Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL providing further macro-financial assistance to the Hashemite Kingdom of Jordan
Date: 2016-06-29
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Community loan, EU aid, European neighbourhood policy, Jordan, economic reform, economic stabilisation, financial aid

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   EUROPEAN COMMISSION  Brussels, 29.6.2016  COM(2016) 431 final 2016/0197 (COD)   Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL providing further macro-financial assistance to the Hashemite Kingdom of Jordan {SWD(2016) 213 final}  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Since  early  2011,  the  Jordanian  economy  has  been  significantly  affected  by  the  ongoing 
regional  unrest,  notably  in  neighbouring  Iraq  and  Syria.  Combined  with  a  weaker  global 
environment, this regional unrest has taken a heavy toll on external receipts and has strained 
public  finances.  Lower  tourism  and  FDI  inflows,  blocked  trade  routes,  and  repeated 
disruptions to the flow of natural gas from Egypt, which forced Jordan to replace gas imports 
from Egypt with more expensive fuels for electricity generation, have put a drag on growth 
and weighed on Jordan's external and fiscal position. The Syrian conflict has impacted Jordan 
not only by disrupting trade with and through Syria but also by causing an inflow of around 
1.3  million  of  Syrian  refugees  into  Jordan  that  has  increased  pressure  on  Jordan's  fiscal 
position, public services and infrastructure. 

In 2012, Jordan and the IMF agreed on a first adjustment programme, which was supported 
by  a  three-year  Stand-By  Arrangement  (SBA)  in  the  amount  of  USD  2  billion.  This 
programme  was  successfully  completed  in  August  2015.  The  IMF  programme  was 
complemented  by  a  first  Macro-Financial  Assistance  from  the  European  Union  (the  EU)  in 
the amount of EUR 180 million (MFA-I), which was adopted by the European Parliament and 
the  Council  in  December  2013  and  was  disbursed  in  two  tranches  of  EUR  100  million  and 
EUR 80 million in February 2015 and in October 2015, respectively.  

While the country made progress with macroeconomic stabilisation and reform under the first 
programme supported by the IMF, the EU and other donors, the persistence of the conflicts in 
neighbouring  Syria  and  Iraq  continued  to  disrupt  Jordan's  foreign  trade  and  undermine 
investor  and  tourist  confidence,  with  the  economic  situation  deteriorating  again  in  2015.  In 
this context, the Jordanian government has called for increased support from the international 
community to  address the economic consequences of the Syrian crisis, and in  particular the 
presence of a large number of Syrian refugees in Jordan. At the conference 'Supporting Syria 
and  the  Region',  held  in  London  on  4  February  2016,  the  international  community  pledged 
about USD 10 billion to help the countries most affected by the Syrian refugee crisis. Of this 
amount,  the  EU  pledged  EUR  2.39  billion  for  the  countries  affected  by  the  Syrian  refugee 
crisis  including  a  EUR  200  million  loan  for  the  purpose  of  a  second  Macro-Financial 
Assistance  operation  for  Jordan  (MFA-II).  On  3  March  2016,  through  a  letter  from  the 
Ministry  of  Planning  and  International  Cooperation  to  the  Commissioner  for  Economic  and 
Financial Affairs Taxation and Customs, the Jordanian authorities formalised their request for 
a  new  MFA  from  the  EU1.  The  new  proposed  MFA  operation  will  be  part  of  the  so-called 
EU-Jordan  Compact  (annexed  to  EU-Jordan  partnership  priorities),  a  document  that  the  EU 
and  Jordan  are  discussing  and  that  would  contain  precise  commitments  on  both  sides 
(including  financial  assistance  from  the  EU)  aimed  at  addressing  a  number  of  policy 
priorities. 

At  the  same  time,  Jordan  and  the  IMF  have  been  negotiating  a  successor  financial 
arrangement,  which  is  expected  to  be  put  in  place  in  the  second  half  of  2016.  The 
arrangement, which will probably take the form of an Extended Fund Facility (EFF), would 
support a new economic programme probably covering 3 years. 

In this context, and consistent with the pledge made at the London conference, the European 
Commission  is  submitting  to  the  European  Parliament  and  the  Council  a  proposal  for  a 

1 

In this letter, the authorities requested a new MFA in the amount of EUR 350 million. 

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Decision providing a new MFA to Jordan of up to EUR 200 million, in the form of medium-
term  loans.  The  proposed  amount  seems  justified  based  on  an  updated  assessment  of  the 
country's external financing needs, the size of the expected IMF programme, burden-sharing 
considerations and the room for manoeuvre available in the EU budget. 

The proposed EU MFA would help Jordan cover part of its residual external financing needs, 
for  the  period  2016-17,  estimated  at  about  USD  3.2  billion.  Since  it  is  intended  that  the 
assistance would be channelled to the budget, the new assistance (as the previous one) would 
also help Jordan cover part of the fiscal costs associated with the Syrian refugee crisis.  

As  further  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 the proposed MFA operation are satisfied. 

• 

General context  

Following a period of robust growth averaging 6.5% during 2000-2009, Jordan's GDP growth 
has  decelerated  to  an  average  of  2¾%  in  2011-2014.  While  growth  recovered  to  3.1%  in 
2014, the intensification of the Syrian crisis in 2015, through its effects on trade, tourism and 
investor  confidence,  as  well  as  the  slowdown  in  the  Gulf  Cooperation  Council  (GCC) 
economies,  which  are  major  trading  partners  for  Jordan  and  also  an  important  source  of 
tourism, remittances and financial flows, contributed to a deceleration of growth back to 2.4% 
in 2015. 

The  deceleration  of  the  economy  resulted  in  a  sizeable  increase  in  unemployment.  After 
declining  from  12.6%  in  2013  to  11.9%  in  2014,  the  unemployment  rate  increased  again to 
14.6% in the first quarter of 2016. Unemployment remains particularly high for young people 
and women (33% and 23.7%, respectively, in the first quarter of 2016).  

Helped  by  sharp  declines  in  food  and  fuel-related  prices,  consumer  prices  fell  by  0.9%  in 
2015  (with  core  inflation  at  about  2%,  however,  partly  reflecting  the  demand  from  Syrian 
refugees). Consumer price inflation is expected to recover this year as fuel prices stabilise or 
pick up somewhat, but it is expected to remain low (in the 1%-1.5% range). Reflecting this 
subdued  inflation  trends  and  the  weakening  of  growth,  the  Central  Bank  of  Jordan  reduced 
the rediscount rate from 4.25% in early 2015 to 3.75% in July 2015. 

Jordan has made substantial progress with fiscal consolidation since its fiscal deficit jumped 
in  2012-2013,  largely  reflecting  adjustment  measures  taken  in  the  context  of  the  IMF 
programme (including the introduction of a new income tax law in 2015) and the decline in 
oil  prices,  which  allowed  to  reduce  markedly  the  operating  loss  of  NEPCO  (the  national 
electricity company) and the state transfers to this company. Thus, the overall fiscal balance, 
which includes transfers to NEPCO and to WAJ (the Water Authority of Jordan) as well as 
grants, declined from a peak of about 11% of GDP in 2013 to 3.5% of GDP in 2015.  

The improvement in the underlying fiscal position is, however, less substantial when looking 
to the primary deficit of the central government, excluding grants and transfers to NEPCO and 
to  WAJ. This  measure deteriorated in  2015 (increasing to  5.2%  of GDP) and  remains  more 
than  three  percentage  points  of  GDP  above  what  the  IMF  had  programmed.  The  combined 
deficit  of  the  central  government  and  NEPCO  (which  adds  to  the  above-mentioned  primary 
deficit measure NEPCO's operating loss) remains above 6% of GDP and is also substantially 
above what had been targeted under the IMF's SBA programme (3.5% of GDP).  

The  persistent  fragility  of  Jordan's  fiscal  position  is  further  highlighted  by  the  fact  that  the 
country continues to be very dependent on foreign grants (which are expected to remain lower 

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in the coming years, reflecting the impact of lower oil prices on the finances of GCC donors) 
and by the risk that oil prices will recover more markedly than currently assumed. Moreover, 
Jordan  must  continue  to  accommodate  the  significant  fiscal  cost  related  to  the  Syrian 
refugees,  which  mainly  reflects  higher  expenditure  in  subsidies,  health,  education  and 
infrastructure. According to the Jordanian authorities, the cost of direct and indirect expenses 
related  to  the  hosting  the  Syrian  refugees  has  amounted  to  approximately  USD  6.6  billion 
since the beginning of the Syrian conflict.  

Reflecting substantial borrowing from foreign donors, as well as the issuance of international 
bonds,  Jordan's  gross  public  debt  increased  further  to  93.4%  of  GDP  end  the  end  of  2015, 
continuing an upward trend observed since 2008, when the ratio stood at 60.2% of GDP. The 
public debt's dynamics  are, however, judged by the IMF to be sustainable provided that the 
country  continues  to  deliver  on  further  medium-term  fiscal  adjustment  and  continues  to 
receive substantial grants from the international community. 

While  Jordan  has  achieved  a  substantial  correction  of  its  current  account  deficit since  2013 
(reflecting fiscal consolidation, the decline in oil prices and the shift to cheaper types of fuel), 
the  deficit  remains  very  large,  amounting  to  11.7%  of  GDP  in  2015.  The  escalation  of  the 
conflicts  in  Syria  and  Iraq  in  2015  weighed  on  exports,  tourism  and  investor  confidence. 
Exports  decreased  by  6.6%  as  a  result  of  disrupted  trade  routes  while  income  from  tourism 
dropped by 7.1%, reflecting a sizeable decrease in tourists' arrivals from 4.1 million in 2014 
to  3.7  million  in  2015.  This  partly  compensated  for  the  decline  in  imports  in  a  context  of 
weaker growth  and low oil prices. External pressures continued in  the first quarter  of 2016, 
leading to a sizeable widening of the trade deficit (by 13% on a year-on-year basis), reflecting 
new declines in exports and tourism revenues. The current account deficit excluding grants is 
expected  to  remain  close  to  10%  of  GDP  in  2016-2017  (or  around  6%  of  GDP  including 
foreign grants). 

The  decline  in  foreign  direct  investment,  from  USD  1.8  billion  in  2014  to  around  USD  1.2 
billion in 2015, created further pressures to the external position. Despite the decline in FDI, 
the capital and financial account recorded a net inflow of USD 2.2 billion in 2015, compared 
to a net inflow of USD 1.2 in 2014. This was made possible by the issuance in June of two 
Eurobonds guaranteed by the US Treasury for a total of USD 1.5 billion and the issuance in 
November of a non-guaranteed Eurobond of USD 500 million.  

In March 2016, net international reserves stood at a comfortable level of USD 13.4 billion, 
equivalent  to  around  7  months  of  next  year's  imports.  Including  gold,  international  reserves 
stood at about USD 15 billion. 

In  the  context  of  the  adjustment  and  reform  programmes  supported  by  the  assistance  of  the 
IMF,  the  World  Bank  and  the  EU's  first  MFA  operation,  which  was  completed  in  October 
2015,  the  Jordanian  authorities  made  significant  progress  in  a  number  of  key  structural 
reform areas. This included the reform of fuel subsidies and introduction of a compensatory 
cash transfer scheme, efforts to diversify energy sources, tax reform and the revamping of the 
investment  framework.  However,  the  country  continues  to  face  significant  structural  reform 
challenges. The tax base is still narrow, entailing many tax-exemptions, and there is still scope 
for  strengthening  tax  administration  and  for  further  reforming  income  taxation  in  order  to 
increase both revenues and progressivity. These reforms should support fiscal consolidation. 
Jordan also suffers from rigid labour markets and skill mismatches, which contributes to high 
unemployment, particularly among the youth, as well as from very low rates of participation 
among  women.  Efforts  to  diversify  energy  sources  and  increase  energy  efficiency  should 
continue,  in  order  to  meet  the  increased  demand  for  electricity  and  reduce  further  Jordan's 
dependency on oil fuel. Water sector reform is another key reform challenge, with transfers to 

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WAJ  remaining  a  substantial  burden  on  the  budget.  There  is  also  scope  for  further 
improvement the business and investment climate, which is key for raising investment inflows 
under 
the  current  difficult  regional  environment.  Also,  economic  governance  and 
transparency should be strengthened, including by pursuing efforts to improve public finance 
management,  for  example  by  adopting  the  new  legislation  on  the  Audit  Bureau  and  by 
modernising debt management.  

The projections by the IMF, in February 2016, point towards significant balance of payments 
needs  for  the  period  2016-2017,  with  the  total  external  financing  gap estimated  at  USD  3.2 
billion (USD 2 billion in 2016 and USD 1.2 billion in 2017). This financing gap can broadly 
be  attributed  to  three  factors:  a  persistently  large  current  account  deficit  large  debt 
amortization requirements expected, especially for 2016, and the need to maintain a prudent 
foreign exchange reserve level. The proposed new MFA operation of EUR 200 million would 
cover 7.4% of the estimated residual financing gap (after deducting net IMF financing and the 
expected disbursement of World Bank policy-based loans). 

As in recent years, other donors (including France, Japan, the US and the GCC countries and 
the  Arab  Monetary  Fund,  as  well  as  the  EU  through  its  grant-based  budgetary  support 
financed  by the European Neighbourhood  Instrument)  are expected to contribute substantial 
additional  funds  in  the  coming  period,  ensuring  a  reasonable  burden-sharing  in  the  donors' 
support effort.  

• 

Existing provisions in the area of the proposal 

Decision  No  1351/2013/EU  providing  a  first  macro-financial  assistance  to  Jordan  in  the 
amount of EUR 180 million was adopted by the European Parliament and the Council on 11 
December 20132. The assistance was fully disbursed during 2015. 

• 

Consistency with the other policies and objectives of the Union policies 

The EU and Jordan have developed a close political and economic relationship over the years. 
In 2010, an Advanced Status partnership was agreed between the EU and Jordan that entails 
expanded  areas  of  cooperation.  The  legal  basis  for  the  EU-Jordan  relationship  is  the 
Association Agreement that entered into force on 1 May 2002 and the different cooperation 
and dialogue instruments created under the ENP. Jordan is also a member of the Union for the 
Mediterranean. The EU aims to assist Jordan in the implementation of its own reform process 
based  on  the  priorities  and  actions  defined  in  the  Single  Support  Framework  adopted  for 
2014-2017.  In  response  to  the  conflicts  in  Syria  and  Iraq,  and  with  a  view  to  further 
strengthening  the  solid  and  multi-faceted  relationship  between  the  EU  and  Jordan,  the  two 
sides have started discussions on a new Partnership Priorities Agreement which should guide 
EU-Jordan  relations  for  the  period  2016-2018.  The  partnership  priorities  involve  the 
fulfilment of mutual commitments, specified in the EU-Jordan Compact, also currently under 
discussion. Jordan has developed important economic ties with the EU. In 2014, the EU was 
Jordan's second largest trading partner, with a trading share of 15.5% after Saudi Arabia with 
17.7% and before the US (third trading partner with a share of 8.5%). A preparatory process 
for launching negotiations on a Deep and Comprehensive Free  Trade Area  (DCFTA) is  on-
going. The DCFTA would aim at improving market access opportunities and the investment 
climate  and  promoting  closer  economic  integration  between  the  EU  and  Jordan.  While  the 
actual  negotiations  on  the  DCFTA  have  yet  to  be  launched,  the  parties  have  started 

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Decision  No  1351/2013/EU  of  the  European  Parliament  and  of  the  Council  of  11  December  2013 
providing macro-financial assistance to the Hashemite Kingdom of Jordan (OJ L 341, 18.12.2013, p. 4). 

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discussions on a temporary relaxation of the rules of origin on the part of the EU applied in 
their bilateral trade. It is hoped that this initiative, which forms part of the EU's support for 
Jordan in the present Syrian refugee crisis, will provide a boost to Jordanian exports to the EU 
and create additional employment opportunities for both Jordanians and Syrian refugees.  

The  EU  MFA  would  complement  the  grants  mobilised  under  the  ENI  and  other  EU 
programmes  and  in  particular  the  conditionalities  envisaged  under  the  budget  support 
packages  being  implemented  by  the  EU.  By  supporting  the  adoption  by  the  Jordanian 
authorities of an appropriate framework for macroeconomic policy and structural reforms, the 
EU’s  MFA  would  enhance  the  added  value  and  effectiveness  of  the  EU’s  overall  financial 
interventions, including through other financial instruments. 

Jordan has taken important steps towards strengthening democratic rights and the rule of law. 
A  Constitutional  Court  and  an  Independent  Electoral  Commission  have  been  set  up  and  a 
number of major laws, including the Electoral Act and the Political Parties Act as well as laws 
on decentralisation and municipalities, have been passed by the Jordanian Parliament. 

While there is still room for reinforcing its democratic institutions and legal framework and 
for making its democracy more representative of the different social and ethnic groups, Jordan 
has  managed  to  make  progress  in  this  area  despite  a  difficult  regional  environment  and 
continues to exert a stabilising and moderating role in the region. 

In this context, Jordan is deemed to meet the political preconditions for the granting of MFA, 
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.  The  proposed  new  MFA  is  also  consistent  with  the  EU's 
commitment to support Jordan's economic and political transition. 

2. 

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LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Summary of the proposed action 

The  EU  shall  make  MFA  available  to  Jordan  for  a  total  maximum  amount  of  EUR  200 
million, provided in the form of a medium-term loan. The assistance will contribute to cover 
Jordan's  residual  external  financing  needs  in  2016-2017,  as  identified  by  the  Commission 
based on the estimates of the IMF.  

The assistance is planned to be disbursed in two loan instalments of EUR 100 million each. 
The  disbursement  of  the  first  instalment  is  expected  to  take  place  towards  the  end  of  2016. 
The second instalment, conditional on a number of policy measures, could be disbursed in the 
second  quarter  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  Jordanian  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. 
As  noted  above,  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  economic  reform  priorities  agreed  between  the EU  and  Jordan  in  the 

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context  of  the  Single  Support  Framework  for  2014-2017  and  other  strategic  documents 
(including the future Partnership Priorities and the Jordan Compact). They would 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  Jordan's  level  of 
economic development (as measured by its per-capita income) and debt indicators. It is also 
consistent with the treatment given to Jordan by the World Bank and the IMF. Indeed, Jordan 
is not eligible for concessional financing from either the International Development Agency 
or the IMF's Poverty Reduction and Growth Trust fund. 

• 

Legal basis 

The legal basis for this proposal is Article 212 TFEU.  

• 

Subsidiarity (for non-exclusive competence)  

is  respected  as 

the  objectives  of  restoring  short-term 
The  subsidiarity  principle 
macroeconomic  stability  in  Jordan  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 

The  proposal  complies  with  the  proportionality  principle:  it  confines  itself  to  the  minimum 
required in order to achieve the objectives of short-term macroeconomic 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 Extended Fund Facility, the amount of the proposed new MFA corresponds to 7.4% of 
the  estimated  residual  financing  gap  for  the  period  2016-2017.  This  is  consistent  with 
standard  practices  on  burden-sharing  for  MFA  operations.  Given  the  assistance  pledged  to 
Jordan by other bilateral and multilateral donors, it is deemed an appropriate level of burden-
sharing for the EU.   

• 

Choice of the instrument 

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 Jordan under other, more narrowly focused EU financial instruments.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Consultation of interested parties 

MFA is provided as an integral part of the international support for the economic stabilisation 
of  Jordan.  In  the  preparation  of  this  proposal  for  MFA,  the  Commission  services  have 

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consulted  with  the  IMF  and  the  World  Bank,  which  have  already  put  in  place  sizeable 
financing  programs  and  are  preparing  new  ones.  The  Commission  consulted  the  Economic 
and  Financial  Committee  on  2  June  2016,  receiving  an  endorsement  for  the  proposal.  The 
Commission has also been in regular contact with the Jordanian authorities. 

• 

Collection and use of expertise 

An  Operational  Assessment  for  verifying  the  quality  and  reliability  of  Jordan's  public 
financial circuits and administrative procedures will be carried out  by the Commission  with 
the  assistance  of  external  experts  before  the  effective  implementation  of  the  assistance.  Its 
results,  which  will  be  shared  with  Jordanian  authorities  and  the  EU  Delegation  for  further 
work on possible areas for improvement, might also be reflected in the policy conditionality 
of the proposed MFA. 

• 

Impact Assessment 

The  EUs  macro-financial  assistance  is  an  exceptional  emergency  instrument  aimed  at 
addressing  severere  balance-of-payment  difficulties  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  Commission's  MFA  proposals  build  on  lessons  learned  from  ex-post 
evaluations carried out on past operations in the EU's neighbourhood. Like MFA-I, MFA-II 
and the economic adjustment and reform programme attached to it will help alleviate Jordan's 
short-term financing needs while supporting policy measures aimed at strengthening medium-
term  balance  of  payments  and  fiscal  sustainability  and  raising  sustainable  growth,  thus 
complementing the programme to be agreed with the IMF. These measures are likely to cover 
reform areas such as public financial management and other aspects of economic governance, 
tax reform, the strengthening of the social safety net, energy and water sector reforms, trade 
and  investment,  and  the  labour  market,  including  measures  to  facilitate  the  integration  of 
Syrian refugees into the Jordanian labour market. 

4. 

BUDGETARY IMPLICATIONS 

The  planned  assistance  would  be  provided  in  the  form  of  a  loan  and  would  be  financed 
through  a  borrowing  operation  that  the  Commission  will  conduct  on  behalf  of  the  EU.  The 
budgetary impact of the assistance will correspond to the provisioning of the EU's Guarantee 
Fund for external actions, at a rate of 9% of the amounts disbursed, from budget line 01 03 06 
("Provisioning of the Guarantee Fund"). Assuming that the first loan disbursement (of EUR 
100 million) will be made in 2016 and the second loan disbursement (of EUR 100 million) in 
2017 in accordance with the rules governing the guarantee fund mechanism, the provisioning 
will take place in the 2018-19 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. 

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5. 

• 

OTHER 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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2016/0197 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

providing further macro-financial assistance to the Hashemite Kingdom of Jordan 

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 Commission, 

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

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Relations between the European Union ('the Union') and the Hashemite Kingdom of Jordan 
('Jordan')  are  developing  within  the  framework  of  the  European  Neighbourhood  Policy 
(ENP). Jordan signed an Association Agreement with the EU on 24 November 1997, which 
came  into  force  on  1  May  2002.  Under  the  Association  Agreement  the  EU  and  Jordan 
gradually established a Free Trade Area over a transitional period of 12 years. In addition, 
an agreement on further liberalisation of agricultural products entered into force in 2007. In 
2010,  an  Advanced  Status  partnership  was  agreed  between  the  EU  and  Jordan  that  entails 
expanded  areas  of  cooperation.  A  protocol  on  Dispute  Settlement  Mechanisms  for  trade 
between the EU and Jordan initialed in December 2009 entered into force on 1 July 2011. 
Bilateral  political  dialogue  and  economic  cooperation  have  been  further  developed  within 
the framework of ENP Association Agreement and the Single Support Framework adopted 
for 2014-2017. 

Since  2011,  Jordan  has  embarked  on  a  number  of  political  reforms  to  strengthen 
parliamentary  democracy  and  the  rule  of  law.  A  Constitutional  Court  and  an  Independent 
Electoral Commission have been set up and a number of major laws, including the Electoral 
Act and the Political Parties Act as well as laws on decentralisation and municipalities, have 
been passed by the Jordanian Parliament. 

The Jordanian economy has suffered significantly from the ongoing regional unrest, notably 
in neighbouring Iraq and Syria. Combined with a weaker global environment, this regional 
unrest has taken a heavy toll on external receipts and has strained public finances. Tourism 
and foreign direct investment inflows have been negatively affected, trading routes blocked 
and  the  flow  of  natural  gas  from  Egypt  disrupted.  In  addition,  the  Jordanian  economy  has 
also been impacted from a large inflow of Syrian refugees, which has increased pressure on 
its fiscal position, public services and infrastructure. 

Since the outbreak of the conflicts in Syria in 2011 the Union has expressed its unequivocal 
commitment to supporting Jordan as it addresses the economic and social consequences of 
the Syrian crisis, and in particular of the presence of a large number of Syrian refugees in its 
territory.  It  has  increased  its  financial  support  to  Jordan,  strengthening  its  cooperation  in 
many fields, including the civil society, the electoral system, security, regional development 

EN 

10 

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(5) 

(6) 

(7) 

(8) 

(9) 

and social and economic reforms. And the Union has offered the possibility of concluding a 
Deep and Comprehensive Free Trade Area agreement.  

In  this  difficult  economic  and  financial  context,  the  Jordanian  authorities  and  the 
International Monetary Fund (IMF) agreed in August 2012 on a first economic adjustment 
programme,  which  was  supported  by  a  three-year  Stand-By  Arrangement  (SBA)  in  the 
amount  of  USD  2  billion.  This  programme  was  successfully  completed  in  August  2015. 
Under  this  programme,  Jordan  made  considerable  progress  with  fiscal  consolidation  (also 
helped by the decline in oil prices) and with a number of structural reforms. 

In  December  2012,  Jordan  requested  complementary  macro-financial  assistance  from  the 
Union. In response, macro-financial assistance of EUR 180 million in the form of loans was 
adopted  in  December  20133  (MFA-I).  The  Memorandum  of  Understanding  defining  the 
policy  conditions  related  to  this  first  macro-financial  assistance  entered  into  force  on  18 
March 2014. Following the implementation of the agreed policy measures, the first tranche 
of MFA-I was disbursed on 10 February 2015 and the second tranche was disbursed on 15 
October 2015. 

Since  the  outbreak  of  the  Syrian  crisis,  the  EU  has  allocated  almost  EUR  1.13  billion  to 
Jordan.  This  includes,  in  addition  to  the  EUR  180  million  from  the  first  macro-financial 
assistance  operation,  EUR  500  million  in  regular  programmed  bilateral  cooperation  for 
Jordan  financed  under  the  European  Neighbourhood  Instrument,  about  EUR  250  million 
from  the  humanitarian  budget  and  more  than  EUR  30  million  from  the  Instrument 
contributing  to  Stability  and  Peace.  Moreover,  the  European  Investment  Bank  has  made 
available loans in the amount of EUR 264 million since 2011.  

The intensification of the Syrian crisis in 2015 affected severely Jordan through its effects 
on trade, tourism and investor confidence. Jordan was also affected by a decline in financial 
support from the Gulf Cooperation Council (GCC) countries, affected by the decline in oil 
prices. As a result, economic growth has slowed down again, unemployment has increased 
and new fiscal and external financing needs have emerged. 

In this challenging context, the Union has reaffirmed its commitment to supporting Jordan in 
its economic and social challenges and reform process. In particular, this commitment was 
expressed  at  the  conference  'Supporting  Syria  and  the  Region',  held  in  London  on  4 
February 2016, where the EU pledged 2.39 billion in 2016-2017 in financial support for the 
countries  most  affected  by  the  refugee  crisis,  including  Jordan.  Political  and  economic 
support  from  the  Union  to  Jordan'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  Jordan’s  economic  and  financial  situation,  the  IMF  and 
Jordan have also started discussions on a successor arrangement, which could take the form 
of an Extended Fund Facility ('IMF programme') and would likely cover a period of three 
years,  starting  in  the  second  semester  of  2016.  The  new  IMF  programme  would  aim  at 
alleviating  Jordan’s  short-term  balance  of  payment  difficulties  while  encouraging  the 
implementation of strong adjustment measures. 

(11) 

In March 2016, in view of the worsening economic situation and outlook, Jordan requested 
additional macro-financial assistance from the Union. 

3 

Decision No 1351/2013/EU of the European Parliament and of the Council of 11 December 2013 providing 
macro-financial assistance to the Hashemite Kingdom of Jordan (OJ L 341, 18.12.2013, p. 4). 

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(12)  Given that Jordan 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  immediate  external  financing  needs  and  should  underpin  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. 

(14)  Given that  there  is  still  a  significant residual  external financing  gap  in  Jordan'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  Jordan  is,  under  the  current 
exceptional circumstances, considered to be an appropriate response to Jordan'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 Jordan, 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  Jordan  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  Jordan'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  Jordan  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 
Jordan. 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  Jordan'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  Jordan 
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 management systems in Jordan and to 
promote  structural  reforms  aimed  at  supporting  sustainable  and  inclusive  growth, 
employment creation and fiscal consolidation. Both fulfilment of the preconditions and the 

EN 

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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, Jordan 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  provisioning  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 
Council4. 

(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  Jordanian  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 Jordan, 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. 

2. 

4 

Article 1 

The  Union  shall  make  macro-financial  assistance  of  a  maximum  amount  of  EUR  200 
million  available  to  Jordan  ("the  Union's  macro-financial  assistance"),  with  a  view  to 
supporting Jordan's economic stabilisation and a substantive reform agenda. The assistance 
shall  contribute  to  covering  Jordan's  balance  of  payments  needs  as  identified  in  the  IMF 
programme.  

The  full  amount  of  the  Union's  macro-financial  assistance  shall  be  provided  to  Jordan  in 
the form of loans. The Commission shall be empowered on behalf of the Union to borrow 

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). 

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13 

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the  necessary  funds  on  the  capital  markets  or  from  financial  institutions  and  to  on-lend 
them to Jordan. 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 Jordan, and with the key principles and objectives 
of economic reforms set out in the EU-Jordan Association Agreement, the Single Support 
Framework  for  2014-2017  and  the  future  Partnership  Priorities.  The  Commission  shall 
regularly inform the European Parliament and the Council of developments regarding the 
Union's  macro-financial  assistance,  including  disbursements  thereof,  and  shall  provide 
those institutions with the relevant documents in due time. 

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  Jordan  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  Jordan 
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  this  Article  shall  be  applied  in  accordance  with  Council  Decision 
2010/427/EU5. 

Article 3 

The Commission, in accordance with the examination procedure referred to in Article 7(2), 
shall agree with the Jordanian 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 Jordan with the support of 
the IMF.  

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 
Jordan, 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 

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). 

3. 

4. 

5. 

1. 

2. 

3. 

1. 

2. 

5 

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14 

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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 Jordanian 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  Jordan  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  two  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 give rise to provisioning of the 
Guarantee  Fund  for  external  actions,  where  required,  in  accordance  with  Council 
Regulation (EC, Euratom) No 480/20096.  

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.  

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 Jordan. 
Subject to the provisions to be agreed in the Memorandum of Understanding, including a 
confirmation of residual budgetary financing needs, the Union funds may be transferred to 
the Jordanian 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. 

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). 

3. 

4. 

1. 

2. 

3. 

4. 

5. 

1. 

6 

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15 

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2. 

3. 

4. 

5. 

1. 

2. 

3. 

7 

8 

9 

10 

11 

Where the circumstances permit, and if Jordan 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 Jordan 
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 Jordan. 

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  Council7 
and Commission Delegated Regulation (EU) No 1268/20128. 

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

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

(a) 

(b) 

ensuring that Jordan 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  macro-financial  assistance,  in 
accordance with Council Regulation (EC,Euratom) No 2988/959, Council Regulation 
(EC,  Euratom)  No  2185/9610  and  Regulation  (EU,  Euratom)  No  883/2013  of  the 
European Parliament and of the Council11;  

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). 
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). 

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16 

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(c) 

(d) 

(e) 

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, Jordan has engaged in any act of fraud or corruption or any other illegal 
activity detrimental to the financial interests of the Union. 

Before the implementation of the Union's macro-financial assistance, the Commission shall 
assess,  by  means  of  an  operational  assessment,  the  soundness  of  Jordan's  financial 
arrangements,  the  administrative  procedures,  and  the  internal  and  external  control 
mechanisms which are relevant to the 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 Jordan, 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, Jordan’s on-going economic and fiscal performance 
and  the  Commission’s  decisions  to  release  the  instalments  of  the  Union's  macro-
financial assistance. 

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. 

4. 

1. 

2. 

1. 

2. 

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

Article 9 

EN 

17 

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Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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18 

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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

EN 

19 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Proposal for a Decision of the European Parliament and of the Council providing further 
macro-financial assistance to the Hashemite Kingdom of Jordan  
Policy area(s) concerned in the ABM/ABB structure12  

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  

"A new boost for jobs, growth and investment: promoting 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: "Promoting prosperity beyond the EU: supporting macro-financial 
stability  and  promoting  growth-enhancing  reforms  outside  the  EU,  including  through 
regular economic dialogues with key partners and by providing macro-financial assistance" 

ABM/ABB activity(ies) concerned: International Economic and Financial Affairs.  

1.4.3.  Expected result(s) and impact 

The  proposed  assistance  consists  of  an  EU  loan  of  EUR  200  million  to  the  Hashemite 
Kingdom of Jordan ('Jordan'), with a view to contributing to a more sustainable balance of 
payments  situation.  The  assistance,  to  be  disbursed  in  two  instalments,  will  help  the 
country  to  alleviate  the  economic  and  social  hardships  stemming  from  the  regional 
instability and the hosting of Syrian refugees. It will also promote structural reforms aimed 
at  raising  sustainable  economic  growth,  reducing  macroeconomic  vulnerabilities  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 instalment of the assistance.  

12 

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

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20 

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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 Jordan 
that will be carried out in preparation of this operation. The EU Delegation in Jordan 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 Jordan.  

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  a  disbursing  economic  programme  between  Jordan  and  the  IMF, 
which is expected to be in place in the second half of 2016. In addition, the Commission 
shall  agree  with  the  Jordanian  authorities  on  specific  policy  conditions,  listed  in  a 
Memorandum of Understanding, to be met before the second instalment is released by the 
Commission.  

1.5.2.  Added value of EU involvement 

By  helping  the  country  overcome  the  economic  shock  caused  by  the  regional  instability 
and  the  Syrian  refugee  inflow  the  proposed  MFA  will  contribute  to  promoting 
macroeconomic  stability,  economic  reforms  and  political  progress  in  the  country.  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 Jordan. Financial assistance committed for Jordan 
under  the  European  Neighbourhood  Partnership  Instrument  (ENPI)  for  the  period  2007-
2013 totalled EUR 589 million. This amount includes additional funding granted through 
the  incentive-based  SPRING  programme.  For  the  period  2014-2017,  under  the  European 
Neighbourhood  Instrument  (ENI),  EU's  assistance  to  Jordan  may  range  between  a 

EN 

21 

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minimum allocation of EUR 312 million and a maximum allocation of EUR 382 million. 
Jordan  will  benefit  from  the  EU  Regional  Trust  Fund,  the  ‘Madad  fund,  established  in 
December 2014 to support Syria and the neighbouring countries, including Jordan. A first 
series of programmes for an amount of EUR 41 million financed by the Madad fund was 
approved  in  May  2015.  These  funds  were  complemented  by  financing  from  other  EU 
instruments such as the Neighbourhood Investment Facility (NIF). In addition to bilateral 
cooperation programmes, Jordan also benefits from various regional programmes, mainly 
in the areas of rule of law and justice, environmental and climate protection, migration and 
culture and youth. Jordan also participates in initiatives open to all Neighbourhood partner 
countries such as: Erasmus+, which enhances mobility and co-operation with the EU in the 
field  of  higher  education,  TAIEX  and  SIGMA.  Moreover,  Jordan  is  also  eligible  for 
additional  funds  under  several  EU's  thematic  programmes  and  instruments,  including  the 
European  Instrument  for  Democracy  and  Human  Rights  (EIDHR),  the  Non-State  Actors 
and  Local  Authorities  programme  and  the  Migration  and  Asylum  programme.  The 
European  Investment  Bank  is  also  supporting  Jordan  with  a  total  amount  of  contracted 
loans of EUR 264.9 million since 2011, of which EUR 115.9 million in 2015. Lastly, the 
MFA-I  of  EUR  180  million  approved  in  2013  was  satisfactorily  implemented  and  fully 
disbursed in 2015. 

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  to  be  supported  by  the 
IMF's Extended Fund Facility, and the Development Policy Loan of the World Bank.  

1.6. 

Duration and financial impact  

X Proposal/initiative of limited duration  

X  Proposal/initiative  in  effect  for  2  and  a  half  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) envisaged13  

X Direct management by the Commission  

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

This assistance is of macroeconomic nature and its design will be 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 

13 

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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22 

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programme and specific reform measures to be agreed with the Jordanian 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.  

Another  key  risk  to  the  operation  stems  from  the  regional  economic  and  political 
uncertainty,  notably  in  Syria  and  Iraq,  which  has  direct  implications  for  the  Jordanian 
economy.  On  the  domestic  front,  the  main  risk  is  related  to  difficulties  in  the  economic 
reform  process  and  to  existing  macroeconomic  vulnerabilities,  including  the  fiscal 
implications of the Syrian refugees' inflow.  

Jordan  also  remains  vulnerable  to  possible  new  disruptions  in  the  supply  of  imported 
natural gas from Egypt. Finally, there are risks stemming from a possible weakening of the 
European  and  global  economic  environment  and  an  increase  in  international  energy  and 
food prices.  

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, as 
well  as  the  cost  of  the  Operational  Assessment  of  financial  and  administrative  circuits 
conducted prior to the operation, are described in Table 3.2.1. In addition, there are costs 
for  the  European  Court  of  Auditors  and  of  possible  interventions  of  OLAF.  The 
Operational  Assessment  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  may  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 proposed legal basis for macro-financial assistance to Jordan includes a provision 
on  fraud  prevention  measures.  These  measures  will  be  elaborated  further  in  the  Loan 
Agreement,  envisaging  a  set  of  provisions  on  inspection,  fraud  prevention,  audits,  and 
recovery of funds in case of fraud or corruption. It is further envisaged that a number of 
specific  policy  conditions  will  be  attached  to  the  assistance, mainly  in  the  area  of  public 
finance  management,  with  a  view  to  strengthening  efficiency,  transparency  and 
accountability.  

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23 

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Second,  before  the  agreement  on  the  Memorandum  of  Understanding  is  reached,  the 
Commission services, with the support of duly mandated external experts, will carry out a 
new Operational Assessment of the financial circuits and administrative procedures at the 
Ministry of Finance and the Central Bank of Jordan, in order to fulfil the requirements of 
the  Financial  Regulation  applicable  to  the  general  budget  of  the  Union.  This  review  will 
determine  whether  the  framework  for  sound  financial  management  of  macro-financial 
assistance  is  sufficiently  effective  in  Jordan  by  covering  areas  such  as  management 
structure  and  organisation,  management  and  control  of  funds,  security  of  IT  systems, 
internal and external audit capacity as well as the independence of the central bank. In the 
light of this assessment, specific mechanisms applying to the management of the funds by 
the  beneficiaries  may  be  introduced  in  agreement  with  the  national  authorities.  Also,  the 
assistance will be paid to a dedicated account at the Central Bank of Jordan. 

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 03 06 – 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 03 06  

Provisioning of 
the Guarantee 
Fund 

Diff./non-diff. 
(14) 

from EFTA 
countries15 

from 
candidate 
countries16 

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 03 06  –  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 

14 
15 
16 

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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24 

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Regulation17. 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 appropriations under budget line 01 03 06  
(“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 
entered  in  year  "n"  into  the  "n+1"  draft  budget  and  effectively  paid  in  one  transaction  at  the 
beginning of the year "n+1" from the budget line "Provisioning of the Guarantee Fund" (budget line 
01 03 06). As a result, 9% (i.e. a maximum of EUR 18 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.   

New budget lines requested: not applicable. 

17 

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. 

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25 

   EN 

 
                                                 
3.2. 

Estimated impact on expenditure  

3.2.1. 

Summary of estimated impact on expenditure  

Heading of multiannual financial 
framework: 

4 

DG: ECFIN 

 Operational appropriations  

Budget line 01 03 06  Provisioning of the 
Guarantee Fund 

Commitments 
Payments 

(1a) 

(2a) 

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 

 TOTAL operational appropriations  

Payments 

Commitments 

Payments 

Commitments 
Payments 

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

(3a) 

=1+1a 
+3 

=2+2a 

+3 

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADING 4 
of the multiannual financial framework 

Commitments 

=4+ 6 

Payments 

=5+ 6 

EUR million (to three decimal places) 

Year 
201618 

Year 
2017 

Year 
2018 

Year 
2019 

TOTAL 

9 

9 

9 

9 

9 

9 

9 

9 

9 

9 

18 

18 

0.15 

0.15 

0.25 

0.25 

9.15 

18.25 

9.15 

18.25 

9 

9 

18.00 

18.00 

0.15 

0.25 

9.15 

18.25 

9.15 

18.25 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

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  (including  administrative  support  lines,  so-called  former  BA-lines),  indirect 
research, direct research. 

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26 

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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 

 Human resources 
 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 

0.164 

0.044 

9.021 

9.166 

18.395 

Payments 

0.164 

0.044 

9.021 

9.166 

18.395 

20 

Year in which implementation of the proposal starts. 

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27 

   EN 

 
 
 
 
 
 
 
 
                                                 
3.2.2.  Estimated impact on operational appropriations  

–    The proposal/initiative does not require the use of operational appropriations  

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

Indicate objectives and outputs  

Commitment appropriations in EUR million (to three decimal places) 

Year 
2016 

Year 
2017 

Year 
2018 

Year 
209 

TOTAL 

 

Type21 

r
e
b
m
u
N

Cost 

r
e
b
m
u
N

Cost 

r
e
b
m
u
N

Cost 

r
e
b
m
u
N

Cost  Total number  Total cost 

SPECIFIC OBJECTIVE NO 322 

- Output 1 

- Output 2 

- Output 3 

Operational assessment 

1 

0.10 

Ex-post evaluation 

Provisioning of the Guarantee Fund 

Subtotal for specific objective No 1 

TOTAL COST 

1 

1 

0.10 

0.10 

1 

1 

2 

2 

0.15 

9 

9.15 

9.15 

1 

1 

1 

9 

9 

9 

1 

1 

2 

4 

4 

0.10 

0.15 

18 

18.25 

18.25 

21 
22 

Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.). 
As described in point 1.4.2. ‘Specific objective(s)…’  

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28 

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3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.3.1.  Summary  

–    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 
201623 

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 524 of 
the multiannual financial 
framework  

Human resources  

Other 
of 
an 
nature 

expenditure  
administrative 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

TOTAL 

0.064 

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.

23 
24 

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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29 

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3.2.3.2.   Estimated requirements of human resources  

–    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) 

 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) 

0.19 

0.13 

0.09 

0.06 

 External personnel (in Full Time Equivalent unit: FTE)25 

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 yy26 

- 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 

0.20 

0.16 

0.12 

0.10 

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  and  the  loan 
agreement,  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 

25 

26 

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). 

EN 

30 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.4.  Compatibility with the current multiannual financial framework  

–  X  Proposal/initiative  is  compatible  with  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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31 

   EN