to allowing the full access of 
Tunisia to the EU’s single market.  

The  EU  MFA  would  complement  the  grants  mobilised  under  the  ENI  and  the  Umbrella 
Programme,  and  in  particular  the  conditionalities  envisaged  under  the  PAR-IV  and  PAR-V 
budget  support  packages  being  implemented  by  the  EU.  By  supporting  the  adoption  by  the 
Tunisian  authorities  of  an  appropriate  framework  for  macroeconomic  policy  and  structural 
reforms,  the  EU’s  MFA  would  enhance  the  added  value  of  the  overall  EU  involvement 
increasing the effectiveness of the EU’s overall intervention including through other financial 
instruments. 

Since the Arab Spring, the EU has declared on various occasions its commitment to support 
Tunisia in its economic and political reform process. The EU has doubled its financial support 
in  the  form  of  grants,  making  of  it  the  largest  recipient  of  funding  under  the  SPRING  and 
Umbrella Programmes so far. 

While Tunisia’s road to full democracy is not without difficulties and significant uncertainties 
remain, the country has taken very significant steps towards political reform. There is also a 
strong and intensifying framework of bilateral relations between the EU and Tunisia under the 
Association Agreement, the ENP and other recent initiatives.  

In this context, the Tunisia is deemed to meet the political preconditions for the granting of 
MFA to third countries, notably in terms of respect for democracy, human rights and the rule 
of  law,  and  of  being  a  country  with  which  the  EU  maintains  close  political  and  economic 
relations.  A  detailed  assessment  of  the  satisfaction  of  these  political  criteria  for  MFA 
produced  by  the  European  External  Action  Service  is  annexed  to  the  Commission  Staff 
Working Document accompanying the proposal. And the MFA proposal is consistent with the 
EU's commitment to support Tunisia's economic and political transition.  

2. 

• 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENT  

Consultation of interested parties 

MFA is provided as an integral part of the international support to the economic stabilisation 
of  Tunisia.  In  the  preparation  of  this  proposal  for  MFA,  the  Commission  services  have 
consulted with the International Monetary Fund and the World Bank, which have already put 
in  place  sizeable  financing  programs  and  are  preparing  new  ones.  The  Commission  has 
consulted  the  Economic  and  Financial  Committee  on  10  December  2015,  receiving  an 
endorsement  for  the  proposal.  The  Commission  has  also  been  in  regular  contact  with  the 
Tunisian authorities. 

• 

Collection and use of expertise 

An Operational Assessment verifying the quality and reliability of Tunisia's public financial 
circuits and administrative procedures was carried out by the Commission with the assistance 
of  external  experts  during  the  month  of  December  2013.  Its  results,  which  were  broadly 
positive,  were  shared  with  Tunisian  authorities  and  the  EU  Delegation  in  January  2014  for 
further work on possible areas for improvement. 

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• 

Impact Assessment 

The Union's macro-financial assistance is an exceptional emergency instrument and addresses 
balance-of-payment crises in third countries. Therefore, this MFA proposal is exempted from 
the  requirement  to  carry  out  an  Impact  Assessment  in  accordance  with  the  Commission's 
Better Regulation Guidelines (SWD(2015) 111 final) as there is a political imperative to move 
ahead quickly in this emergency situation requiring a rapid response.  

More generally, the MFA and the economic adjustment and reform programme attached to it 
will  help  alleviate  Tunisia's  short-term  financing  needs  while  supporting  policy  measures 
aimed at strengthening medium-term balance of payments and fiscal sustainability and raising 
sustainable growth, as agreed to be agreed  the IMF in the context of the new programme. It 
will notably help improve the efficiency and transparency of public finance management; and 
promote structural reforms supporting, as ultimate goals, fiscal consolidation and balance of 
payments  adjustment,  as  well  as  productivity  and  employment  growth,  and  promoting 
regulatory harmonisation  and economic  integration with the EU, including in the context of 
the Deep and Comprehensive Free Trade Agreement currently under negotiation. 

3. 

• 

LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

The  European  Union  shall  make  MFA  available  to  Tunisia  for  a  total  maximum  amount  of 
EUR 500 million, provided in the form of a medium term loan. The assistance will contribute 
to  cover  Tunisia's  residual  external  financing  needs  in  2016-17,  as  identified  by  the 
Commission based on the estimates of the IMF.  

The assistance is planned to be disbursed in three loan instalments of EUR 200 million, EUR 
150  million  and  EUR  150  million,  respectively.  The  disbursement  of  the  first  instalment  is 
expected to take place in the middle of 2016. The second instalment, conditional on a number 
of  policy  measures,  could  be  disbursed  in  the  fourth  quarter  of  2016.  The  third  and  last 
instalment  could  be  made  available,  provided  the  policy  measures  are  met,  during  the  first 
half of 2017. The assistance will be managed by the Commission. Specific provisions on the 
prevention  of  fraud  and  other  irregularities,  consistent  with  the  Financial  Regulation,  are 
applicable.  

As  usual  with  the  MFA  instrument,  the  disbursements  would  be  conditional  on  successful 
programme reviews under the new IMF's financial arrangement. In addition, the Commission 
and  the  Tunisian  authorities  would  agree  on  specific  structural  reform  measures  in  a 
Memorandum  of  Understanding.  The  Commission  will  target  structural  reforms  aimed  at 
improving the overall macroeconomic management and the conditions for sustainable growth 
(e.g. targeting the transparency and efficiency of public finance management; fiscal reforms; 
reforms to strengthen the social safety net; labour market reforms; and reforms to improve the 
regulatory  framework  for  trade  and  investment).  These  reform  measures  would  support  the 
authorities’ reform agenda and complement the programmes agreed with the IMF, the World 
Bank and other donors, as well as the policy programmes associated with the EU’s budgetary 
support operations. They would be consistent with the main economic reform priorities agreed 
between the EU and Tunisia in the context of the ENP Joint Action Plan and other strategic 
documents. They will also build upon the structural reforms implemented under MFA-I. 

The decision to disburse the full MFA in the form of loans is justified by Tunisia's level of 
development (as measured by its per-capita income) and debt indicators. It is also consistent 

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with the treatment given to Tunisia by the World Bank and the IMF. Indeed, Tunisia is not 
eligible for concessional financing from either the IDA or the IMF's Extended Credit Facility. 

• 

Legal basis 

The legal basis for this proposal is Article 212 TFEU.  

• 

Subsidiarity principle 

is  respected  as 

The  subsidiarity  principle 
the  objectives  of  restoring  short-term 
macroeconomic  stability  in  Tunisia  cannot  be  sufficiently  achieved  by  the  Member  States 
alone and can be better achieved by the European Union. The main reasons are the budgetary 
constraints faced at the national level and the need for strong donor coordination in order to 
maximise the scale and effectivenes of the assistance.  

• 

Proportionality principle 

The  proposal  complies  with  the  proportionality  principle:  it  confines  itself  to  the  minimum 
required  in  order  to  achieve  the  objectives  of  short-term  macro  economic  stability  and  does 
not go beyond what is necessary for that purpose.  

As  identified  by  the  Commission  based  on  the  estimates  of  the  IMF  in  the  context  of  the 
future EFF Arrangement, the amount of the MFA-II assistance corresponds to 19.2% of the 
residual  financing  gap  for  the  period  2016-2017.  This  is  consistent  with  standard  rules  on 
burden-sharing for MFA operations. Given the assistance pledged to Tunisia by other bilateral 
and multilateral donors and creditors, it is deemed an appropriate level of burden-sharing for 
the  EU.  If  taken  into  account  the  undisbursed  third  tranche  from  MFA-I,  the  total  financial 
assistance  of  MFA-I  and  MFA-II  in  the  period  2016-2017  corresponds  to  23.4%  of  the 
estimated residual financing gap.  

• 

Choice of instruments 

Project  finance  or  technical  assistance  would  not  be  suitable  or  sufficient  to  address  these 
macroeconomic  objectives.  The  key  value  added  of  the  MFA  in  comparison  to  other  EU 
instruments would be to alleviate the external financial constraint and to help create a stable 
macroeconomic  framework,  including  by  promoting  a  sustainable  balance  of  payments  and 
budgetary situation, and an appropriate framework for structural reforms. By helping to put in 
place  an  appropriate  overall  policy  framework,  MFA  can  increase  the  effectiveness  of  the 
actions financed in Tunisia under other, more narrowly focused EU financial instruments.  

4. 

BUDGETARY IMPLICATION 

The  planned  assistance  would  be  provided  in  the  form  of  a  loan  and  should  be  financed 
through  a  borrowing  operation  that  the  Commission  will  conduct  on  behalf  of  the  EU.  The 
budgetary costs of the assistance will correspond to the provisioning, at a rate of 9%, of the 
amounts disbursed in the guarantee fund for external lending of the EU, from budget line 01 
03  06  ("the  provisioning  of  the  Guarantee  Fund").  Assuming  that  the  first  and  second  loan 
disbursements will be made in 2016 for a total amount of EUR 350 million and the third loan 
disbursement  in  2017  for  the  amount  of  EUR  150  million,  and  according  to  the  rules 
governing  the  guarantee  fund  mechanism,  the  provisioning  will  take  place  in  the  2018-19 

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budgets.  Based  on  current  projections  on  the  utilisation  of  the  budget  line  01  03  06,  the 
Commission assesses that the budgetary impact of the operation can be accommodated. 

5. 

• 

OPTIONAL ELEMENTS 

Review/revision/sunset clause 

The proposal includes a sunset clause. The proposed MFA would be made available for two 
and a half years, starting from the first day after the entry into force of the Memorandum of 
Understanding. 

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2016/0039 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

providing further macro-financial assistance to Tunisia 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 

Article 212 thereof, 

Having regard to the proposal from the European Commission2,  

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure3, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Relations  between  the  European  Union  ('the  Union')  and  the  Republic  of  Tunisia 
('Tunisia')  are  developing  within  the  framework  of  the  European  Neighbourhood 
Policy  (ENP).  Tunisia  was  the  first  Mediterranean  country  to  sign  an  Association 
Agreement  with  the  EU  on  17  July  1995,  which  came  into  force  on  1  March  1998. 
Under this Association Agreement, Tunisia finalized dismantling tariffs for industrial 
products  in  2008,  thus  making  Tunisia  the  first  Mediterranean  country  to  enter  in  a 
free trade area with the Union. Bilateral political dialogue and economic cooperation 
have been further developed within the framework of ENP Action Plans, of which the 
most recent covers the period 2013-2017.  

Following  the  revolution  and  the  ousting  of  President  Ben  Ali  on  14  January  2011, 
Tunisia’s  first  free  and  democratic  elections  took  place  on  23  October  2011.  A  new 
constitution was adopted in January 2014, and parliamentary and presidential elections 
took place in the fourth quarter of 2014, with concerted efforts from the main political 
actors to proceed with reforms towards a fully-fledged democratic system. 

In parallel to this political transition process, the Tunisian economy has suffered from 
continuous  domestic  unrest,  regional  instability  (including  the  impact  of  the  Libyan 
conflicts)  and  a  weak  international  environment  (particularly  in  the  Union,  Tunisia’s 
main  trading  partner).  These  unfavourable  developments  substantially  weakened  its 
growth performance, as well as its fiscal and balance of payments positions. 

Since  2011,  following  the  political  changes  in  Tunisia,  the  Union  has  expressed  its 
unequivocal  commitment  to  supporting  Tunisia  in  its  economic  and  political  reform 
process. It has increased its financial support to Tunisia, strengthening its cooperation 
in  many  fields,  including  the  civil  society  the  electoral  system,  security,  regional 
development  and  social  and  economic  reforms.  And  it  has  offered  the  possibility  of 

2 
3 

OJ C […], […], p. […]. 
Position of the European Parliament of …  and Decision of the Council of … . 

EN 

10 

   EN 

                                                 
(5) 

(6) 

(7) 

(8) 

(9) 

concluding  a  Deep  and  Comprehensive  Free  Trade  Area  agreement,  the  negotiations 
of which were launched in October 2014. 

In this difficult economic and financial context, in April 2013, the Tunisian authorities 
and the International Monetary Fund (IMF) agreed on a non-precautionary three-year 
Stand-By-Arrangement of SDR 1,150 million (Special Drawing Rights) in support of 
Tunisia's economic adjustment and reform programme, which was extended until the 
end  of  2015.  In  total,  USD  1.5  billion  has  been  drawn  under  the  IMF  programme 
following six completed programme reviews.   

In August 2013, Tunisia requested complementary macro-financial assistance from the 
Union.  In  response,  macro-financial  assistance  of  EUR  300  million  in  the  form  of 
loans  was  adopted  in  May  2014  (MFA-I)4
  .  The  Memorandum  of  Understanding 
defining the policy conditions related to MFA-I entered into force on 4 March 2015. 
Following implementation of the agreed policy measures, the first tranche of MFA-I 
was disbursed on 7 May 2015 and the second tranche was disbursed on 1 December 
2015. 

The Union has made EUR 524 million available in grants for the period 2011-15 under 
its  regular  cooperation  programme  in  support  of  Tunisia's  economic  and  political 
reform  agenda.  In  addition,  EUR  155  million has been allocated  to Tunisia in 2011-
2013  under  the  "Support  for  partnership,  reforms  and  inclusive  growth"  (SPRING) 
programme  and  EUR  122  million  in  2014-2015  under  the  "Umbrella"  programme. 
Moreover, the European Investment Bank has provided  loans in the amount of  EUR 
1.338 million since 2011.  

In  2015,  the  Tunisia's  economy  has  been  significantly  affected  by  several  terrorist 
attacks that have targeted key economic industries like tourism and transport, as well 
as  aiming  to  disrupt  the  consolidation  of  its  political  transition.  These  attacks  have 
weighted  on  the  economic  recovery  Tunisia  was  beginning  to  experience.  Together 
with persistent regional instability (including the reactivation of the Libyan conflict), 
and  still  weak  European  and  global  economic  environment,  these  events  have 
exacerbated Tunisia’s already weak balance of payments and fiscal positions. This has 
resulted in important external and budgetary financial gaps. 

In  this  challenging  context,  the  Union  has  reaffirmed  its  commitment  to  supporting 
Tunisia  in  its  economic  and  political  reform  process.  In  particular,  this  commitment 
was expressed in the conclusions of the meeting of the Association Council between 
the  Union  and  Tunisia  in  March  2015,  as  well  as  following  the  June  2015  terrorist 
attack in Sousse, in the Council conclusions of 20 July 2015. Political and economic 
support  from  the  Union  to  Tunisia's  reform  process  is  consistent  with  the  Union's 
policy  towards  the  Southern  Mediterranean  region,  as  set  out  in  the  context  of  the 
ENP. 

(10)  Following the deterioration in Tunisia’s economic and financial situation, the IMF and 
Tunisia have started discussions on a successor arrangement of a larger amount, which 
could take the form of an Extended Financing Facility ('IMF programme') and would 
likely  cover  a  period  of  four  years,  starting  in  the  Spring  of  2016.  The  new  IMF 
programme  would  aim  at  alleviating  Tunisia’s  short-term  balance  of  payment 
difficulties while encouraging the implementation of strong adjustment measures. 

4 

Decision No 534/2014/EU of 15 May 2014 of the European Parliament and of the Council of 15 May 
2014 providing macro-financial assistance to the Republic of Tunisia (OJ L 151, 21.5.2014, p. 9). 

EN 

11 

   EN 

                                                 
(11) 

In  August  2015,  in  view  of  the  worsening  economic  situation  and  outlook,  Tunisia 
requested additional macro-financial assistance from the Union. 

(12)  Given  that  Tunisia  is  a  country  covered  by  the  ENP,  it  should  be  considered  to  be 

eligible to receive macro-financial assistance from the Union. 

(13)  The Union’s macro-financial assistance should be an exceptional financial instrument 
of untied and undesignated balance-of-payments support, which aims at addressing the 
beneficiary’s 
the 
implementation  of  a  policy  programme  containing  strong  immediate  adjustment  and 
structural  reform  measures  designed  to  improve  the  balance-of-payments  position  in 
the short term. 

immediate  external  financing  needs  and  should  underpin 

(14)  Given  that  there  is  still  a  significant  residual  external  financing  gap  in  Tunisia's 
balance  of  payments  over  and  above  the  resources  provided  by  IMF  and  other 
multilateral  institutions,  the  Union  macro-financial  assistance  to  be  provided  to 
Tunisia  is,  under  the  current  exceptional  circumstances,  considered  to  be  an 
appropriate response to Tunisia's request for support to the economic stabilisation, in 
conjunction with the IMF programme. The Union's macro-financial assistance would 
support  the  economic  stabilisation  and  the  structural  reform  agenda  of  Tunisia, 
supplementing resources made available under the IMF's financial arrangement. 

(15)  The  Union's  macro-financial  assistance  should  aim  to  support  the  restoration  of  a 
sustainable  external  financing  situation  for  Tunisia  thereby  supporting  its  economic 
and social development. 

(16)  The determination of the amount of the Union's macro-financial assistance is based on 
a complete quantitative assessment of Tunisia's residual external financing needs, and 
takes into account its capacity to finance itself with its own resources, in particular the 
international  reserves  at  its  disposal.  The  Union's  macro-financial  assistance  should 
complement the programmes and resources provided by the IMF and the World Bank. 
The  determination  of  the  amount  of  the  assistance  also  takes  into  account  expected 
financial  contributions  from  multilateral  donors  and  the  need  to  ensure  fair  burden 
sharing between the Union and other donors, as well as the pre-existing deployment of 
the Union's other external financing instruments in Tunisia and the added value of the 
overall Union involvement.   

(17)  The Commission should ensure that the Union's macro-financial assistance is legally 
and substantially in line with the key principles, objectives and measures taken within 
the different areas of external action and other relevant Union policies. 

(18)  The  Union's  macro-financial  assistance  should  support  the  Union's  external  policy 
towards  Tunisia.  Commission  services  and  the  European  External  Action  Service 
should  work  closely  together  throughout  the  macro-financial  assistance  operation  in 
order to coordinate, and to ensure the consistency of, Union external policy. 

(19)  The Union's macro-financial assistance should support Tunisia's commitment to values 
shared with the Union, including democracy, the rule of law, good governance, respect 
for  human  rights,  sustainable  development  and  poverty  reduction,  as  well  as  its 
commitment to the principles of open, rule-based and fair trade. 

(20)  A  pre-condition  for  granting  the  Union's  macro-financial  assistance  should  be  that 
Tunisia  respects  effective  democratic  mechanisms  – 
including  a  multi-party 
parliamentary system – and the rule of law, and guarantees respect for human rights. 
In  addition,  the  specific  objectives  of  the  Union's  macro-financial  assistance  should 
strengthen  the  efficiency,  transparency  and  accountability  of  the  public  finance 

EN 

12 

   EN 

management systems in Tunisia and to promote structural reforms aimed at supporting 
sustainable and inclusive growth, employment creation and fiscal consolidation. Both 
fulfilment  of  the  preconditions  and  the  achievement  of  those  objectives  should  be 
regularly monitored by the Commission and the European External Action Service. 

(21) 

In  order  to  ensure  that  the  Union’s  financial  interests  linked  to  the  Union’s  macro-
financial assistance are protected efficiently, Tunisia should take appropriate measures 
relating  to  the  prevention  of,  and  fight  against,  fraud,  corruption  and  any  other 
irregularities  linked  to  the  assistance.  In  addition,  provision  should  be  made  for  the 
Commission to carry out checks and for the Court of Auditors to carry out audits. 

(22)  Release of the Union's macro-financial assistance is without prejudice to the powers of 

the European Parliament and the Council (as budgetary authority).  

(23)  The  amounts  of  the  provision  required  for  macro-financial  assistance  should  be 
consistent with the budgetary appropriations provided for in the multi-annual financial 
framework. 

(24)  The  Union's  macro-financial  assistance  should  be  managed  by  the  Commission.  In 
order  to  ensure  that  the  European  Parliament  and  the  Council  are  able  to  follow  the 
implementation  of  this  Decision,  the  Commission  should  regularly  inform  them  of 
developments relating to the assistance and provide them with relevant documents. 

(25) 

In  order  to  ensure  uniform  conditions  for  the  implementation  of  this  Decision, 
implementing powers should be conferred on the Commission. Those powers should 
be  exercised  in  accordance  with  Regulation  (EU)  No 182/2011  of  the  European 
Parliament and of the Council5. 

(26)  The  Union's  macro-financial  assistance  should  be  subject  to  economic  policy 
conditions,  to  be  laid  down  in  a  Memorandum  of  Understanding.  In  order  to  ensure 
uniform conditions of implementation and for reasons of efficiency, the Commission 
should be empowered to negotiate such conditions with the Tunisian authorities under 
the  supervision  of  the  committee  of  representatives  of  the  Member  States  in 
accordance  with  Regulation  (EU)  No 182/2011.  Under  that  Regulation,  the  advisory 
procedure should, as a general rule, apply in all cases other than as provided for in that 
Regulation.  Considering  the  potentially  important  impact  of  assistance  of  more  than 
EUR  90  million,  it  is  appropriate  that  the  examination  procedure  be  used  for 
operations  above  that  threshold.  Considering  the  amount  of  the  Union's  macro-
financial assistance to Tunisia, the examination procedure should apply to the adoption 
of  the  Memorandum  of  Understanding,  and  to  any  reduction,  suspension  or 
cancellation of the assistance, 

HAVE ADOPTED THIS DECISION: 

1. 

5 

Article 1 

The Union shall make macro-financial assistance of a maximum amount of EUR 500 
million available to Tunisia ("the Union's macro-financial assistance"), with a view 
to supporting Tunisia's economic stabilisation and a substantive reform agenda. The 
assistance  shall  contribute  to  covering  Tunisia's  balance  of  payments  needs  as 
identified in the IMF programme.  

Regulation  (EU)  No 182/2011  of  the  European  Parliament  and  of  the  Council  of  16 February  2011 
laying down the rules and general principles concerning mechanisms for control by Member States of 
the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13). 

EN 

13 

   EN 

                                                 
2. 

3. 

4. 

5. 

1. 

2. 

3. 

1. 

The  full  amount  of  the  Union's  macro-financial  assistance  shall  be  provided  to 
Tunisia in the form of loans. The Commission shall be empowered on behalf of the 
Union  to  borrow  the  necessary  funds  on  the  capital  markets  or  from  financial 
institutions and to on-lend them to Tunisia. The loans shall have a maximum average 
maturity of 15 years. 

The  release  of  the  Union's  macro-financial  assistance  shall  be  managed  by  the 
Commission in a manner consistent with the agreements or understandings reached 
between  the  International  Monetary  Fund  (IMF)  and  Tunisia,  and  with  the  key 
principles and objectives of economic reforms set out in the EU-Tunisia Association 
Agreement  agreed  under 
the  European  Neighbourhood  Policy  (ENP).  The 
Commission  shall  regularly  inform  the  European  Parliament  and  the  Council  of 
developments 
including 
disbursements  thereof,  and  shall  provide  those  institutions  with  the  relevant 
documents in due time. 

the  Union's  macro-financial  assistance, 

regarding 

The Union's  macro-financial assistance shall be made available for a  period  of two 
and  a  half  years,  starting  from  the  first  day  after  the  entry  into  force  of  the 
Memorandum of Understanding referred to in Article 3(1). 

Where  the  financing  needs  of  Tunisia  decrease  fundamentally  during  the  period  of 
the  disbursement  of  the  Union's  macro-financial  assistance  compared  to  the  initial 
projections,  the  Commission,  acting  in  accordance  with  the  examination  procedure 
referred  to  in  Article 7(2),  shall  reduce  the  amount  of  the  assistance  or  suspend  or 
cancel it. 

Article 2 

A  pre-condition  for  granting  the  Union's  macro-financial  assistance  shall  be  that 
Tunisia  respects  effective  democratic  mechanisms  –  including  a  multi-party 
parliamentary system – and the rule of law, and guarantees respect for human rights. 

The  Commission  and  the  European  External  Action  Service  shall  monitor  the 
fulfilment  of  this  pre-condition  throughout  the  life-cycle  of  the  Union's  macro-
financial assistance.  

Paragraphs  1  and  2  of  his  Article  shall  be  applied  in  accordance  with  Council 
Decision 2010/427/EU6. 

Article 3 

The  Commission,  in  accordance  with  the  examination  procedure  referred  to  in 
Article 7(2),  shall  agree  with  the  Tunisian  authorities  on  clearly  defined  economic 
policy  and  financial  conditions,  focusing  on  structural  reforms  and  sound  public 
finances, to which the Union's macro-financial assistance is to be subject, to be laid 
down in a Memorandum of Understanding ("the Memorandum of Understanding"). 
The  economic  policy  and  financial  conditions  set  out  in  the  Memorandum  of 
Understanding shall be consistent with the agreements or understandings referred to 
in  Article 1(3),  including  the  macroeconomic  adjustment  and  structural  reform 
programmes implemented by Tunisia with the support of the IMF.  

6 

Council  Decision  2010/427/EU  of  26 July  2010  establishing  the  organisation  and  functioning  of  the 
European External Action Service (OJ L 201, 3.8.2010, p. 30). 

EN 

14 

   EN 

                                                 
2. 

3. 

4. 

1. 

2. 

3. 

4. 

5. 

7 

The  conditions  referred  to  in  paragraph  1  shall  aim,  in  particular,  at  enhancing  the 
efficiency,  transparency  and  accountability  of  the  public  finance  management 
systems  in  Tunisia,  including  for the  use of  the  Union's  macro-financial assistance. 
Progress  in  mutual  market  opening,  the  development  of  rules-based  and  fair  trade 
and  other  priorities  in  the  context  of  the  Union's  external  policy  shall  also  be  duly 
taken into account when designing the policy measures. Progress in attaining those 
objectives shall be regularly monitored by the Commission. 

The  detailed  financial  terms  of  the  Union's  macro-financial  assistance  shall  be  laid 
down  in  a  Loan  Agreement  to  be  concluded  between  the  Commission  and  the 
Tunisian authorities.  

The  Commission  shall  verify  at  regular  intervals  that  the  conditions  referred  to  in 
Article 4(3) continue to be met, including whether the economic policies of Tunisia 
are in accordance with the objectives of the Union's macro-financial assistance. In so 
doing, the Commission shall coordinate closely with the IMF and the World Bank, 
and, where necessary, with the European Parliament and the Council. 

Article 4 

Subject to the conditions in paragraph 3, the Union's macro-financial assistance shall 
be  made  available  by  the  Commission  in  three  loan  instalments.  The  size  of  each 
instalment  shall  be  laid  down  in  the  Memorandum  of  Understanding  referred  to  in 
Article 3.  

The  amounts  of  the  Union's  macro-financial  assistance  shall  be  provisioned,  where 
required, in accordance with Council Regulation (EC, Euratom) No 480/20097.  

The  Commission  shall  decide  on  the  release  of  the  instalments  subject  to  the 
fulfilment of all of the following conditions: 

(a) 

(b) 

the pre-condition set out in Article 2; 

a  continuous  satisfactory  track  record  of  implementing  a  policy  programme 
that contains strong adjustment and structural reform measures supported by a 
non-precautionary IMF credit arrangement; and 

(c) 

the  satisfactory  implementation  of  the  economic  policy  and  financial 
conditions agreed in the Memorandum of Understanding. 

The  release  of  the  second  instalment  shall  not,  in  principle,  take  place  earlier  than 
three  months  after  the  release  of  the  first  instalment.  The  release  of  the  third 
instalment shall not, in principle, take place earlier than three months after the release 
of the second instalment.  

Where the conditions in paragraph 3 are continuously not met, the Commission shall 
temporarily  suspend  or  cancel  the  disbursement  of  the  Union's  macro-financial 
assistance. In such cases, it shall inform the European Parliament and the Council of 
the reasons for that suspension or cancellation.  

The  Union's  macro-financial  assistance  shall  be  disbursed  to  the  Central  Bank  of 
Tunisia.  Subject 
the  Memorandum  of 
Understanding,  including  a  confirmation  of  residual  budgetary  financing  needs,  the 

the  provisions 

to  be  agreed 

in 

to 

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

EN 

15 

   EN 

                                                 
Union  funds  may  be  transferred  to  the  Tunisian  Ministry  of  Finance  as  the  final 
beneficiary.  

Article 5 

The  borrowing  and  lending  operations  related  to  the  Union's  macro-financial 
assistance shall be carried out in euro using the same value date and shall not involve 
the Union in the transformation of maturities, or expose it to any exchange or interest 
rate risk, or to any other commercial risk. 

Where  the  circumstances  permit,  and  if  Tunisia  so  requests,  the  Commission  may 
take the steps necessary to ensure that an early repayment clause is included in the 
loan  terms  and  conditions  and  that  it  is  matched  by  a  corresponding  clause  in  the 
terms and conditions of the borrowing operations.  

Where  circumstances  permit  an  improvement  of  the  interest  rate  of  the  loan  and  if 
Tunisia so requests, the Commission may decide to refinance all or part of its initial 
borrowings or may restructure the corresponding financial conditions. Refinancing or 
restructuring operations shall be carried out in accordance with paragraphs 1 and 4 
and shall not have the effect of extending the maturity of the borrowings concerned 
or  of  increasing  the  amount  of  capital  outstanding  at  the  date  of  the  refinancing  or 
restructuring. 

All costs incurred by the Union which relate to the borrowing and lending operations 
under this Decision shall be borne by Tunisia. 

The  Commission  shall  inform  the  European  Parliament  and  the  Council  of 
developments in the operations referred to in paragraphs 2 and 3. 

Article 6 

The  Union's  macro-financial  assistance  shall  be  implemented  in  accordance  with 
Regulation  (EU,  Euratom)  No 966/2012  of  the  European  Parliament  and  of  the 
Council8 and Commission Delegated Regulation (EU) No 1268/20129. 

The  implementation  of  the  Union's  macro-financial  assistance  shall  be  under  direct 
management.  

The  Loan  Agreement  to  be  agreed  with  the  Tunisian  authorities  shall  contain 
provisions:  

(a) 

(b) 

ensuring that Tunisia regularly checks that financing provided from the budget 
of  the  Union  has  been  properly  used,  takes  appropriate  measures  to  prevent 
irregularities  and  fraud,  and,  if  necessary,  takes  legal  action  to  recover  any 
funds provided under this Decision that have been misappropriated; 

ensuring  the  protection  of  the  Union's  financial  interests,  in  particular 
providing  for  specific  measures  in  relation  to  the  prevention  of,  and  fight 
against,  fraud,  corruption  and  any  other  irregularities  affecting  the  Union's 
in  accordance  with  Council  Regulation 
macro-financial  assistance, 

Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 
2012  on  the  financial  rules  applicable  to  the  general  budget  of  the  Union  and  repealing  Council 
Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1). 
Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application 
of Regulation (EU, Euratom) No 966/2012 on the financial rules applicable to the general budget of the 
Union (OJ L 362, 31.12.2012, p. 1). 

1. 

2. 

3. 

4. 

5. 

1. 

2. 

3. 

8 

9 

EN 

16 

   EN 

                                                 
(c) 

(d) 

(e) 

(EC,Euratom) No 2988/9510, Council Regulation (EC, Euratom) No 2185/9611 
and Regulation (EU, Euratom) No 883/2013 of the European Parliament and of 
the Council12;  

expressly  authorising  the  Commission,  including  the  European  Anti-Fraud 
Office, or its representatives to carry out checks, including on-the-spot checks 
and inspections;  

expressly  authorising  the  Commission  and  the  Court  of  Auditors  to  perform 
audits  during  and  after  the  availability  period  of  the  Union's  macro-financial 
assistance,  including  document  audits  and  on-the-spot  audits,  such  as 
operational assessments; 

ensuring that the Union is entitled to early repayment of the loan where it has 
been  established  that,  in  relation  to  the  management  of  the  Union's  macro-
financial  assistance,  Tunisia  has  engaged  in  any  act  of  fraud  or  corruption  or 
any other illegal activity detrimental to the financial interests of the Union. 

the 

implementation  of 

the 
Before 
Commission  shall  assess,  by  means  of  an  operational  assessment,  the  soundness  of 
Tunisia's financial arrangements, the administrative procedures, and the internal and 
external control mechanisms which are relevant to the assistance. 

the  Union's  macro-financial  assistance, 

Article 7 

The  Commission  shall  be  assisted  by  a  committee.  That  committee  shall  be  a 
committee within the meaning of Regulation (EU) No 182/2011. 

Where  reference  is  made  to  this  paragraph,  Article  5  of  Regulation  (EU)  No 
182/2011 shall apply. 

Article 8 

By  30 June  of  each  year,  the  Commission  shall  submit  to  the  European  Parliament 
and to the Council a report on the implementation of this Decision in the preceding 
year, including an evaluation of that implementation. The report shall: 

(a) 

(b) 

(c) 

examine  the  progress  made  in  implementing  the  Union's  macro-financial 
assistance; 

assess  the  economic  situation  and  prospects  of  Tunisia,  as  well  as  progress 
made in implementing the policy measures referred to in Article 3(1); 

indicate the connection between the economic policy conditions laid  down in 
the  Memorandum  of  Understanding,  Tunisia’s  on-going  economic  and  fiscal 
performance and the Commission’s decisions to release the instalments of the 
Union's macro-financial assistance. 

Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European 
Communities financial interests (OJ L 312, 23.12.1995, p. 1). 
Council  Regulation  (EC,  Euratom)  No 2185/96  of  11 November  1996  concerning  on-the-spot  checks 
and inspections carried out by the Commission to protect the Communities' financial interests against 
fraud and other irregularities (OJ L 292, 15.11.1996, p. 2). 
Regulation  (EU,  Euratom)  No 883/2013  of  the  European  Parliament  and  of  the  Council  of 
11 September  2013  concerning  investigations  conducted  by  the  European  Anti-Fraud  Office  (OLAF) 
and  repealing  Regulation  (EC)  No 1073/1999  of  the  European  Parliament  and  of  the  Council  and 
Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1). 

4. 

1. 

2. 

1. 

10 

11 

12 

EN 

17 

   EN 

                                                 
2. 

Not  later  than  two  years  after  the  expiry  of  the  availability  period  referred  to  in 
Article 1(4),  the  Commission  shall  submit  to  the  European  Parliament  and  to  the 
Council  an  ex-post  evaluation  report,  assessing  the  results  and  efficiency  of  the 
completed  Union's  macro-financial  assistance  and  the  extent  to  which  it  has 
contributed to the aims of the assistance. 

Article 9 

This  Decision  shall  enter  into  force  on  the  third  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1.  Title of the proposal/initiative  

1.2.  Policy area(s) concerned in the ABM/ABB structure 

1.3.  Nature of the proposal/initiative  

1.4.  Objectives  

1.5.  Grounds for the proposal/initiative  

1.6.  Duration and financial impact  

1.7.  Management mode(s) envisaged  

2. 

MANAGEMENT MEASURES 

2.1.  Monitoring and reporting rules  

2.2.  Management and control system  

2.3.  Measures to prevent fraud and irregularities  

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1.  Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

3.2.  Estimated impact on expenditure  

3.3.  Estimated impact on revenue

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Decision providing further Macro-financial assistance to the Republic of Tunisia  
Policy area(s) concerned in the ABM/ABB structure13  

1.2. 

Policy area:  Title 01 – Economic and Financial Affairs 

Activity: 

03 – International economic and financial affairs 

1.3. 

Nature of the proposal/initiative  

X The proposal/initiative relates to a new action  

1.4. 

Objectives 

1.4.1.  The Commission's multiannual strategic objective(s) targeted by the proposal/initiative  

"To promote prosperity beyond the EU" 

The major area of DG ECFIN related activity pertains to:  

1.  Fostering  the  implementation  of  the  European  Neighbourhood  Policy  by  deepening 
economic analysis and strengthening policy dialogue and advice on the economic aspects 
of the Action Plans. 

2.  Developing,  monitoring  and  implementing  macro-financial  assistance  for  partner  third 
countries, in co-operation with the relevant international financial institutions.  

1.4.2. 

Specific objective(s) and ABM/ABB activity(ies) concerned 

Specific  objective  No  1:  "Providing  macro-financial  assistance  to  third  countries  in 
resolving their balance of payment crises and restoring external debt sustainability" 

ABM/ABB  activity(ies)  concerned:  International  Economic  and  Financial  Relations, 
global governance.  

1.4.3.  Expected result(s) and impact 

The  proposed  assistance  consists  of  an  EU  loan  of  EUR  500  million  to  the  Republic  of 
Tunisia ('Tunisia'), with a view to contributing to a more sustainable balance of payments 
situation.  The  assistance,  to  be  disbursed  in  three  instalments,  should  help  the  country 
overcome  its  difficult  economic  and  balance  of  payments  situation  it  is  experiencing, 
which  has  been  exacerbated  by  the  terrorist  attacks  it  suffered  in  2015  and  by  persistent 
domestic  and  regional  unrest.  It  will  also  promote  structural  reforms  aimed  at  raising 
sustainable economic growth and improving public finance management.  

1.4.4. 

Indicators of results and impact  

The authorities will be required to report on a set of indicators to the Commission services 
on a regular basis and provide a comprehensive report on the compliance with the agreed 
policy  conditions  ahead  of  the  disbursement  of  the  second  and  third  instalments  of  the 
assistance.  

13 

ABM: Activity-Based Management – ABB: Activity-Based Budgeting. 

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The Commission services will continue to monitor public finance management, following 
the  operational  assessment  of  the  financial  circuits  and  administrative  procedures  in 
Tunisia  that  will  be  carried  out  in  preparation  of  this  operation.  The  EU  Delegation  in 
Tunisia  will  also  provide  regular  reporting  on  issues  relevant  for  the  monitoring  of  the 
assistance.  The  Commission  services  will  remain  in  close  contact  with  the  IMF  and  the 
World Bank to benefit from their insights from their on-going activities in Tunisia.  

An  annual  report  to  the  Council  and  European  Parliament  is  foreseen  in  the  proposed 
legislative decision, comprising an assessment of the implementation of this operation. An 
independent ex-post evaluation of the assistance will be carried out within two years after 
the expiry of the implementation period. 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term  

The disbursement of the assistance will be conditional upon a satisfactory track record in 
the  implementation  of  the  future  economic  programme  between  Tunisia  and  the  IMF, 
which is expected to be in place by March 2016. In addition, the Commission shall agree 
with  the  Tunisian  authorities  on  specific  policy  conditions,  listed  in  a  Memorandum  of 
Understanding,  to  be  met  before  the  second  and  third  instalments  are  released  by  the 
Commission.  

1.5.2.  Added value of EU involvement 

By helping the country overcome the economic shock caused by the 2015 terrorist attacks, 
and  by  the  domestic  and  regional  unrest,  the  proposed  MFA  will  contribute  to  promote 
macroeconomic stability and, economic reforms, while supporting the consolidation of the 
country’s  political  transition.  By  complementing  the  resources  made  available  by  the 
international financial institutions, the EU and other donors, it will contribute to the overall 
effectiveness  of  the  package  of  financial  support  provided  by  the  international  donor 
community.  

The  proposed  programme  will  also  strengthen  the  government's  reform  commitment  and 
its aspiration towards closer relations with the EU. This result will be achieved, inter alia, 
through  appropriate  conditionality  for  the  disbursement  of  the  assistance.  In  a  larger 
context,  the  programme  will  signal  to  the  other  countries  in  the  region  that  the  EU 
continues  to  to  support  countries  embarking  on  a  clear  path  towards  political  reforms  in 
times of economic difficulties. 

1.5.3.  Lessons learned from similar experiences in the past 

Since 2004, a total of sixteen ex-post evaluations have been carried out on macro-financial 
assistance  operations.  These  evaluations  conclude  that  MFA  operations  do  contribute, 
albeit  sometimes  modestly  and 
the  external 
sustainability, the macroeconomic stability and the achievement of structural reforms in the 
recipient country. In most cases, MFA operations had a positive effect on the balance of 
payments of the beneficiary country and helped to relax their budgetary constraints. They 
also led to a somewhat higher economic growth. 

improvement  of 

indirectly, 

the 

to 

1.5.4.  Compatibility and possible synergy with other appropriate instruments 

The  EU  is  among  the  major  donors  of  Tunisia.  Financial  assistance  provided  under  the 
the  European 
European  Neighbourhood 
Neighbourhood  Partnership  Instrument  (ENPI),  amounted  to  EUR  801  million  for  the 
period  2011-2015,  which  includes  EUR  277  million  under  the  SPRING  and  Umbrella 

(ENI),  and  earlier  under 

Instrument 

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funds  (EUR  155  million  and  EUR  122  million,  respectively).  These  funds  were 
complemented by financing from other EU instruments such as the Instrument for Stability 
(IfS),  the  European  Instrument  for  Democracy  and  Human  Rights  (EIDHR),  the 
Neighbourhood  Investment  Facility  (NIF)  and 
the 
Development and Cooperation Instrument (DCI). The European Investment Bank has also 
provided loans in the amount of EUR 1.338 million since 2011, of which EUR 200 million 
in  2015.  Lastly,  the  MFA-I  of  EUR  300  million  approved  in  2014  is  being  satisfactorily 
implemented, and only the last tranche of EUR 100 million remains to be disbursed. 

thematic  programmes  under 

The key value added of the MFA in comparison to other EU instruments would be to help 
create  a  stable  macroeconomic  framework,  including  by  promoting  a  sustainable  balance 
of payments and budgetary situation, and an appropriate framework for structural reforms. 
MFA  does  not  provide  a  regular  financial  support  nor  is  meant  to  support  the  economic 
and  social  development  of  the  recipient  countries.  It  is  to  be  discontinued  as  soon  as  the 
country's  external  financial  situation  has  been  brought  back  into  a  sustainable  path. 
Afterwards, regular EU cooperation assistance instruments are meant to take over. 

MFA  is  also  meant  to  be  complementary  to  interventions  by  the  international  financial 
institutions,  in  particular  the  adjustment  and  reform  programme  supported  by  the  IMF's 
EFF and the Development Policy Loans of the World Bank. 

1.6. 

Duration and financial impact  

X Proposal/initiative of limited duration  

X Proposal/initiative in effect for 2.5 years from the entry into force of the Memorandum 
of Understanding, as stated in Article (1.4) of the Decision  

X The financial impact is expected to occur from 2016 to 2019  

1.7.  Management mode(s) envisaged14  

X Centralised direct management by the Commission  

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

This  assistance  is  of  macroeconomic  nature  and  its  design  is  consistent  with  the  future 
IMF-supported  economic  programme.  The  monitoring  of  the  action  by  the  Commission 
services  will  take  place  on  the  basis  of  progress  in  the  implementation  of  the  IMF 
programme  and  specific  reform  measures  to  be  agreed  with  the  Tunisian  authorities  in  a 
Memorandum of Understanding (see also point 1.4.4).  

2.2.  Management and control system  

2.2.1.  Risk(s) identified  

There are fiduciary, policy and political risks related to the proposed MFA operation.  

There  is  a  risk  that  the  macro-financial  assistance,  which  is  not  dedicated  to  specific 
expenses, could be used in a fraudulent way. In general terms, this risk is related to factors 
such as the quality of management systems in the central bank and the ministry of finance 
and the appropriatedness of internal and external audit capabilities.  

14 

Details of management modes and references to the Financial Regulation may be found on the BudgWeb site: 
http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html 

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Another key risk to the operation stems from the domestic security situation, in particular 
related to possible terrorist attacks, which could further destabilise key economic sectors, 
weaken  the  authorities'  political  determination  to  implement  the  necessary  economic 
reforms  and  fuel  social  unrest.  A  derailment  of  the  adjustment  process  could  put  the 
objectives  of  the  IMF-supported  programme  in  jeopardy,  endanger  macroeconomic 
stability  and  prevent  the  effective  disbursement  of  MFA-II.  There  are  also  considerable 
risks from the regional political situation conflict, notably the conflict in Libya, which is 
having a negative impact on Tunisia's economic and social situation, including through the 
flow of Libyan refugees. 

Finally,  there  are  risks  stemming  from  a  possible  weakening  of  the  European  and  global 
economic  environment  (given  Tunisia’s  high  dependence  on  the  EU  market)  and  an 
increase in international energy and food prices, which would have an important effect on 
Tunisia’s fiscal and balance of payments situation. 

2.2.2.  Control method(s) envisaged  

The  macro-financial  assistance  will  be  liable  to  verification,  control  and  auditing 
procedures under the responsibility of the Commission, including the European Antifraud 
Office (OLAF), and by the European Court of Auditors.  

2.2.3.  Costs and benefits of controls and probable non-compliance rate 

The basic costs for the Commission related to the methods of verification and control are 
described  in  Table  3.2.1.  In  addition,  there  are  costs  for  the  European  Court  of  Auditors 
and of possible interventions of the OLAF. The Operational Assessment, conducted by the 
Commission services in 2014, not only helps assess risks of misuse of the funds but, as a 
collateral  benefit,  it  provides  useful  information  on  the  necessary  reforms  in  the  area  of 
public finance management, which can then be reflected in the policy conditionality of the 
operation. Regarding the probable non-compliance rate, the risk of non-compliance (in the 
form of non-repayment of the loan or misuse of the funds) is judged to be low, based on 
the experience with the MFA instrument since its creation.  

2.3.  Measures to prevent fraud and irregularities  

To mitigate the risks of fraudulent use several measures will be taken:  

First, the Memorandum of Understanding and the Loan Agreement will comprise a set of 
provisions on inspection, fraud prevention, audits, and recovery of funds in case of fraud or 
corruption. Also, the assistance will be paid to a dedicated account of the Central Bank of 
Tunisia.  

Moreover, the Commission services have conducted, in January 2014, with the support of 
external  consultants,  an  Operational  Assessment,  in  order  to  assess  the  reliability  of 
financial circuits and administrative procedures that are relevant to this type of assistance. 
This assessment determined that the framework for sound financial management of macro-
financial assistance is sufficiently effective in Tunisia. The Commission has reflected some 
of  the  recommendations  of  the  Operational  Assessment    in  the  conditionality  of  public 
finance management reform included in the MFA I programme and intends to also do so in 
the conditionality related to the new proposed MFA. The Commission is also using other 
budget  support  operations  to  help  the  Tunisian  authorities  improve  their  public  finance 
management systems, and these efforts are also being supported by other other donors.  

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Finally, the assistance will be liable to verification, control and auditing procedures under 
the  responsibility  of  the  Commission,  including  the  European  Antifraud  Office  (OLAF) 
and the European Court of Auditors. 

3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 
affected  

•  Existing budget lines 

01 03 02: Macro-financial assistance 

01 04 01 14 – Provisioning of the Guarantee Fund 

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure 

Contribution  

Heading of 
multiannual 
financial 
framework 

4 

4 

Number  
[Description………
………...……….] 

01 03 02 

Macro-financial 
assistance 

01 04 01 14  

Provisioning of 
the Guarantee 
Fund 

Diff./non-diff.
(15) 

from EFTA 
countries16 

from 
candidate 
countries17 

from third 
countries 

within the 
meaning of 
Article 
18(1)(aa) of 
the Financial 
Regulation  

Diff. 

NO 

NO 

NO 

NO 

Diff. 

NO 

NO 

NO 

NO 

01 04 01 04 – European Union guarantee for EU loans raised for macro-financial assistance to third 
countries:  The  Guarantee  Fund  for  external  actions  has  to  be  provisioned  according  to  the  Fund 
Regulation, as amended. In line with this Regulation, loans are based on the outstanding amount at 
the end of a year. The Guarantee Fund must be provisioned, using the funds under budget line 01 04 
01 14 (“provisioning of the Guarantee Fund"), at a rate of 9% of the total outstanding liabilities. The 
provisioning  amount  is  calculated  at  the  beginning  of  the  year  "n"  as  the  difference  between  the 
target amount and the Fund's net assets at the end of the  year  "n-1". This provisioning amount is 
introduced in the year "n" to the "n+1" preliminary budget and effectively paid in one transaction at 
the beginning of the year "n+1" from "the provisioning of the Guarantee Fund" (budget line 01 04 
01 14). As a result, 9% (maximum of EUR 45 million) of the effectively disbursed amount will be 
considered in the target amount at the end of the year "n-1" for the calculation of the provisioning of 
the Fund.  

15 
16 
17 

Diff. = Differentiated appropriations / Non-Diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidate countries from the Western Balkans. 

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The budget entry ("p.m.") reflecting the budget guarantee for the loan will be activated only in the 
case of an effective call on the guarantee. It is not expected that the budget guarantee be called. 

(cid:133)(cid:133)New budget lines requested: not applicable. 

3.2. 

Estimated impact on expenditure  

3.2.1. 

Summary of estimated impact on expenditure  

Heading of multiannual financial 
framework: 

4 

DG: ECFIN 

(cid:121) Operational appropriations  

EUR million (to three decimal places) 

Year 
201618 

Year 
2017 

Year 
2018 

Year 
2019 

TOTAL 

Budget line 01 04 01 14 Provisioning of the 
Guarantee Fund 

Commitments 
Payments 

(1a) 

(2a) 

31.5 

31.5 

13.5 

13.5 

45 

45 

Appropriations  of  an  administrative  nature  financed  from  the  envelope 
of specific programmes19  
(operational assessment and ex-post evaluation) 
Budget line 01 03 02 

Commitments 

(3) 

TOTAL appropriations 
for DG ECFIN 

Payments 

Commitments 

Payments 

(3a) 

=1+1a 
+3 

=2+2a 

+3 

(cid:121) TOTAL operational appropriations  

Commitments 
Payments 

TOTAL  appropriations  of  an  administrative  nature  financed 
from the envelope for specific programmes 

TOTAL appropriations  
under HEADING 4 
of the multiannual financial framework 

Commitments 

Payments 

(4) 

(5) 

(6) 

=4+ 6 

=5+ 6 

0.15 

0.05 

0.10 

0.15 

0.15 

31.65 

13.5 

45.15 

31.55 

13.6 

45.15 

31.65 

31.55 

13.5 

45.15 

13.6 

45.15 

31.65 

13.5 

45.15 

31.55 

13.6 

45.15 

18 
19 

Year in which implementation of the proposal/initiative starts. 
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former ‘BA’ lines), indirect research, direct research. 

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If more than one heading is affected by the proposal / initiative: 

EUR million (to three decimal places) 

Heading of multiannual 
financial framework: 

5 

‘Administrative expenditure’ 

DG: ECFIN 

(cid:121) Human resources 
(cid:121) Other administrative expenditure  

Year 
2016 

Year 
2017 

Year 
2018 

Year 
2019 

TOTAL 

0.039 

0.025 

0.029 

0.021 

0.016 

0.015 

0.105 

0.040 

TOTAL DG ECFIN 

Appropriations  

0.064 

0.044 

0.021 

0.016 

0.145 

TOTAL appropriations 
for HEADING 5 
of the multiannual financial 
framework  

(Total  commitments  = 
Total payments) 

0.064 

0.044 

0.021 

0.016 

0.145 

EUR million (to three decimal places) 

Year 
201620 

Year 
2017 

Year 
2018 

Year 
2019 

TOTAL 

TOTAL appropriations  
under HEADINGS 1 to 5 
of the multiannual financial 
framework  

Commitments 

0.064 

0.044 

31.671 

13.516 

45.295 

Payments 

0.064 

0.044 

31.571 

13.616 

45.295 

20 

Year in which implementation of the proposal starts. 

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3.2.2.  Estimated impact on operational appropriations  

–  (cid:133)  The proposal/initiative does not require the use of operational appropriations  

–  X The proposal/initiative requires the use of operational appropriations, as explained below: 

Commitment appropriations in EUR million (to three decimal places) 

Indicate objectives and outputs  

(cid:216) 

   SPECIFIC OBJECTIVE NO 1 

Year 2016 

Year 2017 

Year 2018 

Year 2019 

Type 

Number 

Cost  Number

Cost 

Number 

Cost 

Number  Cost 

Total 
number 

Total 
Cost 

- Output 1 

- Output 2 

Ex-post evaluation 

Provisioning of the 
Guarantee Fund 

Subtotal for specific objective No 1 

TOTAL COST 

1 

1 

2 

0.15 

31.5 

31.65 

2 

31.65 

1 

2 

3 

3 

0.15 

45 

45.15 

45.15 

1 

1 

1 

13.5 

13.5 

13.5 

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3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.3.1.  Summary  

–  (cid:133)  The  proposal/initiative  does  not  require  the  use  of  appropriations  of  an 

administrative nature  

–  X  The  proposal/initiative  requires  the  use  of  appropriations  of  an  administrative 

nature, as explained below: 

EUR million (to three decimal places) 

Year 
201621 

Year 
2017 

Year 
2018 

Year 
2019 

TOTAL 

Enter as many years as 
necessary to show the 
duration of the impact (see 
point 1.6) 

0.105 

0.040 

0.145 

HEADING 5 
of the multiannual 
financial framework 

Human resources  

0.039 

0.029 

0.021 

0.016 

Other administrative 
expenditure  

0.025 

0.015 

0.064 

0.044 

0.021 

0.016 

Subtotal HEADING 5 
of the multiannual 
financial framework  

Outside HEADING 522 of 
the multiannual financial 
framework  

Human resources  

Other 
of 
an 
nature 

expenditure  
administrative 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

TOTAL 

0.065 

0.044 

0.021 

0.016 

0.145 

The  administrative  appropriations  required  will  be  met  by  the  appropriations  of  the  DG  which  are  already  assigned  to 
management  of  the  action  and/or  which  have  been  redeployed  within  the  DG,  together  if  necessary  with  any  additional 
allocation  which  may  be  granted  to  the  managing  DG  under  the  annual  allocation  procedure  and  in  the  light  of budgetary 
constraints.

21 
22 

Year in which implementation of the proposal/initiative starts. 
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former ‘BA’ lines), indirect research, direct research. 

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3.2.3.2.   Estimated requirements of human resources  

–  (cid:133)  The proposal/initiative does not require the use of human resources.  

–  X The proposal/initiative requires the use of human resources, as explained below: 

Estimate to be expressed in full time equivalent units 

Year 
2016 

Year 
2017 

Year 2018 

Year 2019 

Enter as many years as necessary to 
show the duration of the impact (see 
point 1.6) 

(cid:121) Establishment plan posts (officials and temporary agents) 

01 01 01 01 (Headquarters and 
Commission’s Representation Offices) 
XX 01 01 02 (Delegations) 
XX 01 05 01 (Indirect research) 
10 01 05 01 (Direct research) 

0.39 

0.29 

0.21 

0.16 

(cid:121) External personnel (in Full Time Equivalent unit: FTE)23 

XX 01 02 01 (CA, INT, SNE from the 
"global envelope") 
XX 01 02 02 (CA, INT, JED, LA and SNE 
in the delegations) 
XX 01 04 yy24 

- at Headquarters 
- in delegations  

XX 01 05 02 (CA, SNE, INT - Indirect 
research) 

10 01 05 02 (CA, SNE, INT - Direct 
research) 
Other budget lines (specify) 
TOTAL 

0.39 

0.29 

0.21 

0.16 

XX is the policy area or budget title concerned. 

The human resources required will be met by staff from the DG who are already assigned to management of the action and/or 
have  been  redeployed  within  the  DG,  together  if  necessary  with  any  additional  allocation  which  may  be  granted  to  the 
managing DG under the annual allocation procedure and in the light of budgetary constraints. 

Cost of the staff needed is estimated on the basis of 30% of the annual expenditure for an AD5 - AD 12 grade official. 

Description of tasks to be carried out: 

Officials and temporary staff 

HoU:  Supervise  and  manage  the  operation,  agree  on  the  Loan 
Agreement review reports, lead missions and assess progress with 
conditionality compliance.  

Desk: Prepare the Memorandum of Understanding, liaise  with the 
authorities  and  the  IFIs,  liaise  with  external  experts  for  the 
operational  assessment  and  ex-post  evaluation,  conduct  review 
missions,  prepare  Commission  staff  reports  and  Commission 
procedures related to the management of the assistance. 

External staff 

N/A 

23 

24 

CA= Contract Agent; LA = Local Agent; SNE = Seconded National Expert; INT = agency staff (‘Intérimaire’); JED= 
‘Jeune Expert en Délégation’ (Young Experts in Delegations).  
Sub-ceiling for external staff covered by operational appropriations (former "BA" lines). 

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3.2.4.  Compatibility with the current multiannual financial framework  

–  X Proposal/initiative is compatible the current multiannual financial framework. 

3.2.5.  Third-party contributions  

–  X The proposal/initiative does not provide for co-financing by third parties.  

3.3. 

Estimated impact on revenue  

X 

Proposal/initiative has no financial impact on revenue. 

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