COMMISSION STAFF WORKING DOCUMENT Background Analysis per beneficiary country Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of macro-financial assistance to third countries in 2018
Date: 2019-07-08
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU aid, Georgia, Jordan, Moldova, Tunisia, Ukraine, economic stabilisation, macro-financial assistance, macroeconomics, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 8.7.2019  SWD(2019) 292 final  COMMISSION STAFF WORKING DOCUMENT Background Analysis per beneficiary country Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of macro-financial assistance to third countries in 2018 {COM(2019) 324 final}  
 
 
LIST OF ABBREVIATIONS 

AA 

CIS 

CPI 

Association Agreement 

Commonwealth of Independent States 

Consumer price index 

DCFTA 

Deep and Comprehensive Free Trade Area 

EC 

ECF 

EEU 

EFF 

EFTA 

EIB 

ENP 

ENI 

EU 

EUR 

FATF 

FDI 

FSAP 

European Community 

Extended Credit Facility 

Eurasia Economic Union 

Extended Fund Facility 

European Free Trade Association 

European Investment Bank 

European neighbourhood policy 

European neighbourhood instrument 

European Union 

Euro 

Financial Action Task Force 

Foreign direct investment 

Financial sector assessment programme 

GAFTA 

Greater Arabic Free Trade Area 

GCC 

GDP 

IMF 

MFA 

MoU 

OECD 

OJ 

PFM 

PPP 

SBA 

SDR 

SOE 

SREP 

USD 

TFEU 

VAT 

WTO 

y-o-y 

Gulf Cooperation Council 

Gross domestic product 

International Monetary Fund 

Macro-financial assistance 

Memorandum of understanding 

Organisation for Economic Cooperation and Development 

Official Journal of the European Union 

Public finance management 

Public-private partnership 

Stand-By Arrangement 

Special drawing rights 

State-owned enterprise 

Supervisory review and evaluation process 

United States dollar 

Treaty on the Functioning of the European Union 

Value added tax 

World Trade Organisation 

year-on-year 

1 

 
CONTENTS 

INTRODUCTION ............................................................................................................................ 3 

BACKGROUND ANALYSIS OF BENEFICIARIES OF MACRO-FINANCIAL 
ASSISTANCE  ............................................................................................................................... 4 

1.  GEORGIA.............................................................................................................................. 4 

1.1.  MACROECONOMIC PERFORMANCE .................................................................................. 4 
STRUCTURAL REFORMS ................................................................................................... 5 
1.2. 
IMPLEMENTATION OF MACRO-FINANCIAL ASSISTANCE .................................................. 6 
1.3. 

2.  JORDAN ................................................................................................................................ 8 

2.1.  MACROECONOMIC PERFORMANCE .................................................................................. 8 
STRUCTURAL REFORMS ................................................................................................... 9 
2.2. 
IMPLEMENTATION OF MACRO-FINANCIAL ASSISTANCE .................................................. 9 
2.3. 

3.  MOLDOVA.......................................................................................................................... 12 

3.1.  MACROECONOMIC PERFORMANCE ................................................................................ 12 
STRUCTURAL REFORMS ................................................................................................. 13 
3.2. 
IMPLEMENTATION OF MACRO-FINANCIAL ASSISTANCE ................................................ 14 
3.3. 

4.  TUNISIA .............................................................................................................................. 16 

4.1.  MACROECONOMIC PERFORMANCE ................................................................................ 16 
STRUCTURAL REFORMS ................................................................................................. 17 
4.2. 
IMPLEMENTATION OF MACRO-FINANCIAL ASSISTANCE ................................................ 18 
4.3. 

5.  UKRAINE ............................................................................................................................ 21 

5.1. MACROECONOMIC PERFORMANCE ..................................................................................... 21 
5.2. STRUCTURAL REFORMS ...................................................................................................... 22 
5.3  IMPLEMENTATION OF MACRO-FINANCIAL ASSISTANCE ..................................................... 23 

ANNEXES .................................................................................................................................... 25 

ANNEX 1: SELECTED MACROECONOMIC INDICATORS BY COUNTRY ......................................... 25 
ANNEX 2: MFA OPERATIONS BY DATE OF DECISION, 1990-2018 ............................................. 27 
ANNEX 2A: STATUS OF EFFECTIVE DISBURSEMENTS BY DATE OF DECISION AT END-DECEMBER 
2018 ........................................................................................................................................... 28 
ANNEX 2B: STATUS OF EFFECTIVE DISBURSEMENTS BY REGION AT END-DECEMBER 2018 (IN 
MILLIONS OF €) .......................................................................................................................... 34 
ANNEX 3: MFA AMOUNTS AUTHORISED BY YEAR, 2005-2018 (EUR MILLION) ....................... 41 
CHART 3A: MFA AMOUNTS AUTHORISED BY YEAR, 2005-2018 (EUR MILLION) .................... 41 
CHART 3B: MFA AMOUNTS AUTHORISED BY REGION, 2005-2018 (%) .................................... 41 
ANNEX 4: MFA AMOUNTS DISBURSED BY YEAR, 2005-2018 (EUR MILLION) ......................... 42 
CHART 4A: MFA AMOUNTS DISBURSED BY YEAR, 2005-2018 (EUR MILLION) ....................... 42 
CHART 4B: MFA AMOUNTS DISBURSED BY REGION, 2005-2018 (%) ....................................... 42 
ANNEX 5: OUTSTANDING AMOUNTS IN RESPECT OF OPERATIONS DISBURSED AT END-
DECEMBER 2018 ........................................................................................................................ 43 

2 

 
INTRODUCTION 

This  staff  working  document  complements  the  Commission’s  report  to  the  European 
Parliament and the Council on the implementation of macro-financial assistance (MFA) 
to third countries in 2018. 

Over 2018, two countries in the Eastern Neighbourhood, Georgia and Ukraine, benefited 
from  macro-financial  assistance  disbursements.  The  year  was  also  characterised  by 
progress in the implementation of the ongoing MFA programmes in Jordan and Tunisia 
in  the  Southern  Neighbourhood,  and  Moldova  in  the  Eastern  Neighbourhood.  For  each 
beneficiary  country,  the  report  provides  more  detailed  information  on:  (i)  their 
macroeconomic  and  financial  situation;  (ii)  progress  in  accomplishing  their  structural 
reforms agenda; and (iii) implementation of their MFA operations. 

The annexes include overview tables on the effective disbursements of MFA operations 
since 1990 by date of adoption of the decisions and by region, as well as tables on MFA 
commitment and payment amounts in 2005-2018, by year and by region.1 

1   The  document  and  the  annexes  distinguish  between  authorised  amounts,  which  refer  to  the  amounts 
made  available  to  the  beneficiary  country  as  per  the  MFA  Decision,  and  disbursed  amounts,  which 
refer to the amounts actually extended to the beneficiary country.  

3 

 
 
 
                                                           
BACKGROUND ANALYSIS OF BENEFICIARIES OF MACRO-FINANCIAL ASSISTANCE 

2 

1. 

GEORGIA 

1.1. Macroeconomic performance 

Georgia has experienced a solid recovery from the slowdown of 2015-2016. Nonetheless, 
external  vulnerabilities,  notably  a  large  current  account  deficit  and  high  external  debt, 
persist  and  are  further  amplified  by  global  and  regional  factors  such  as  the  risks 
associated with a global economic slowdown.  

In  2018,  Georgia’s  real  GDP  is  estimated  to  have  increased  by  4.8%,  driven  by  both 
domestic  and  external  demand,  although  growth  was  slower  in  the  second  half  of  the 
year. This positive trend builds on a broad-based recovery in 2017, following two years 
of  deceleration  due  to  external  shocks.  In  terms  of  demand  components,  private 
consumption  and  investment  remain  the  main  drivers  of  growth,  bolstered  by  lower 
inflation,  expansion  of  credit  and  higher  remittances.  On  the  supply  side,  Georgia’s 
economic  growth  is  mainly  fuelled  by  growth  in  services  (financial  intermediation, 
tourism and transport) and – to a lesser extent – industry (mining and manufacturing). 

The unemployment  rate  in  Georgia has been on  a downward trend since  2009 (18.3%) 
but it remains high (12.2% in the third quarter of 2018) despite economic growth.  Skills 
mismatch and large regional disparities are important challenges.  

The fiscal deficit of the general government is estimated to have been reduced from 3.9% 
GDP in 2017 to 3.3% GDP in 2018, on the back of economic growth and consolidation 
efforts.  This  also  allowed  Georgia  to  slightly  reduce  its  public  debt  to  43%  of  GDP  in 
2018, from 45% of GDP in 2017. 

Consumer price inflation slowed down to 1.5% in December 2018. This is a considerable 
moderation  compared  to  December  2017  when  inflation  of  6.7%  was  much  above  the 
central bank’s target. The deceleration in headline inflation has allowed the central bank 
to  reduce  the  refinancing  rate  from  7.25%  to  7%  in  July  2018  and  further  to  6.75%  in 
January 2019, following three increases in 2017 of a cumulative 75 basis points.  

Regarding the exchange rate, the Georgian lari has depreciated by around 3% against the 
US dollar in 2018, partly in the wake of the currency crisis in Turkey, one of Georgia’s 
foremost  trading  partners.  Given  the  decreasing  but  still  high  dollarisation  (63%  of 
deposits  and  57%  of  loans  were  denominated  in  US  dollars  as  of  end-2018),  Georgia 
remains vulnerable to exchange rate risk. 

Georgia’s balance-of-payments position remains vulnerable due to a decreasing but still 
large current account deficit (6.7% GDP in the first three quarters of 2018, compared to 
7.5% GDP in the same period of 2017) and high external debt (109% in 2018, compared 
to  113%  GDP  in  2017).  The  current  account  deficit  is  mainly  driven  by  the  trade  in 
goods deficit, which is only partly offset by the trade in services surplus and income and 
transfers  from  abroad,  including  remittances.  Foreign  direct  investment  (6.7%  GDP  in 
the  first  three  quarters  of  2018,  compared  to  10.7%  GDP  in  2017)  remains  the  main 
source of inflows. Georgia’s international reserves have been increasing in recent years, 
totalling  USD  3.3  billion  at  end-2018  (3.4  months  of  import  cover).  However,  reserve 
needs have also been increasing (partly due to additional liquidity buffers warranted by 

2 This section quotes statistics supplied by national authorities and other relevant sources. 

4 

 
                                                           
dollarisation-associated  risks  in  a  floating  exchange  rate  regime),  and  the  reserves  are 
currently below the level estimated by the IMF to be adequate. 

1.2. Structural reforms 

Georgia’s structural reform agenda focuses on improving the business environment and 
education,  as  well  as  investing  in  infrastructure.  The  Georgian  authorities  intend  to 
complement structural reforms with fiscal reforms, strengthening of the financial sector, 
as well as deepening trade relations with the rest of the world. 

In terms of improving the business environment, the Georgian authorities plan to reform 
the insolvency law and improve revenue administration, e.g. by automatically refunding 
VAT credits. The authorities are also pursuing land reform. The land registration process 
was  temporarily  simplified  in  2017-2018.  The  completion  of  land  registration  should 
facilitate transactions and make it easier to use land as collateral for borrowing, thereby 
contributing to rural development and making agricultural production more efficient. 

As part of the education reform, the Georgian authorities plan to improve the education 
system  by  setting  curriculum  standards  and  formalising  vocational  education  and 
training.  Regarding  the  latter,  a  major  milestone  was  the  adoption  of  the  Vocational 
Education  and  Training  law  in  September  2018,  which  should  allow  for  greater 
involvement  of  the  private  sector.  More  generally,  the  education  reform  should  help  to 
address  the  skills  mismatch,  which  is  one  of  the  main  structural  weaknesses  of  the 
Georgian economy and contributes to high unemployment.  

In  terms  of  investing  in  infrastructure  (highways,  ports,  airports  and  railways),  further 
progress  is  expected  to  help  Georgia  utilise  its  potential  as  a  transit  country  between 
Europe  and Asia, facilitate regional trade,  and support  the development  of the  growing 
tourism sector. Major ongoing projects include the completion of East-West and North-
South highway corridors, and the Anaklia deepwater port.  

Fiscal  reforms  aim  to  reduce  current  expenditure  and  create  space  for  more  capital 
expenditure.  The  Georgian  authorities  have  improved  the  management  of  fiscal  risks 
stemming  from  public-private  partnerships  (PPPs)  and  state-owned  enterprises  (SOEs). 
In  May  2018,  the  Georgian  Parliament  adopted  the  law  on  PPPs,  which  notably 
establishes  reporting  and  monitoring  of  government  exposure  in  PPPs.  For  SOEs,  the 
Georgian authorities have expanded the analysis of contingent liabilities associated with 
such enterprises, as part of the Fiscal Risk Statement accompanying the budget. Further 
efforts  will  include  restructuring  of  the  Revenue  Service  and  improving  the  fiscal 
framework. 

In  the  financial  sector,  the  Georgian  authorities  have  introduced  a  deposit  guarantee 
scheme and improved regulatory, supervisory and resolution frameworks for banks. The 
authorities  are  developing  the  country’s  capital  markets.  Georgia  also  introduced  a 
second  (funded)  pillar  of  the  pension  system  with  effect  from  January  2019.  The  latter 
should  not  only  increase  the  currently  low  income  replacement  rate  but  also  create 
demand  for  long-term  financial  instruments  denominated  in  the  national  currency  and 
thereby  further  reduce  dollarisation.  In  addition,  the  authorities  plan  to  introduce 
mandatory third-party vehicle insurance in 2019, which would support the development 
of the insurance sector. 

In terms of deepening trade relations, aside from its Association Agreement with the EU, 
which  includes  the  creation  of  a  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA), 
Georgia  also  has  a  Free  Trade  Agreement  (FTA)  with  China,  which  has  been  in  place 
since 2017. These agreements  complement FTAs that Georgia already had with  its key 

5 

 
 
trading partners such as Turkey and should over time contribute to the diversification of 
Georgia’s exports. 

Georgia’s national reform agenda is supported by MFA conditionality. For example, the 
conditions  for  the  2015-2017  MFA  operation  contributed  to  the  adaptation  to  DCFTA 
requirements  regarding  certificates of origin  and  competition.  Conditions of the current 
MFA operation notably require an improved public investment management framework, 
continuation of the land and education reforms, and support further de-dollarisation.  

1.3. Implementation of macro-financial assistance 

The  first  and  second  MFA  operations  for  Georgia  were  pledged  at  the  International 
Donors’  Conference  in  Brussels  in  October  2008,  following  Georgia’s  military  conflict 
with Russia in August 2008. The first operation of EUR 46 million, fully in the form of 
grants, was implemented in 2009-2010. The second operation of EUR 46 million, half in 
grants and half in loans, was implemented in 2015-2017. 

In  June  2017,  Georgia  requested  further  MFA  from  the  EU.  In  September  2017,  the 
Commission  submitted  to  the  EU  co-legislators  a  proposal  for  up  to  EUR  45  million 
(EUR 10 million in grants and EUR 35 million in loans) in further MFA to Georgia. The 
European  Parliament  and  the  Council  adopted  the  Decision  on  further  MFA  in  April 
2018.  Aside  from  covering  part  of  Georgia’s  financing  needs  and  supporting  structural 
reforms,  further  MFA  complements  IMF  funds  (USD  285  million)  under  a  three-year 
(2017-2020) Extended Fund Facility (EFF) programme with Georgia, approved in April 
2017.  The  Memorandum  of  Understanding  (MoU),  the  Grant  Agreement  and  the  Loan 
Facility  Agreement  relating  to  the  current  MFA  operation  were  signed  by  exchange  of 
letters in August 2018.  

Following  the  entry  into  force  of  the  MoU  and  the  accompanying  agreements  in 
November  2018,  the  first  instalment  of  EUR  20  million  (EUR  5  million  in  grants  and 
EUR  15  million  in  loans)  was  disbursed  to  Georgia  in  December  2018.  The  first 
disbursement  was  subject  to  the  general  political  pre-condition  for  MFA  (respect  for 
effective democratic mechanisms, including a multi-party parliamentary system, the rule 
of law and human rights) and the IMF programme remaining on track.  

The second (final) instalment of EUR 25 million (EUR 5 million in grants and EUR 20 
million in loans) is subject, aside from the political precondition and good progress with 
the  IMF  programme,  to  specific  policy  conditionality  agreed  between  Georgia  and  the 
EU in the MoU. These policy conditions aim to strengthen the Georgian economy in the 
areas  of  public  financial  management,  the  financial  sector,  social  and  labour  market 
policies,  and  the  business  environment.  The  disbursement  of  the  second  instalment  is 
tentatively planned for mid-2019, as long as Georgia meets all relevant conditions. 

6 

 
 
 
 
STATUS OF ECONOMIC REFORMS — GEORGIA 

1. Price liberalisation Prices are largely market-driven. 

2. Trade regime 

Georgia  (WTO  member  since  2000)  has  a  liberal  trade  policy,  with  no  quantitative 
restrictions on imports or exports. In June 2014, it signed an Association Agreement with 
the  EU,  including  a  deep  and  comprehensive  free  trade  area  (DCFTA)  agreement,  which 
entered  into  force  in  September  2014.  Georgia  also  has  FTAs  with  its  other  key  trading 
partners such as Turkey and China. 

3. Exchange rate regime 

There  is  a  floating  exchange  rate  for  the  lari,  with  limited  official  intervention  by  the 
National Bank of Georgia. There are no restrictions on current international transactions, in 
accordance  with  Article  VIII  of  the  IMF’s  Articles  of  Agreement,  and  Georgia  does  not 
operate capital controls. 

4. Foreign direct investment 

Georgia has a liberal regime for FDI and unlimited repatriation of capital and profits. FDI 
inflows  in  recent  years  (6.7%  GDP  in  the  first  three  quarters  of  2018)  have  consistently 
been among the highest in the region. 

5. Monetary policy 

The Central Bank’s main monetary policy objective is price stability. The Bank is currently 
applying  an  inflation-targeting  regime,  with  a  target  of  3%  for  2019-2022.  The 
effectiveness  of  monetary  policy  is  significantly  constrained  by  the  high  level  of 
dollarisation: as of end-2018, 57% of loans and 63% of deposits were denominated in US 
dollars. 

6. Public finances and taxation 

The  public  finance  management  system  is  essentially  sound  and  transparent.  Further 
needed  reforms  are  ongoing  to  strengthen  public  investment  management  and  manage 
contingent  liabilities  from  state-owned  companies  and  public-private  partnerships.  Public 
revenues  are  constrained  by  the  Constitution,  which  prescribes  a  referendum  for  the 
introduction of new taxes or the raising of tax rates (Article 94), while the budget deficit, 
public debt and public spending are capped by the Liberty Act, in force since January 2014, 
at 3%, 60% and 30% of GDP respectively. The autorities are currently reviewing the fiscal 
framework, with the aim to focus on medium-term sustanability and enforcement. 

7. Privatisation and enterprise restructuring 

Most state-owned enterprises (SOEs) have been privatised, with their number falling from 
around 1 300 in 2009 to around 100 currently. The remaining SOEs generate around 7% of 
GDP in revenue and hold liabilities worth 17% of GDP. In 2018, the Georgian government 
annouced plans to privatise postal and railway companies. 

8. Financial sector  

Georgia’s financial sector is small and dominated by banks, which hold more than 90% of 
total financial sector assets. However, banking sector credit to the economy is only around 
60%  of  GDP.  The  sector  is  concentrated,  with  the  two  largest  banks,  out  of  16  in  total, 
holding around two thirds of the assets. Georgia’s banking sector has a low-risk profile and 
has  generally  remained  resilient,  reporting  sufficient  capital  and  liquidity.  In  November 
2018, the liquidity coverage ratio was 122% and the capital adequacy ratio was around 18% 
(both ratios being in line with their average levels in 2015-2017). 

7 

 
2. 

JORDAN 

1.4. Macroeconomic performance  

The Syrian crisis has continued to act as a drag on Jordan’s economy and to weigh on its 
external  and  fiscal  positions.  Real  GDP  increased  modestly  by  an  estimated  2.1%  in 
2018,  essentially  unchanged  since  2016.  Economic  growth  remained  insufficient  to 
contain unemployment, which rose slightly to 18.7% in the fourth quarter of 2018 from 
18.5% in the fourth quarter of 2017 and 15.3% in 2016. Headline inflation rose to 4.5% 
at end-2018 from 3.3% at end-2017. This reflected higher oil prices and the impact of the 
increases in the General Sales Tax (GST) on basic products including food and bread.  

Progress  in  fiscal  consolidation  was  slow-paced.  The  overall  fiscal  deficit,  which 
includes transfers to NEPCO (the electricity company) and the Water Authority of Jordan 
and grants, narrowed to 2.4% of GDP at end-2018 from 2.6% of GDP at end-2017. This 
was  the  result  of  a  5.5%  increase  in  total  expenditure,  which  outweighed  the  4.8% 
increase in total revenues. Without grants (which increased by 26% in 2018 and reached 
3% of GDP) the fiscal deficit would amount to 5.4% at end-2018 from 5% in 2017.  

Tax  revenues  were  underpinned  by  the  increase  of  the  GST  (supported  by  an  MFA 
condition)  to  10%  for  commodities  that  were  previously  subject  to  rates  of  0%-4%.  In 
addition,  the  authorities  decided  to  lift  food  subsidies  on  bread,  to  introduce  a  levy  of 
JOD 500-JOD 1,500  (about  EUR  630  –  EUR  1,900)  on  imported  cars  and  to  raise  a 
special tax on carbonated drinks from 10% to 20%. Finally, an increase in excise tax on 
Octane-95 and 98 gasoline to 30% was enacted, as well as an increase in tax on cigarettes 
to  reach  JOD  0.20  per  pack.  A  new  income  tax  law  was  adopted  in  November  2018 
following a period of social unrest over an earlier draft of the law which had led to the 
resignation of the previous government in May 2018. Supported by an MFA condition, 
the  new  income  tax  law  broadened  the  tax  base  and  progressivity  in  personal  income 
taxation. It is expected to enhance tax revenues by 0.5% of GDP in 2019 and 1% of GDP 
in  the  years  after,  depending  also  on  efforts  to  combat  tax  evasion  and  to  raise  the 
capacity of the tax administration. Taxation on industrial sector was increased (from 14% 
to  20%)  and  a  national  contribution  tax  was  introduced  at  different  rates  depending  on 
the type of business. Jordan’s gross public debt was reduced to 94 % of GDP at end-2018 
from 94.3% of GDP a year earlier. Around 40.2% of GDP was external public debt.  

Exports grew by 3% while imports decreased by 0.8% in the first eleven months of 2018. 
In  combination  with  a  strong  increase  in  travel  receipts  (13%)  this  contributed  to  the 
narrowing of the current account deficit in the first nine months of 2018 to 9% of GDP 
(10.2%  of  GDP  excluding  grants)  from  11.2%  of  GDP  in  the  same  period  in  2017. 
However, it remains at high levels and would be even higher (11.4% of GDP) excluding 
foreign  grants,  which indicates the vulnerability  of the external  position. Foreign direct 
investment plummeted to USD 754 million in the first nine months down by 54%. 

The Central Bank of Jordan increased the re-discount rate in seven steps from 3.75% to 
5.75% between February 2017 and December 2018. This broadly mirrors the Fed’s rate 
rises, given the peg of the Jordanian dinar to the US dollar.  

Foreign  currency  reserves  fell  from  USD  14.2  billion  (equivalent  to  7.9  months  of 
imports)  at  end-2017  to  USD  13.3  billion  (or  7.3  months)  at  end-2018.  Given  the 
vulnerability  of  the  external  position,  the  elevated  risks  from  regional  conflicts,  the 
exchange rate peg and exposure to oil price shocks, the current level of reserves should 
be preserved or increased to help the country withstand possible shocks stemming from 
the factors mentioned above.  

8 

 
1.5. Structural reforms 

During  2018,  the  authorities  continued  efforts  for  the  implementation  of  their  reform 
agenda in order to reduce macro-economic imbalances and to generate employment. This 
reform  agenda  drew  broadly  from  “Jordan  2025”  —  a  10-year  economic  blueprint 
published in  May 2015  —, the “Jordan Economic Growth Plan 2018-2022”  (JEGP) — 
aiming  to  revitalise  growth  in  specific  sectors  —  and  the  National  Strategy  for  Human 
Resources  Development.  In  addition,  structural  reforms  were  complemented  by 
programmes  agreed  with  international  donors  (in  particular,  the  IMF  and  the  World 
Bank)  and  the  EU  (including  the  MFA  II).  However,  Jordan’s  efforts  delivered  only 
uneven  success  as  the  reform  process  was  challenged  by  regional  instability,  the  low 
growth environment, as well as by domestic political and social tensions, which led to the 
resignation of the government in May 2018.  

Important reforms for enhancing the growth performance were completed in 2018. Four 
by-laws for businesses’ monitoring and inspection were enacted following the adoption 
of  the  relevant  law  in  2017,  leading  to  around  94,000  inspections  in  2018.  The 
streamlining of inspection regulations is expected to reduce duplication of inspections by 
different government departments as well as to enhance monitoring of business activities 
in an effort to reduce informal employment. The law on secured lending was adopted in 
May  2018  with  relevant  by-laws  following  in  November  2018.  Along  with  the 
completion of an online Movable Collateral Registry, this reform is expected to increase 
lending to SMEs by 7% annually. The insolvency law, which was enacted in May 2018, 
enables the re-organisation of businesses (under certain deals reached with creditors) and 
regulates  the  insolvency  proceedings  of  foreign  companies  in  Jordan  according  to 
international  conventions.  The  abolition  of  pre-registration  approvals  issued  by  the 
Ministry  of  Interior  for  business  activities  that  have  low  or  no  impact  on  public  safety 
and  security  was  also  adopted  in  2018,  while  a  “Regulatory  Predictability  Framework” 
was  developed  to  improve  the  process  of  issuing  regulations  that  affect  businesses, 
including instructions and decisions. Finally, new governance frameworks were adopted 
for  Public  Investment  Management  –  Public-Private  Partnership  as  well  as  for  Venture 
Capital including specific tax treatment for the Venture Capital funds in Jordan. 

In 2018, Jordan embarked on intensive discussions with the World Bank to formulate a 
comprehensive reform plan, the so-called Five-Year Growth and Reform Matrix, aiming 
at boosting growth and containing unemployment. This reform plan was presented in the 
London  Initiative  on  28  February  2019,  an  event  that  mobilised  donour  support  and 
investments for Jordan.   

1.6. Implementation of macro-financial assistance 

As  regional  instability  deepened,  with  negative  repercussions  for  the  economy,  the 
Jordanian authorities requested a second MFA programme on 3 March 2016. In line with 
the  EUR  2.4  billion the  Commission  pledged  at  the  ‘Supporting  Syria  and  the  Region’ 
conference  in  London  on  4 February 2016,  the  Commission  adopted  a  proposal  on 
29 June 2016  for  a  decision  on  a  second  MFA  operation  to  Jordan  worth  EUR 200 
million in loans. The new MFA programme, which was approved on 14 December 2016, 
followed the successful implementation of the first MFA operation of EUR 180 million 
in loans, which was fully disbursed in 2015. 

Following  the  signature  of  the  MoU  and  the  loan  facility  agreement  of  the  MFA  II  on 
19 September 2017, the Commission released the first instalment of EUR 100 million on 
25 October 2017.  A  mission  to  review  compliance  with  the  conditions  of  the  second 
instalment  took  place  in  Amman  in  early  December  2017.  This  mission  was  then 
followed-up  through  regular  contacts  to  monitor  the  implementation  of  the  MFA 

9 

 
conditions,  which  included  important  measures  to  enhance  debt  sustainability,  improve 
the independence of external audits in the public sector, increase transparency in public 
procurement,  expand the tax base and increase progressivity of taxation, strengthen the 
social safety nets, increase employment opportunities for Syrians in Jordan and enhance 
the financial viability of the water sector). These conditions were fulfilled during the first 
semester of 2019, which enabled the approval of the release of the second disbursement 
of EUR 100 million on 24 June 2019.  

Delays have also been observed in implementing the three-year IMF programme that is 
supported by the USD 723 million Extended Fund Facility arrangement, and which was 
approved by the IMF in August 2016. The first IMF programme review (initially planned 
for December 2016) was only approved by the IMF Board in June 2017, while the IMF 
only reached staff-level agreement with the Jordanian authorities in February 2019 over 
the completion of the second review and the policies that should be implemented in the 
remaining period of the  programme. The second EFF  review  was completed on 6 May 
2019 by the IMF Executive Board after the provision by the international community of 
sufficient  financial  assurances  to  cover  Jordan’s  external  financing  gap  for  the  period 
2019-2020.  At  the  same  time,  the  IMF  Board  decided  to  extend  the  time-span  of  the 
programme until March 2020.  

The  European  Parliament,  the  Council  and  the  Commission  adopted  a  joint  declaration 
attached  to  the  decision  approving  the  second  MFA  operation.  The  declaration 
committed the Commission to submit, if appropriate, a new proposal for extending and 
increasing  MFA  to  Jordan,  on  condition  that  the  second  MFA  was  successfully 
completed, the usual preconditions were met for this type of assistance and there was an 
updated assessment by the Commission of Jordan’s external financing needs. 

10 

 
 
 
 
STATUS OF ECONOMIC REFORMS — JORDAN  

1. Price liberalisation 

Prices are largely market-driven, but there are oligopolistic conditions in several sectors. Fuel 
subsidies  were  eliminated  in  November  2012.  Electricity  tariffs  and  prices  for  some  basic 
foodstuffs  are  still  subject  to  administrative  controls.  In  2017  the  government  adopted  an 
automatic  adjustment  of  electricity  tariffs  based  on  fuel  prices  and  abolished  subsidies  on 
bread. 

2. Trade regime 

Jordan  has  a  relatively  liberal  trade  regime.  It  joined  the  WTO  in  2000  and  ratified  an 
Association Agreement with the EU in 2002. It is also one of the EU’s partner countries that 
could potentially benefit from a DCFTA agreement. It is a member of both the Greater Arabic 
Free Trade Area (GAFTA) and the Agadir Agreement and has also concluded FTAs with the 
United  States,  Syria,  the  European  Free  Trade  Association  (EFTA)  and  Singapore.  On 
19 July 2016,  the  EU  approved  a  10-year  relaxation  of  rules  of  origin  for  a  wide  range  of 
industrial  products  produced  in  18  selected  special  economic  zones,  provided  that  each 
company uses a minimum percentage of Syrian refugee labour in the production. 

3. Exchange rate regime 

Since October 1995, the dinar has been pegged to the US dollar.  

4. Foreign direct investment 

Jordan  is  largely  open  to  foreign  investment.  It  signed  the  OECD’s  Declaration  on 
International  Investment  and  Multinational  Enterprises  in  2013.  However,  there  are  still 
significant  land  ownership  restrictions,  minimum  capital  requirements  and  restrictions  on 
foreign investment in certain sectors, such as the wholesale and retail trade.  

5. Monetary policy 

The Central Bank of Jordan has become more independent. Its main monetary policy tools are 
the  certificates  of  deposit,  through  which  it  influences  retail  interest  rates  in  the  banking 
system.  The  Central  Bank  has  developed  a  credible  track  record  of  ensuring  price  stability, 
maintaining exchange rate stability and promoting growth. 

6. Public finances and taxation 

In 2007-2017, Jordan’s tax-to-GDP ratio dropped from 20.4% to 15.9%, reflecting structural 
weaknesses  in  the taxation  system:  high exemption  threshold  in  income  tax,  widespread  tax 
exemptions and capacity constraints in tax administration. There is scope for improving public 
debt  management,  including  by  developing  the  domestic  bond  market.  The  public 
procurement system is fragmented and is not in line with international standards.  

7. Privatisation and enterprise restructuring 

Privatisation started in 1986 in the aftermath of an economic crisis and has made significant 
progress since then. Nevertheless, direct state ownership in certain sectors such as mining and 
public utilities remains significant.  

8. Financial sector 

The financial sector is relatively well developed and dominated by banks, which are generally 
profitable and well capitalised. Banks have already started implementing Basel III. However, 
the narrow and shallow institutional investors’ base restricts the development of domestic 
capital markets. The Central Bank implements a financial inclusion strategy to increase access 
to and the use and quality of financial services. 

11 

 
 
 
3. 

MOLDOVA 

1.7. Macroeconomic performance 

Moldova  experienced  a  period  of  relative  stability  in  the  last  years,  as  it  continued  to 
recover  from  the  banking  crisis  in  2014-2015.  Economic  performance  is  expected  to 
remain solid over the medium term, with steady growth, moderate inflation and a sound 
fiscal situation. Economic growth was 4.0 % in 201 moderating from a 4.7% expansion 
in 2017.  

Looking  ahead,  the  economy  is  likely  to  continue  to  grow  moderately  in  the  range  of 
3.5 %-4.0 %  in  2019-2021  driven  by  private  consumption  and  public  and  private 
investment.  Downside  risks  on  macro-economic  stability  and  economic  growth  are 
increasing due to political developments ahead and following the parliamentary elections 
in  February  2019.  Economic  reforms  and  other  key  structural  reforms  such  as  in  the 
justice sector may become compromised.  

The annual inflation decreased to 0.9% in 2018, below the target corridor of 5% (± 1.5 
percentage points) and the 6.6% inflation rate of 2017. This development was supported 
by currency appreciation and effects of regulated prices such as utility tariffs and excise 
duties.  In  2019  and  over  the  medium  term,  inflation  is  expected  to  move  towards  the 
lower end of the target corridor as previous adjustments to regulated prices will fade.  

The fiscal situation has been improving significantly in the last  years. The fiscal deficit 
of 0.9% of GDP for 2018 was significantly smaller than the budget deficit target of 2.9% 
of  GDP    following  better-than-expected  revenue  performance  and  delays  in  spending. 
Revenues increased  by 8.6% compared to 2017 due to increasing economic growth and 
tax  administration  reforms.  Under-execution  of  spending  relates 
in 
implementing investment projects and uncertainty over external financing. In agreement 
with the IMF programme, the overall budget deficit for 2019 is targeted at 2.7 % of GDP. 

to  delays 

Moldova’s total external debt reached 64.6 % of GDP by end-2018, down from 72.8 % 
of  GDP  at  end-2017.  The  reduction  largely  reflects  a  continued  increase  in  capital 
inflows  following  further  economic  stabilisation.  Private  external  debt  makes  up  two-
thirds of the external debt and is primarily comprised of trade credits and intercompany 
loans.  Public  and  publicly  guaranteed  external  debt  is  held  mainly  by  multilateral  and 
bilateral donors and is mostly medium and long term and on concessional terms. 

The  current  account  deficit  has  widened  significantly  in  2018  to  10.5 %  of  GDP  from 
5.9 % in 2017. According to the IMF, the current account is projected to narrow in 2019 
to 6.3 % and then gradually decline to about 5.5 % in the medium term. The deterioration 
in  2018  reflects  rapid  growth  in  non-energy  imports  which  outpaced  strong  growth  in 
exports. Exports to the EU went  up by 17% partly due to  an increase in investment  by 
international  companies  in  Moldova  with  the  aim  to  export  manufactured  goods  to  the 
EU. At same time, exports to Russia decreased by 11%. Remittances have picked up in 
recent years, but remain below 2014 levels. 

As  a  result  of  the  crisis  in  the  financial  sector,  international  reserves  fell  by  35 % 
between  September  2014  and  February  2015,  to  USD  1.7  billion.  Following  the 
stabilisation and recovery of the foreign exchange market, the country’s central bank had 
built  up  USD  2.9  billion  in  foreign  reserves  by  December  2018,  representing  an 
estimated 5.3 months of projected imports. 

12 

 
 
1.8. Structural reforms 

The  overall  framework  for  structural  reforms  in  Moldova  is  the  commitments  made 
under  the  Association  Agreement  with  the  European  Union,  including  the  Deep  and 
Comprehensive Free Trade Agreement, and the revised Association Agenda, which sets 
out 13 key priorities for reform actions for 2017-2019. 

The  reform  progress  in  2018  has  been  mixed.  Monetary  and  fiscal  policies  have  been 
strengthened  and  substantial  structural  reforms  have  been  carried  out,  notably  in  the 
banking sector. These reforms has been at the core of the ongoing IMF programme and 
have  helped  to  restore  economic  and  financial  stability.  On  the  other  hand,  progress  in 
efforts  to  strengthen  anti-corruption  institutions  and  the  justice  sector,  including  the 
recovery of assets from the 2014-2015 bank fraud, have been more limited. 

The banking sector in  Moldova has been  going through a major restructuring since the 
banking  crisis  triggered  by  large-scale  money  laundering  and  the  USD  1  billion  bank 
fraud in 2014-2015. Unfit shareholders have been removed from a large number of banks 
and  the  control  of  the  three  remaining  systemic  banks  has  been  taken  over  by 
international actors. A new banking law entered into force on 1 January 2018. The law 
introduced  an  updated  regulatory  and  supervision  framework  in  line  with  Basel  III 
standards.  

A number of new institutions with the aim to more effectively tackling corruption have 
been established in the last years. Among them is the National Integrity Autority, which 
is responsible for verifying asset declarations and conflict of interests of public officials. 
Submissions of asset declarations are done electronically  and they are accessible to  the 
general  public.  The  operationalisation  of  the  new  institutions  has  however  been 
prolonged due to slow recruitment of key personnel and lengthy budget discussions.  

Some progress was made in 2018 on the gas and electricity interconnection projects with 
Romania.  Vestmoldtransgaz  that  operates  the  gas  transmission  network  between 
Romanian Iasi and Ungheni, including a planned pipeline to Chisinau, was purchased by 
the  Romanian  Transgaz  and  the  construction  of  the  gas  pipeline  between  Ungheni  and 
Chisinau has commenced. Moldova would still need to complete energy sector reform in 
line with the EU Third Energy Package, in particular when it comes to  unbundling gas 
and electricity transmission and distribution. 

A  strategy  of  recovering  of  the  stolen  assets  from  Banca  de  Economii,  Unibank  and 
Banca  Socială  was  presented  jointly  by  the  Prosecutor’s  Office,  the  National 
Anticorruption Centre, and the Asset Recovery Office in June 2018. The strategy outlines 
the actions that should be taken by the different responsible agencies to identify the final 
beneficiaries of the funds withdrawn from the three banks and the actions to be taken to 
recover  them.  A  total  amount  of  13.34  billion  lei  (about  EUR  670  million)  should  be 
recovered, which corresponds to the value of the emergency loans that was made by the 
National  Bank  of  Moldova  to  the  three  banks  in  2014  and  2015.  However,  legal 
proceedings against key actors involved in the bank fraud have been slow and progress in 
recovering assets, in particular from outside of Moldova has been limited. In July 2018, 
the  Moldovan  Parliament  adopted  a  package  of  laws  for  fiscal  reform.  The  package 
includes  a  list  of  measures,  including  reductions  in  tax  rates,  downgrading  of  the 
seriousness and decriminalisation of some financial-economic crimes, a capital amnesty 
(voluntary  declaration  of  assets)  and  a  tax  amnesty,  some  of  which  were  considered 
problematic  by  international  partners.  These  measures  raised  governance,  anti-money 
laundering  and  fiscal  concerns,  which  were  only  partly  addressed  by  amendments 
adopted in October 2018 following pressure from IMF, World Bank and the EU.  

13 

 
1.9. Implementation of macro-financial assistance 

On  13 September 2017,  the  European  Parliament  and  Council  adopted  the  decision  to 
provide EUR 100 million of MFA to  the Republic of Moldova.  In a joint  statement by 
the  European  Parliament,  the  Council  and  the  Commission,  adopted  together  with  the 
decision,  it  was  recalled  that,  in  light  of  the  initiatives  related  to  the  changes  of  the 
electoral  system  in  the  Republic  of  Moldova,  a  pre-condition  for  granting  macro-
financial  assistance  is  that  the  beneficiary  country  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 lifecycle of the 
macro-financial assistance and will thereby pay utmost attention to the consideration by 
the  authorities  of  the  Republic  of  Moldova  of  the  recommendations  of  relevant 
international partners. 

A  Memorandum  of  Understanding  with  the  Moldovan  authorities  outlining  a  set  of 
economic policy conditions was signed in Brussels on 24 November 2017. The MoU and 
related  documents  (loan  facility  agreement,  grant  agreement)  entered  into  force  in 
January 2018. 

The  28  policy  conditions  of  the  MoU  focus  on  five  areas  of  reform:  public  sector 
governance, governance and supervision of the financial sector, fight against corruption 
and  money  laundering,  energy  sector  reforms  and  improving  the  business  climate  and 
implementation of the DCFTA. 

In  July  2018,  the  release  of  the  first  instalment  of  MFA  of  EUR  30  million  (of  which 
EUR 20 million in loans and EUR 10 million in grants) was put on hold as the political 
pre-condition was not met, following a number of worrying developments, including the 
invalidation  of  the  results  of  the  mayoral  elections  in  Chisinau,  pointing  to  a  serious 
democratic backsliding in Moldova.  

In September 2018, Commissioner Hahn handed over a list of actions to Moldovan PM 
Pavel Filip to be taken by the Moldovan authorities ahead of the parliamentary elections 
of  24  February  2019  to  protect  democratic  standards  and  keep  the  focus  on  the 
Association  Agreement  related  reforms.  The  European  Union  expects  the  Moldovan 
authorities to take urgent and immediate action to rectify the ongoing deterioration of the 
rule of law and democracy in the country. In particular the EU called for  parliamentary 
elections held in February 2019 to be conducted in a credible, inclusive and transparent 
manner and expects the formation of a new government in ways that represent the results 
of  the  elections  and  does  not  rely  on  support  from  members  prosecuted  for  the  2014 
banking fraud.  

On  29  June  2018,  the  IMF  completed  the  third  review  of  the  programme,  which  made 
available SDR 24 million (about USD 33.8 million). However, the programme was put 
on  hold  in  the  autumn  following  the  introduction  of  a  capital  amnesty  and  a  series  of 
costly reforms with an uncertain fiscal impact. The completion of the fourth review will 
depend  on  the  new  government  delivering  on  a  number  of  prior  actions  and  structural 
benchmarks, as identified during the technical mission of 25-29 March 2019. 

The disbursement of the first MFA instalment  will therefore continue to be put on hold 
until political pre-conditions are considered to be met.  

14 

 
 
 
STATUS OF ECONOMIC REFORMS — REPUBLIC OF MOLDOVA 

1. Price liberalisation 
Most prices are market-driven, but regulated prices continue to exist for electricity, natural 
gas,  water  and  sanitation,  housing  and  medical  services  and  rail  and  urban  passenger 
transport. 

2. Trade regime 
Moldova (a WTO member since 2001) has a liberal trade regime. The EU and the Republic 
of  Moldova  have  developed  a  close  trading  relationship  over  the  years.  This  led  to  the 
conclusion  of  an  Association  Agreement,  including  a  DCFTA,  which  was  signed  on 
27 June 2014 and entered fully into force on 1 July 2016. 

3. Exchange rate regime 
Moldova’s  vulnerability  to  external  shocks  requires  it  to  have  a  flexible  exchange  rate 
arrangement that serves as an efficient absorber of such shocks. In this context, the National 
Bank of Moldova follows flexible exchange rate policies and intervenes on the market to 
smooth sporadic volatility.  

4. Foreign direct investment 
There  are  no  controls  on  inward  investment.  Net  FDI  inflows  are  projected  to  remain 
moderate, averaging USD 150 million per year in 2018-2020. 

5. Monetary policy 
As  part  of  the  medium-term  monetary  policy  strategy  adopted  in  December  2010,  the 
central bank targets inflation of 5 % annually (measured by the consumer price index), with 
a  possible  deviation  of  ±  1.5  percentage  points.  This  is  considered  to  be  optimal  for  the 
growth and development of Moldova’s economy over the medium term. 

6. Public finances and taxation 
The fiscal reform package adopted in July 2018 included the introduction of a 12% flat rate 
income tax (the earlier system had two levels 7% and 18%). Social contributions were also 
cut from 23% to 18%.  Further revenue measures include significantly increasing the excise 
rates on tobacco, petroleum and alcoholic products. A reform of the VAT system is planned 
for 2019, including an overhaul of the VAT rates and exemptions. 

7. Privatisation and enterprise restructuring 
Moldova has gradually sought to privatise state-owned assets and enterprises. In 2018, the 
national airliner Air Moldova, the gas transmission company Vestmoldtransgaz, a tobacco 
producer  and  a  number  of  other  smaller  properties  were  privatised.  The  Law  on  State-
Owned Enterprise and Municipal Enterprise adopted in the end of 2017 aims to strengthen 
governance and transparency of SOEs. 

8. Financial sector 
The financial sector reform is one of the major successes of the last reform period. Major 
achievements  include  the  liquidation  of  the  three  banks  involved  in  the  2014  bank  fraud 
(while  investigation  and  asset  recovery  of  the  fraud  has  been  less  successful)  and 
strengthened  governance in  the three  banks  that  was  put  under  special supervision  by the 
central bank in June 2015 (followed by sales of suspended shares to international actors). A 
strengthened  regulatory  and  supervisory  framework  for  banks  (aligning  with  Basel  III 
standards)  and  non-financial  institutions,  particularly  in  the  insurance  sector,  has  been 
adopted. The impact of these reforms will depend on their implementation. 

15 

 
 
4. 

TUNISIA 

1.10. 

Macroeconomic performance 

The  Tunisian  economy  registered  a  moderate  expansion  in  2018,  with  GDP  growth 
estimated  at  2.5%  throughout  the  year  (against  1.9%  in  2017,  and  nearly  no  growth  in 
2016 and 2015), mostly thanks to an excellent performance of the agricultural sector. The 
rest  of  the  economy  did  not  show  particular  signs  of  dinamism,  as  also  proven  by  the 
growing  rate  of  unemployment  (15.5%  at  the  end  of  2018  against  15.4%  one  year 
earlier). 

Inflation  grew  rapidly  in  the  first  half  of  2018,  from  a  level  of  6.4%  in  January  to  a 
decade-high level of 7.8% in June and slightly declined to 7.5% by the end of the year. 
As a response to the mounting inflation, the Central Bank of Tunisia increased its base 
interest rate twice in 2018, first in April (from 5% to 5.75%) and then in June (to 6.75%), 
keeping the door open for possible further increases. 

The fiscal deficit in 2018 was estimated at around 5.3% against an initial target of 4.9%. 
This deviation can be largely attributed to the increase in oil prices throughout the year, 
which  implied  higher  spending  on  energy  subsidies3  than  foreseen  in  the  2018  Budget 
Law. According to the complementary Budget Law for 2018, the wage bill should have 
reached  about  40%  of  total  expenditures  throughout  the  year,  or  about  14%  of  GDP 
(41.8% of total expenditures and 14.8% of GDP in 2017). Substantial reductions in the 
wage  bill  (at  least  1%  of  GDP)  were  expected  from  the  implementation  of  early 
retirement  and  voluntary  resignation  programmes,  however,  they  had  a  much  lower 
impact on public finances (about 0.4-0.5% of GDP). 

Total public debt is expected to have reached a level of 72% of GDP at the end of 2018, 
from 70% of GDP at the end of 2017. Debt service costs had once again a considerable 
impact  on  total  expenditures  in  2018.  At  the  end  of  August  2018  debt  service  costs 
amounted to  TND 5 billion (about  EUR 1.6 billion), 7.4% lower than one  year earlier; 
however, the 2018-end figure as envisaged by the Complementary Budget Law for 2018 
is TND 7.8 billion (about EUR 2.3 billion), 11.9% higher than at the end of 2017. 

The  balance  of  payments  deteriorated  in  2018  and  the  current  account  deficit  reached 
11.2%  of  GDP  at  the  end  of  2018,  against  10.2%  one  year  earlier.  The  trade  account 
deficit  reached  about  16.3%  at  the  end  of  November  2018,  up  from  15%  a  year  later. 
Growing  volumes  of  imported  energy,  coupled  with  the  increasing  price  of  oil  and  the 
depreciating dinar, translated into a widening import bill overall, which was not offset by 
exports in spite of the latter’s increasing prices. The tourism sector experienced a revival 
in  2018  while  remittances  from  abroad  decreased  slightly  throughout  the  year.  The 
combined inflow was 22% higher than in 2017. 

The external debt continued growing in 2018, and is expected to have reached about 85% 
of GDP at  the end of the  year, against 80.1% at the end of 2017.  In 2018, most of the 
external  financing  came  from  concessional  funding  from  IFIs  and  bilateral  donors.  In 
October,  Tunisia  issued  Eurobonds  for  EUR  500  million  with  a  yield  of  6.75%  and  a 
maturity of 5 years. 

There was a continuous deterioration of foreign reserves, which after a record low of 69 
days of imports in September, ended at 80 days of imports in December 2018 (against 90 
days at the end of 2017). In 2018 the Tunisian dinar depreciated by 17% against the USD 
and by 14% against the EUR. 

3 The Complementary Budget Law envisaged an 80% increase in such expenses in 2018 overall. 

16 

 
                                                           
1.11. 

 Structural reforms 

A  number  of  structural  challenges  and  imbalances  hinder  the  Tunisian  economy  to 
develop its potential, despite a higher degree of sector diversification than other middle-
income  countries.  Economic  activities  are  mostly  clustered  along  the  coast,  leaving  the 
interior  regions  less  economically  and  social  developed.  A  perceived  excess  of 
bureaucracy  acts  as  a  discouraging  factor  to  private  investment  while  insufficient 
measures  are  taken  to  halt  the  development  of  the  informal  sector.  The  civil  service 
persists  as  the  most  attractive  employment  option,  in  turn  weighing  down  on  private 
entrepreneurship.  

The  Tunisian  government  has  committed  to  an  ambitious  plan  of  reforms,  aimed  to 
address most of the bottlenecks hampering growth in the country. However, the reform 
process is progressing at a moderate rate, also concerning some measures that are linked 
to the implementation of MFA II. 

The  2018  Budget  Law  introduced  a  number  of  fiscal  policy  changes.  The  three  VAT 
rates were  all increased  by one  percentage point (6 to  7%; 12 to  13%; and 18 to  19%) 
although initial plans to streamline the VAT system, including through the elimination of 
the middle rate, were not further pursued. The 2018 Budget Law also revised corporate 
income  tax  rates  in  order  to  promote  private  investments,  specifically  in  a  number  of 
sectors considered as key to promote sustainable growth and regional development. 

Work towards the enhancement of state-owned enterprises’ (SOEs) efficiency progressed 
with the finalisation of performance-based contracts between the government and four of 
the five largest SOEs in early 2018.  

A  new  law  aimed  to  reform  the  social  security  system  (Loi  Amen)  was  adopted  on  16 
January 2018. It introduces a conceptual change in the legal approach to social security, 
elevating it from a "privilege" to a "right by law" of the most disadvantaged families. At 
the  same  time,  fieldwork  for  the  creation  of  a  comprehensive  database  of  low-income 
families continued, with the ultimate aim to better target the currently complex system of 
social  allowances.  The  government  also  increased  by  TND  30  (about  EUR  10)  the 
monthly  social  subsidy  for  lower-income  households,  and  introduced  a  top-up  for 
pensions below the minimum wage. 

The  government  proceeded  in  modernising  the  public  procurement  system,  through 
extending,  since  September  2018,  the  use  of  the  online  procurement  portal  to  all 
ministries,  SOEs and parastatal  entities  as well as opening access  to  foreign companies 
through an online platform. 

In  April,  the  Parliament  adopted  a  “StartUp  Act”  providing  for  a  number  of  incentives 
aimed at encouraging local investment by young entrepreneurs.  

Negotiations  on  the  EU-Tunisia  Deep  and  Comprehensive  Free  Trade  Agreement 
(DCFTA) progressed in 2018 through two negotiation rounds, in May and December. At 
the end of November 2018, the Government introduced, with no previous notice to trade 
partners, the obligation of providing import authorisations for a number of products, as a 
measure to curbe the widening trade deficit.  

17 

 
 
 
1.12. 

Implementation of macro-financial assistance 

In  February  2016,  following  a  request  from  Tunisia,  the  Commission  submitted  a 
proposal to the European Parliament and the Council to grant a second MFA operation to 
Tunisia  (MFA  II)  for  a  maximum  of  EUR  500  million,  in  the  form  of  medium-term 
loans, which would follor a first MFA operation implemented between 2014 and 2017. 
The legislative decision  on this new operation was  adopted in  July 20164  and the draft 
MoU was agreed on with the Tunisian authorities in December 2016.  

The MoU and the loan facility agreement were signed on 27 April 2017. Following the 
Tunisian  Parliament’s  ratification  on  28 July 2017,  the  MoU  entered  into  force  on 
instalment  of  EUR  200  million  was  disbursed  on 
11 August 2017.  The  first 
25 October 2017 and was only conditional on good progress under the IMF’s Extended 
Fund Facility. 

The  second  and  third  instalments  of  MFA  II  are  conditional  on  a  number  of  measures, 
listed in the MoU, whose focus spans from public finance management and fiscal policy, 
through  the  social  security  system  and  the  labour  market,  to  the  improvement  of  the 
business climate. A Commission monitoring mission in January 2018 evaluated most of 
the  conditions  required  for  disbursing  the  second  instalment  as  fulfilled.  The  main 
obstacle to the disbursement of the second instalment was the adoption of the Law on the 
Court of Auditors (“Loi  organique sur la Cour des Comptes”)  –  which was  adopted by 
the  Tunisian  Parliament  on  15  April  2019,  and  which  should  ensure  the  administrative 
and financial independence of the Court of Auditors.  

The  4th  review  of  the  IMF  programme  under  the  Extended  Fund  Facility  (EFF)  was 
approved  by  the  Board  on  28  September  2018,  based  on  the  attainment  of  all 
Quantitative  Performance  Criteria,  on  the  fulfilment  of  two  out  of  three  Structural 
Benchmarks,  and  on  the  engagements  taken  by  the  Tunisian  authorities  to  implement 
energy  and  fuel  price  increases  in  the  remainder  of  the  year  (prior  actions).  The  5th 
review mission, initially planned for November 2018, finally took place in March/April 
2019.  A  staff-level  agreement  was  reached  on  17  April  2019.  The  authorities  and  IMF 
staff agreed on policy and reform steps to ensure that the budget deficit target of 3.9% of 
GDP (before grants) for 2019 could be met to contain the high public debt and elevated 
financing  needs.  Completion  of  the  Review  was  subject  to  the  approval  by  the  IMF’s 
Executive Board which finally took place on 12 June 2019. The Board also approved the 
authorities’ request for a number of waivers of non-observance, granted on the ground of 
the  corrective  measures  undertaken  by  the  authorities.  Tunisia  will  now  benefit  from  a 
sixth disbursement of approximately SDR  177 million  (around USD 245 million). This 
will  bring  total  disbursements  under  the  EFF  to  about  USD  1.6  billion  and  will  help 
unlock additional financing from Tunisia’s other external partners. 

Following the fulfillment of the policy commitments agreed with the EU during the first 
semester of 2019, the EU approved the release of the second disbursement of EUR 150 
million  on  24  June  2019.  The  Commission  expects  the  disbursement  of  the  third 
instalment of the MFA II to take place by end of 2019. 

4    Decision No 1112/2016/EU of the European Parliament and of the  Council of 6 July 2016 providing 

further macro-financial assistance to Tunisia (OJ L186, 9.7.2016). 

18 

 
 
                                                           
The  Joint  Communication  of  29 September 2016  of  the  HRVP  and  the  Commission  to 
the  European  Parliament  and  the  Council  also  envisaged  the  possibility  of  granting 
further  macro-financial  assistance  to  Tunisia,  if  appropriate,  on  the  basis  of  an 
assessment of the country’s economic and financial needs.  

19 

 
 
 
STATUS OF ECONOMIC REFORMS — TUNISIA  

1. Price liberalisation 

Most  prices  are  market-driven,  but  regulated  prices  exist  for  fuel,  electricity,  transport  and 
food  products.  The  government  started  reducing  its  fuel  subsidies  in  2017,  and  continued 
throughout 2018 with price hikes in January, March, June, August and September. Electricity 
and  gas  prices  also  rose,  according  to  the  same  principle  of  reducing  state  subsidies,  in 
January, June and August, and September.   

2. Trade regime 

Tunisia  joined  the  WTO  in  1995  and  was  the  first  Mediterranean  country  to  sign  an 
Association  Agreement  with  the  EU  in  1995.  Tariff  dismantling  under  the  Agreement  was 
completed  in  2008.  In  April  2016,  negotiations  started  for  an  EU-Tunisia  DCFTA.  The 
second and third negotiations rounds took place respectively in May and December 2018. In 
November  2018, 
import 
authorisations for a number of industrial products, aimed at curbing imports in the face of a 
worsening trade balance. 

the  Tunisian  government 

the  requirement  for 

introduced 

3. Exchange rate regime 

The Central Bank of Tunisia changed its operational framework for exchange rate policy in 
2012  to  make  rates  more  flexible.  The  Central  Bank  has  more  recently  moved  towards  a 
greater  exchange  rate  flexibility  by  implementing  competitive  multiple-price  foreign 
exchange auctions since August 2018.  

4. Foreign direct investment 

Since 1972, FDI has benefited from incentives for exporting enterprises. A major part of the 
government’s  2016-2020  development  plan  regards  increasing  the  attractiveness  of  the 
Tunisian business climate for both local and foreign investors, and started being implemented 
with the adoption of the new Investment Law in 2016. In 2018, the implementation work of 
the law continued, namely through the operationalisation of the Tunisia Investment Authority 
in February 2018. The 2018 Budget Law also reduced the gap in taxation between on-shore 
and off-shore companies. 

5. Monetary policy 

The  Central  Bank  is  independent  and  its  mandate  is  to  ensure  price  stability.  Since  the 
revolution,  the  Bank’s  independence  and  good  governance  has  been  strengthened  through 
new  legislation.  Throughout  2018,  the  Bank  tightened  its  policy  in  order  to  contrast  the 
mounting inflation.  

6. Public finances and taxation 

Tunisia’s public finances keep being characterised by an ingent degree of spending in salaries 
and  subsidies,  which  are  not  sufficiently  compensated  by  the  relatively  heavy  fiscal burden 
(tax  revenues  make  up  over  20%  of  GDP).  The  government  committed  to  undertake  fiscal 
consolidation in order to gradually reduce the annual fiscal deficit until a level of 3% in 2020. 
Changes in corporate and income tax rates, as well as in the VAT system, were implemented 
in  2018.  A  number  of  measures  aimed  at  reducing  tax  evasion  are  in  place,  although  their 
effectiveness is low. 

7. Privatisation and enterprise restructuring 

The  privatisation  and  restructuring  of  public  banks  and  state-owned  enterprises  (SOEs)  has 
long  been  under  discussion,  and  little  progress  has  been  made  in  that  direction,  mainly 
because  of  political  opposition,  especially  by  trade  unions.  Nevertheless,  a  process  of 
performance optimisation of both public banks and SOEs has recently been undertaken by the 
authorities. 

20 

 
 
8. Financial sector 

Since the Revolution in 2011, Tunisia’s financial sector has been affected by a progressively 
growing  demand  for  credit  and  high  rates  of  non-performing  loans  (NPLs),  which  in  turn 
increased  its  liquidity  needs.  Both  public  and  private  banks  have  therefore  increasingly 
resorted  to  recapitalisation  by  the  Central  Bank  of  Tunisia.  However,  in  the  last  few  years 
banks managed to improve their profitability and to better manage risks, also enabling a slight 
reduction  in  the  overall  rate  of  NPLs  (from  16%  in  2015  to  14%  in  2017).  The  process  of 
restructuring of the three largest public banks was launched in 2017, but has not yet taken off. 
Following  a  negative  evaluation  by  the  Financial  Action  Task  Force  (FATF)  on  Tunisia’s 
compliance  with  anti-money  laundering  and  counter-terrorism  financing  practices  (AML-
CTF)  practices,  the  Tunisian  authorities  have  undertaken  measures  to  address  a  number  of 
technical compliance deficiencies identified in its financial sector. 

21 

 
 
 
 
 
5. 

UKRAINE 

5.1. Macroeconomic performance  

Ukraine’s  economy  has  returned  to  growth  after  the  deep  recession  in  2014-15  and 
accelerated in 2018. After 2.5% in 2017, real GDP growth for the whole 2018 was 3.3%. 
In terms of demand components, growth was mainly driven by strong investment activity 
(+14% in 2018) and consumption (+7%). The situation in the labour market has recently 
improved: the survey-based unemployment rate fell to 8.6% in January-September 2018 
from 9.4% a year before.  

Consumer price inflation slowed down from 13.7% in December 2017 to 8.6% in March 
2019,  a  substantial  improvement  but  still  above  the  target  range  set  by  the  Monetary 
Policy Guidelines for end 2018 (6% ±2 percentage points). Disinflation was mainly due 
to contractionary monetary policy of the central  bank, which raised its key interest rate 
by  a  cumulative  6-  percentage  points  since  October  2017  to  17.5%  now.  Recently  the 
central bank pointed to a number of disinflationary factors which may trigger relaxation 
of  monetary  policy  in  the  future:  prudent  fiscal  policy,  slower  wage  growth  forecasts, 
stable  currency,  decreasing  global  energy  prices.  Regarding  the  exchange  rate,  the 
hryvnia appreciated in 2018 (by 8% against the EUR) and then by another 3% in the first 
quarter of  2019   

Ukraine has made significant  progress  in the consolidation of its public finances in  the 
last years. The fiscal deficit in 2018 was 2% of estimated GDP, below the target of 2.3% 
of GDP. The government  financed the 2018 budget  deficit with  USD 1.7 billion of net 
external borrowing and USD 0.4 billion of net domestic borrowing, as well as with some 
cash leftovers. Privatization revenues were close to zero. Ukraine’s public debt decreased 
from  72%  of  GDP  at  end-2017  to  61%  of  GDP  at  the  end  of  2018,  reflecting  strong 
nominal GDP growth (denominator effect) and a slight appreciation of UAH vs. USD.  

Ukraine’s foreign trade balance saw a significant adjustment in the wake of the crisis in 
2014-15, but is now widening again. In 2018, imports, spurred by strong investment and 
consumer  demand,  increased  by  14%  year-on-year;  exports  increased  by  9%.  The 
widening  of  the  trade  deficit  was  counterbalanced  by  increasing  remittances  from 
Ukrainians  working  abroad,  while  the  balance  of  investment  income  was  strongly 
negative. Altogether the current account deficit widened significantly, to USD 4.7 billion 
in  2018  (from  USD  2.4  billion  in  2017).  In  terms  of  the  financial  account,  net  FDI 
remains low, while foreign long-term loans taken out by Ukrainian companies increased 
substantially.  Ukraine’s  international  reserves  amounted  to  USD  20.8  billion  on  1 
January 2019, an equivalent of 3.5 months of imports. 

Looking ahead, economic growth is expected to slow down from 3.3% in 2018 to 2.5%-
2.7%  in  2019  and  around  3%  in  2020.  Lower  growth  in  2019  is  expected,  due  to  a 
slowdown  of  investment  activity  and  private  consumption,  driven  by  several  factors: 
uncertainty related to the presidential5 and parliamentary elections, continuation of tight 
fiscal and monetary policy, slower increase in wages and remittances. The Central Bank 
expects inflation to decline to 6.3% at the end of 2019, slightly above the medium-term 
inflation target range of 5% +/- 1 percentage points.  A key short-term economic policy 
challenge  concerns  government  financing  in  light  of  an  upcoming  peak  in  public  debt 

5 Vladimir Zelensky, an actor and producer not involved in politics so far, won the presidential elections 

held in March and April 2019.  

22 

 
                                                           
payments  in  2019  and  2020.  Continued  support  from  the  EU,  the  IMF  and  other 
Ukraine’s international partners therefore remains essential.  

5.2. Structural reforms 

With  the  political  transition  in  2014,  Ukraine  embarked  on  an  ambitious  and  wide-
ranging  reform  programme.  Despite  the  difficult  external  environment  and  significant 
internal  challenges,  Ukraine  managed  to  push  through  reforms  in  a  variety  of  sectors, 
notably  as  part  of  the  policy  programmes  attached  to  the  EU  MFA,  the  IMF  and  the 
World  Bank  assistance.  Following  a  slowdown  in  reform  momentum  in  2016-17,  the 
year 2018 saw renewed reform activity.  

In the field of public financial management, the authorities decided in December 2018 to 
consolidate current central and regional tax and customs units of the State Fiscal Service 
into two separate legal  entities:  a State Tax Service and a Customs Service. The actual 
reorganisation  of  these  services  will  take  place  in  2019.  In  order  to  increase  the 
transparency of the tax system, the Ministry of Finance started issuing clarifications on 
tax  legislation  where  there  is  a  risk  of  inconsistent  interpretation.  Moreover,  new  laws 
adopted in 2018 strengthened fiscal  governance by introducing medium-term budgeting 
and by strengthening program-based budgeting.   

As  regards  the  fight  against  corruption,  a  law  establishing  the  High  Anti-Corruption 
Court,  considered  as  a  missing  element  in  the  anticorruption  enforcement  chain,  was 
adopted in June 2018. The court is expected to become operational in the course of 2019. 
The  authorities  also  made  progress  towards  making  the  compulsory  electronic  asset 
declaration system for public officials fully operational. They also amended the company 
registration  process  to  ensure  effective  verification  of  information  on  companies’ 
beneficial ownership.  

In  order  to  improve  corporate  governance  of  Ukrainian  state-owned  enterprises,  a 
number  of  independent  supervisory  boards  have  been  established  in  several  major 
enterprises in banking, energy, transport and postal sectors, and further supervisory board 
members  are  being  selected.  In  the  absence  of  successful  large-scale  privatisations, 
Ukraine has improved its legal framework for privatisation and has launched a successful 
electronic platform of sales of small companies and assets, ProZorro.Sale. 

In  the  energy  sector,  the  authorities  and  the  energy  regulator  progressed  on 
implementation  of  the  electricity  market  law,  aimed  at  introducing  market  rules  in  this  
sector. In the gas sector, household gas tariffs were increased considerably in November 
2018 to better reflect international gas prices.  

The  situation  of  the  financial  sector  continues  to  improve,  with  improving  capital  and 
liquidity  ratios,  as  well  as  profitability.  The  very  high  share  of  non-performing  loans 
(55%) remains a major challenge; a new insolvency law was approved in October 2018. 
In order to improve governance in state-owned banks (which account for more than half 
of  the  banking  system’s  assets),  a  law  was  adopted  in  July  2018  that  will  establish 
independent supervisory boards in these banks.  

Among the social policies, substantial progress has been made in the reform of healthcare 
financing,  with  a  launch  of  the  National  Health  Service  which  signed  contracts  with 
primary health providers. Household subdidy reforms progressed well with the launch of 
a subsidy monetisation (subsidies will be paid from 2019 to households and no more to 
utilities) and an eligibility verification. Ukraine also started a pension reform in 2017, in 

23 

 
order to make the system less costly for the state while ensuring more adequate pension 
income for the majority of retirees.   

5.3  Implementation of macro-financial assistance 

In January 2015, the Commission proposed a MFA operation (the third one since 2014) 
consisting  of  loans  of  up  to  EUR  1.8  billion,  to  be  made  available  in  three  equal 
instalments  of  EUR 600 million.  This  was  done  against  the  backdrop  of  Ukraine’s 
rapidly  deteriorating  economic  situation  and  weak  balance-of-payments  position 
resulting  from  the  armed  conflict  in  the  eastern  part  of  the  country.  The  co-legislators 
adopted the Commission proposal in April 2015. Two  instalments of EUR 600 million 
each were disbursed to Ukraine in July 2015 and in April 2017. A third instalment of the 
same  amount  was  also  available  to  Ukraine  under  this  MFA  programme.  Ukraine 
fulfilled  17  of  the  21  policy  commitments  attached  to  this  disbursement,  including 
reforms in public finance management, public administration, the energy sector and the 
judiciary.  However,  Ukraine  had  not  implemented  several  measures  when  the  validity 
period of the MFA expired. These included two measures to fight corruption, notably the 
introduction of a mechanism to verify asset declarations submitted by public officials. As 
a result, the third instalment of MFA was cancelled in January 2018. 

In November 2017, Ukraine requested additional MFA from the EU to cover its external 
financing  gap  and  support  the  authorities’  reform  agenda.  Following  an  assessment  of 
this request, the Commission proposed a fourth Macro-Financial Assistance programme 
(MFA IV) in March 2018 of up to EUR 1 billion in the form of low-interest loans. The 
European  Parliament  and  the  Council  adopted  this  proposal  in  July  2018.  The 
Commission  and  Ukraine  signed  the  Memorandum  of  Understanding  (MoU)  –  setting 
specific policy conditions of the Macro-Financial Assistance programme – and the Loan 
Agreement in September 2018. Ukraine ratified the two documents in November 2018.  

In October 2018, Ukraine and the IMF agreed at staff level on a new 14-month Stand-By 
Arrangement  of  USD  3.9  billion.  The  new  SBA  replaces  Ukraine’s  previous  Extended 
Fund  Facility  (EFF)  programme  and  provides  an  anchor  for  prudent  economic  policies 
during  2019,  with  presidential  and  parliamentary  elections  scheduled  for,  respectively, 
March  and  October  of  that  year.  The  IMF  Board  approved  in  December  2018  the  new 
Stand-by  Arrangement,  with  a  first  disbursement  of  USD  1.4  billion.    The  first  review 
mission  of  the  IMF  in  May/June  2019  may  unblock  the  second  disbursement  (around 
USD 1.3 billion). 

The first  disbursement of EUR 500 million  was made in  December 2018 after Ukraine 
fulfilled the policy conditions, which covered the areas of fight against corruption, public 
finance  management,  governance  of  state-owned  companies  and  privatisation  of  small 
companies.  Notably,  as  part  of 
implementation  effort  of  MFA  IV  first 
trancheconditions,  Ukraine  made  significant  progress  in  the  areas  of  anti-corruption 
policy  that  had  blocked  the  final  disbursement  under  MFA  III.  The  second  instalment  
(another  EUR  500  million)  can  be  disbursed  in  2019,  if  the  relevant  conditions  are 
fulfilled. 

the 

24 

 
 
 
STATUS OF ECONOMIC REFORMS — UKRAINE 

  Price liberalisation 

While most prices are determined freely, regulated prices remain for utilities (particularly gas 
and electricity for households) and public transport. As part of the IMF programme,  Ukraine 
has committed to move to market pricing on gas retail market from 2020. 

  Trade regime 

Ukraine joined the WTO in May 2008. The EU-Ukraine Association Agreement entered into 
force on 1 September 2017; the provisions on the Deep and Comprehensive Free Trade Area 
(DCFTA) had been provisionally applied since January 2016. 

  Exchange rate regime 

Following the decision to abandon the currency peg in February 2014, Ukraine’s central bank 
has  implemented  a  managed  float  regime.  In  2018,  the  central  bank  continued  to  ease  the 
various administrative measures that were introduced to contain the currency crises from 2014 
and  early  2015.  The  central  bank  intervenes  on  the  foreign  exchange  market  only  to  reduce 
exchange rate volatility and replenish its reserves. 

  Foreign direct investment 

Some restrictions on FDI-related flows exist, such as a ban on the purchase of agricultural land. 
Capital controls that affect foreign investment activity persist, despite their gradual elimination. 
The inflow of FDI was around 2% of GDP in 2018. 

  Monetary policy 

The  central  bank’s  primary  objective  is  to  achieve  and  maintain  price  stability  under  an 
inflation  targeting  framework.  Due  to  contractionary  monetary  policy  of  the  central  bank  in 
2018, inflation  was reduced from 13.7% at the end of 2017 to 9.8% at the end of 2018. The 
inflation target for the end of 2019 is 5% +/- 1 percentage point.   

  Public finances and taxation 

Ukraine  has  made  significant  progress  in  the  consolidation  of  its  public  finances  in  the  last 
years;  the  fiscal  deficit  in  2018  was  2%  of  GDP.  General  government  expenditures  remain 
high, including a heavy burden of spendings on pensions, defence and public debt services. On 
the revenue side, the tax base has been gradually widened; nonetheless, revenue mobilisation 
and tax administration reform remain high on the agenda. 

  Privatisation and enterprise restructuring 

Despite ambitious privatisation plans, no major sales of state assets took place in 2018. Ukraine 
has,  however,  improved  its  legal  framework  for  privatisation  and  launched  a  successful 
electronic platform of sales of small companies and assets, ProZorro.Sale. In order to improve 
corporate governance of state-owned enterprises, a number of independent supervisory boards 
have been established in several major enterprises, and further supervisory board members are 
being selected.  

  Financial sector 

The situation of the financial sector continues to improve, with improving capital and liquidity 
ratios and better supervision standards. The very high share of non-performing loans (55%) and 
the quality of governance of state-owned banks remain challenging.  

25 

 
 
 
 
ANNEXES 

Annex 1: Selected macroeconomic indicators by country 

MFA  complements  and  is  conditional  on  the  existence  of  an  adjustment  and  reform 
the  International  Monetary  Fund  (IMF).  To  facilitate 
programme  agreed  with 
comparability,  this  section  thus  quotes  the  latest  IMF  data  available  for  the  selected 
macroeconomic indicators.6 

6 These may vary from the statistics quoted in the country-analysis section of this document. 

26 

20152016201720182019Real GDP(% change)2,92,84,84,74,6Inflation (end of period) (% change)4,91,86,71,53,0Unemployment rate(% labour force)14,114,013,9n/an/aVolume of imports of goods and services(% change)-12,70,20,93,911,1Volume of exports of goods and services(% change)-19,04,815,012,98,7General government net lending/borrowing(% of GDP)-1,3-1,6-0,5-0,9-1,7General government gross debt(% of GDP)41,444,445,144,545,0Current account balance(% of GDP)-12,6-13,1-8,8-7,9-8,0Gross official reserves(months of imports)3,53,43,43,73,7Total gross external debt(% of GDP)86,192,096,493,095,0Sources: IMF World Economic Outlook Database (April 2019), IMF Regional Economic Outlook (April 2019)Forecast years: 2017-2019Georgia20152016201720182019Real GDP(% change)2,42,02,12,02,2Inflation (end of period) (% change)-1,60,83,23,62,5Unemployment rate(% labour force)13,115,318,118,3n/aVolume of imports of goods and services(% change)-3,2-4,27,01,81,3Volume of exports of goods and services(% change)-7,21,12,33,35,0General government net lending/borrowing(% of GDP)-8,5-3,7-3,7-4,8-4,0General government gross debt(% of GDP)92,493,894,394,294,8Current account balance(% of GDP)-9,0-9,4-10,6-7,4-8,2Gross official reserves(months of imports)9,28,17,488,3Total gross external debt(% of GDP)65,866,369,667,672,1Sources: IMF World Economic Outlook Database (April 2019), IMF Regional Economic Outlook (April 2019)Forecast years: 2018-2019Jordan 
 
 
 
 
 
 
                                                           
27 

20152016201720182019Real GDP(% change)-0,34,44,74,03,5Inflation (end of period) (% change)13,52,47,30,95,1Unemployment rate(% labour force)5,04,24,14,14,0Volume of imports of goods and services(% change)-5,07,612,49,89,0Volume of exports of goods and services(% change)1,07,712,711,46,5General government net lending/borrowing(% of GDP)-1,9-1,8-0,8-1,0-3,9General government gross debt(% of GDP)33,131,929,327,128,8Current account balance(% of GDP)-4,8-3,3-6,2-9,9-7,7Gross official reserves(months of imports)4,44,75,25,24,9Total gross external debt(% of GDP)99,297,286,783,784,1Sources: IMF World Economic Outlook Database (April 2019), IMF Country Report (December 2017)Forecast years: 2018-2019Moldova20152016201720182019Real GDP(% change)-9,82,42,53,32,7Inflation (end of period) (% change)43,312,413,79,87,0Unemployment rate(% labour force)9,19,59,79,08,5Volume of imports of goods and services(% change)-28,68,116,77,04,4Volume of exports of goods and services(% change)-11,9-3,67,83,94,7General government net lending/borrowing(% of GDP)-1,2-2,2-2,2-2,3-2,3General government gross debt(% of GDP)79,581,271,963,962,0Current account balance(% of GDP)1,7-1,5-2,2-3,7-2,5Gross official reserves(months of imports)3,13,44,65,85,4Total gross external debt(% of GDP)130123,8127,4126,3114,3Sources: IMF World Economic Outlook Database (April 2019), IMF Country Report (April 2017)Forecast years: 2018-2019Ukraine20152016201720182019Real GDP(% change)1,21,12,02,52,7Inflation (end of period) (% change)3,94,26,27,56,8Unemployment rate(% labour force)15,415,515,515,6n/aVolume of imports of goods and services(% change)-2,62,52,80,10,1Volume of exports of goods and services(% change)-2,80,24,62,93,0General government net lending/borrowing(% of GDP)-5,3-6,2-5,9-4,6-3,7General government gross debt(% of GDP)55,462,370,377,081,5Current account balance(% of GDP)-9,7-9,3-10,2-11,2-10,1Gross official reserves(months of imports)4,13,12,72,63Total gross external debt(% of GDP)62,766,981,783,198,4Sources: IMF World Economic Outlook Database (April 2019), IMF Regional Economic Outlook (April 2019)Forecast years: 2017-2019Tunisia  
 
 
 
 
 
 
 
 
Annex 2: MFA operations by date of decision, 1990-2018 

28 

Country19901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018TotalNumber of operationsBulgaria2901102501007504Czech & Slovak Fed. Rep.3753751Estonia40401Hungary87018010502Latvia80801Lithuania1001001Romania375801252007804Slovakia1301301Algeria4002006002Israel187,5187,51Jordan1802003802Lebanon80801Tunisia3005008002Armenia581001582Belarus55551Georgia17533,5464645345,55Moldova4515151545901003257Ukraine8520015011050010001800100048458Albania703520251504Bosnia & Herzegovina60601002203Kosovo (UNSCR 1244)3530501153Macedonia (FYR)4080181383Montenegro20201Serbia2002001Serbia & Montenegro345130705453Tajikistan95951Kyrgyz Republic30301Amount approved87018084800620255155231504601653933157025083,51250446590002561300180070010010451259412594No. of operations approved166062141543411022042003212126666* MFA received before becoming EU Member StateAcecssion and Pre-AccessionCurrent Member States*Neighbourhood SouthMFA Operations 1990 - 2018 by Date of DecisionNeighbourhood EastOther 
  
 
Annex  2A:  Status  of  effective  disbursements  by  date  of  decision  at  end-December 
2018 

29 

Status of effective disbursements as of end-December 2018 (in millions of €) AuthorisationsDisbursementsCountry Date ofReference ofMaximumDates ofAmounts ofTotalsUndisbursedDecisionDecisionamountdisbursementsdisbursementsdisbursedHungary22.02.9090/83/EC870Apr. 1990350610260(Loan)Feb. 1991260Czech and 25.02.9191/106/EC375Mar. 1991185375Slovak Federal RepublicMar. 1992190Hungary24.06.9191/310/EC180Aug. 1991100180(Loan)Jan. 199380Bulgaria24.06.9191/311/EC290Aug. 1991150290(Loan)Mar. 1992140Romania22.07.9191/384/EC375Jan. 1992190375(Loan)Apr. 1992185Israel122.07.9191/408/EC187,5Mar. 1992187,5187,5(Loan)Algeria23.09.9191/510/EC400Jan. 1992250400(Loan)Aug. 1994150Albania28.09.9292/482/EC70Dec. 19923570(Grant)Aug. 199335Bulgaria19.10.9292/511/EC110Dec. 199470110(Loan)Aug .199640Baltics23.11.9292/542/EC22013585(Loans); of which:    Estonia(40)Mar. 199320(20)(20)    Latvia(80)Mar. 199340(40)(40)    Lithuania(100)July 199350(75)(25)Aug. 199525Romania27.11.9292/551/EC80Feb. 19938080(Loan)Moldova13.06.9494/346/EC45Dec. 19942545(Loan)Aug. 199520Romania20.06.9494/369/EC125Nov. 199555125(Loan)Sep. 199740Dec. 199730Albania28.11.9494/773/EC35June 19951535(Grant)Oct. 199620EU MACRO-FINANCIAL AND EXCEPTIONAL FINANCIAL ASSISTANCE TO THIRD COUNTRIES BY DATE OF DECISION 
 
30 

Algeria22.12.9494/938/EC200Nov. 1995100100100(Loan)Slovakia22.12.9494/939/EC130July 1996130(Loan)Ukraine22.12.9494/940/EC85Dec. 19958585(Loan)Belarus10.04.9595/132/EC55Dec. 1995303025(Loan)Ukraine23.10.9595/442/EC200Aug. 199650200(Loan)Oct. 199650Sep. 1997100Moldova25.03.9696/242/EC15Dec. 19961515(Loan)Former Yugoslav 22.07.9797/471/EC40Sep. 19972540Republic of MacedoniaFeb. 199815(Loan)Bulgaria22.07.9797/472/EC250Feb. 1998125250( Loan)Dec. 1998125Armenia, Georgia 17.11.9797/787/EC(375)(294.5)and Tajikistan2amended by(Loans and Grants)28.3.0000/244/EC Agreed amounts with the recipent countires:328294,533,5Armenia(58)Dec. 1998 (Loan)28(58)(Loan and Grant)Dec. 1998 (Grant)8Dec.  1999 (Grant)4Feb. 2002 (Grant)5,5Dec. 2002 (Grant)5,5June 2004 (Grant)5,5Dec. 2005 (Grant)1,5Georgia(175)Jul. 1998 (Loan)110(141.5)(33.5)(Loan and Grant)Aug. 1998 (Grant)10Sep. 1999 (Grant)9Dec. 2001 (Grant)6Dec. 2004 (Grant)6,5Tajikistan(95)Mar. 2001 (Loan)60(95)(Loan and Grant)Mar. 2001 (Grant)7Dec. 2001 (Grant)7Feb. 2003 (Grant)7May. 2005 (Grant)7Oct. 2007 (Grant)7 
 
 
 
31 

Ukraine15.10.9898/592/EC150July 1999585892(Loan)12.07.0202/639/ECAlbania22.04.9999/282/EC2020( Loan)Bosnia310.05.9999/325/EC60Dec. 1999 (Grant)1560(Loan and Grant)amended byDec. 1999 (Loan)1010.12.0101/899/ECDec. 2000 (Grant)10Dec. 2000 (Loan)10Dec. 2001 (Grant)15Bulgaria08.11.9999/731/EC100Dec. 199940100(Loan)Sep. 200060Former Yugoslav 08.11.9999/733/EC80Dec. 2000 (Grant)2098Republic of18Dec. 2000 (Loan)10Macedonia410.12.0101/900/ECDec. 2001 (Loan)12(Loan and Grant)Dec. 2001 (Grant)10May 2003 (Grant)10June 2003 (Loan)10Dec. 2003 (Loan)18Dec. 2003 (Grant)8Romania08.11.9999/732/EC200June 200010015050(Loan)July 200350Kosovo519.02.0000/140/EC35Mar. 20002035(Grant )Aug. 200015Montenegro522.05.0000/355/EC20Aug. 2000720(Grant )Dec. 200013Moldova10.07.0000/452/EC1515(Loan)19.12.0202/1006/ECKosovo327.06.0101/511/EC30Sep. 20011530(Grant) Dec. 200215Serbia and 16.07.0101/549/EC345Oct. 2001 (Loan)225345Montenegro6Oct. 2001 (Grant)35(ex FRY)10.12.0101/901/ECJan. 2002 (Grant)40(Loan and Grant)Aug. 2002 (Grant)45Ukraine12.07.0202/639/EC110May. 2014 100110(Loan) Amendment of Decision Nov. 2014 1098/592/ECamended byamended by 
 
 
 
32 

Serbia and 05.11.0202/882/EC130Dec. 2002 (Grant)3010525Montenegro7Feb. 2003 (Loan)10(ex FRY)Aug. 2003 (Grant)35(Loan and Grant)Aug. 2003 (Loan)30Bosnia805.11.0202/883/EC60Feb. 2003 (Grant)1525 the rest was (Loan and Grant)Dec. 2003 (Grant)10paid under04/861/ECMoldova19.12.0202/1006/EC1515(Grant)Serbia and 25.11.0303/825/EC70Dec. 2004 101020Montenegro7 the rest was (ex FRY)paid underAmendment of Decision 02/882/EC (Grant)04/862/ECAlbania929.04.0404/580/EC25Nov. 2005 (Grant)325(Loan and Grant)Mar. 2006 (Loan)9July 2006 (Grant)13Bosnia807-12-200404/861/ECthe balance ofDec. 2004 (Loan)1035Amendment of Decision 02/883/ECJune 2005 (Grant)1502/883/EC (Loan and Grant)Feb. 2006 (Loan)10Serbia and 07.12.200404/862/ECthe balance ofApr. 2005 (Loan)1540Montenegro703/825/ECDec. 2005 (Grant)25(ex FRY)Amendment of Decision 02/882/EC (Loan and Grant)Georgia        24.01.0606/41/EC33,5Aug. 2006 112211,5(Grant)Dec. 2006 11Kosovo 30.11.0606/880/EC50Sep. 2010 303020(Grant)Moldova16.04.0707/259/EC45Oct. 2007 2045(Grant)Jun. 200810Dec. 2008 15Lebanon1010.12.0707/860/EC80Dec. 2008 (Grant) 154040(Loan and Grant)June 2009 (Loan)25Georgia30.11.0909/889/EC46Dec. 2009 15,346(Grant)Jan. 2010 7,7Aug. 2010 23Armenia1130.11.0909/890/EC100June 2011 (Grant)14100(Loan and Grant)July 2011 (Loan)26Dec. 2011 (Grant)21Feb. 2012 (Loan)39 
 
 
 
33 

Bosnia and 30.11.0909/891/EC100Feb. 2013 50100Herzegovina (Loan)Oct. 2013 50Serbia 30.11.0909/892/EC200July 2011100100100(Loan)Ukraine 29.06.10646/2010/EU500Nov. 2014 250500(Loan)Apr. 2015250Moldova20.10.10938/2010/EU90Dec. 2010 4090(Grant)Sep. 2011 20Apr. 2012 30Georgia12.08.13778/2013/EU46Jan. 2015 (Grant)1346(Loan and Grant)Apr. 2015 (Loan)10May 2017 (Grant)10May 2017 (Loan)13Kyrgyz Republic 22.10.131025/2013/EU30Jun. 2015 (Grant)1030(Loan and Grant)Oct. 2015 (Loan)5Feb. 2016 (Grant)5Apr. 2016 (Loan)10Jordan11.12.131351/2013/EU180Feb. 2015100180(Loan)Oct. 201580Tunisia15.5.14534/2014/EU300May 2015100300(Loan)Dec. 2015100July 2017100Ukraine14.04.142014/215/EU1 000,0June 20145001 000,0(Loan)Dec. 2014500Ukraine15.04.152015/601/EU 1 800,0July 20156001 200,0 600,0(Loan)Apr. 2017600Tunisia06.07.162016/1112/EU 500,0Oct. 2017200 200,0 300,0(Loan)(ongoing)Jordan14.12.162016/2371/EU  200,0Oct. 2017100 100,0 100,0(Loan)(ongoing)Moldova13.09.172017/1565/EU 100,0 100,0(Loan and Grant)(ongoing)Georgia18.04.20182018/598/EU 45,0Dec. 201820 20,0 25,0(Loan and Grant)(ongoing)Ukraine 04.07.20182018/947/EU1 000,0Dec. 2018 500 500,0 500,0(Loan) (ongoing)TOTAL12 594,09 927,02 667,0 
34 

4 Includes a loan principal amount of up to €50 million and grants of up to €48 million.5 Exceptional financial assistance.6 Includes a loan principal amount of €225 million and grants of €120 million.7 Includes a loan principal amount of €55 million and grants of €75 million.8 Includes a loan principal amount of €20 million and grants of €40 million.9 Includes a loan principal amount of €9 million and grants of €16 million.10 Includes a loan principal amount of €50 million and grants of €30 million.11 Includes a loan principal amount of €65 million and grants of €35 million.3 Includes a loan principal amount of up to €20 million and grants of up to €40 million.1 Assistance to Israel includes a loan principal amount of €160 million and grants of €27.5 million in the form of interest subsidies.2 Exceptional financial assistance, which includes a ceiling of €245 million for the loans and a ceiling of €130 million forthe grants. Out of the global amount of €375 million, maximum amounts of €58 million, €175 million and €95 million were actually agreed with the beneficiary countries 
 
  
 
Annex  2B:  Status  of  effective  disbursements  by  region  at  end-December  2018  (in 
millions of €) 

35 

AuthorisationsDisbursementsCountry Date ofReference ofMaximumDates ofAmounts ofTotalsUndisbursedDecisionDecisionamountdisbursementsdisbursementsA. Current EU Member StatesBaltics23.11.9292/542/EC22013585(Loans) of which :    Estonia(40)March 199320(20)(20)    Latvia(80)March 199340(40)(40)    Lithuania(100)July 199350(75)(25)Aug. 199525Bulgaria24.06.9191/311/EC290Aug. 1991150290(Loan)March 1992140Bulgaria19.10.9292/511/EC110Dec. 199470110(Loan)Aug. 199640Bulgaria22.07.9797/472/EC250Feb. 1998125250(Loan)Dec. 1998125Bulgaria08.11.9999/731/EC100Dec. 199940100(Loan)Sep. 200060Czech and 25.02.9191/106/EC375March 1991185375Slovak Federal RepublicMarch 1992190(Loan)Hungary22.02.9090/83/EC870Apr. 1990350610260(Structural Adjustment Loan)Feb. 1991260Hungary24.06.9191/310/EC180Aug. 1991100180(Loan)Jan. 199380Romania22.07.9191/384/EC375Jan. 1992190375(Loan)Apr. 1992185Romania27.11.9292/551/EC80Feb. 19938080(Loan)Romania20.06.9494/369/EC125Nov. 199555125(Loan)Sep. 199740Dec. 199730Romania08.11.9999/732/EC200June 200010015050(Loan)July 200350Slovakia22.12.9494/939/EC130July 1996130(Loan)TOTAL A3 305,02 780,0 525,0 
 
  
 
36 

B. Current Accession and Pre-Accession CountriesAlbania28.09.9292/482/EC70Dec. 19923570(Grant)Aug. 199335Albania28.11.9494/773/EC35June 19951535(Grant)Oct. 199620Albania22.04.9999/282/EC2020(Loan)Bosnia110.05.9999/325/EC60Dec. 1999 (Grant)1560(Loan and Grant)Dec. 1999 (Goan)1010.12.0101/899/ECDec. 2000 (Grant)10Dec. 2000 (Loan)10Dec. 2001 (Grant)15Former Yugoslav Republic 22.07.9797/471/EC40Sep. 19972540of Macedonia (Loan)Feb. 199815Former Yugoslav Republic08.11.9999/733/EC80Dec. 2000 (Grant)2098of Macedonia2Dec. 2000 (Loan)10(Loan and Grant)10.12.200101/900/EC18Dec. 2001 (Loan)12Dec. 2001 (Grant)10May 2003 (Grant)10June 2003 (Loan)10Dec. 2003 (Loan)18Dec. 2003 (Grant)8Kosovo319.02.0000/140/EC35Mar. 20002035(Grant)Aug. 200015Kosovo327.06.0101/511/EC30Sep. 20011530(Grant)Dec. 200215Montenegro322.05.0000/355/EC20Aug. 2000720(Grant Budgetary Support)Dec. 200013Serbia and Montenegro416.07.0101/549/EC345Oct. 2001 (Grant)35345(ex FRY)amended byOct. 2001 (Loan)225(Loan and Grant)10.12.200101/901/ECJan. 2002 (Grant)40Aug.2002 (Grant)45Serbia and Montenegro505.11.0202/882/EC130Dec. 2002 (Grant)3010525(ex FRY)Feb. 2003 (Loan)10Aug. 2003 (Grant)35Aug. 2003 (Loan)3025.11.0303/825/EC (7)70Dec. 2004 (Grant)10502007.12.0404/862/ECApr.  2005 (Loan)15Dec. 2005 (Grant)25modified byamended byamended by(Loan and Grant) 
 
37 

Bosnia605.11.0202/883/EC60Feb. 2003 (Grant)1560Dec. 2003 (Grant)10Dec 2004 (Loan)1007.12.0404/861/ECJune 2005 (Grant)15Feb. 2006 (Loan)10Albania829.04.0404/580/EC25Nov. 2005 (Grant)325Mar. 2006 (Loan)9Jul. 2006 (Grant)13Kosovo  (Grant)30.11.0606/880/EC50Sep. 2010303020Bosnia and 30.11.0909/891/EC100Feb. 2013 50100Herzegovina (Loan)Oct. 2013 50Serbia 30.11.0909/892/EC200juil-11100100100(Loan)TOTAL B1 388,01 203,0 185,0amended by(Loan and Grant)(Loan and Grant) 
 
   
 
38 

Neighbourhood East and Other Countries9Armenia, Georgia 17.11.9797/787/EC(375)(294.5)and Tajikistan10amended bydownsized to(Loans and Grants) 28.3.0000/244/ECAgreed amounts with the recipent countires:328294,533,5Armenia(58)Dec. 1998 (Loan)28(58)Dec. 1998 (Grant)8Dec.  1999 (Grant)4Feb. 2002 (Grant)5,5Dec. 2002 (Grant)5,5June 2004 (Grant)5,5Dec. 2005 (Grant)1,5Georgia(175)July 1998 (Loan)110(141,5)(33,5)Aug. 1998 (Grant)10Sep. 1999 (Grant)9Dec. 2001 (Grant)6Dec. 2004 (Grant)6,5Tajikistan(95)Mar. 2001 (Loan)60(95)Mar. 2001 (Grant)7Dec. 2001 (Grant)7Feb. 2003 (Grant)7May 2005 (Grant)7Oct .2006 (Grant)7Belarus10.04.9595/132/EC55Dec. 1995 303025(Loan)Moldova13.06.9494/346/EC45Dec. 1994 2545(Loan)Aug. 1995 20Moldova25.03.9696/242/EC15Dec. 1996 1515(Loan)Moldova10.07.0000/452/EC1515(Loan)19.12.0202/1006 EC19.12.0202/1006/EC1515Moldova(Grant) 
 
 
 
39 

Neighbourhood East and Other Countries9Armenia, Georgia 17.11.9797/787/EC(375)(294.5)and Tajikistan10amended bydownsized to(Loans and Grants) 28.3.0000/244/ECAgreed amounts with the recipent countires:328294,533,5Armenia(58)Dec. 1998 (Loan)28(58)Dec. 1998 (Grant)8Dec.  1999 (Grant)4Feb. 2002 (Grant)5,5Dec. 2002 (Grant)5,5June 2004 (Grant)5,5Dec. 2005 (Grant)1,5Georgia(175)July 1998 (Loan)110(141,5)(33,5)Aug. 1998 (Grant)10Sep. 1999 (Grant)9Dec. 2001 (Grant)6Dec. 2004 (Grant)6,5Tajikistan(95)Mar. 2001 (Loan)60(95)Mar. 2001 (Grant)7Dec. 2001 (Grant)7Feb. 2003 (Grant)7May 2005 (Grant)7Oct .2006 (Grant)7Belarus10.04.9595/132/EC55Dec. 1995 303025(Loan)Moldova13.06.9494/346/EC45Dec. 1994 2545(Loan)Aug. 1995 20Moldova25.03.9696/242/EC15Dec. 1996 1515(Loan)Moldova10.07.0000/452/EC1515(Loan)19.12.0202/1006 EC19.12.0202/1006/EC1515Ukraine22.12.9494/940/EC85Dec. 1995 8585(Loan)Ukraine23.10.9595/442/EC200Aug. 1996 50200(Loan)Oct. 1996 50Sep. 1997 100Ukraine15.10.9898/592/EC150July 1999585892(Loan)12.07.0202/639/EC110mai-14100110Nov. 2014 10Amendment of Decision 98/592/ECMoldova(Grant)(Loan)Ukraine 
 
40 

Georgia        21.01.06      06/41/EC33,5Aug. 2006 112211,5(Grant)Dec. 2006 11Moldova       16.04.07     07/259/EC45     Oct. 2007 2045(Grant)June 200810Dec. 2008 15Georgia30.11.0909/889/EC46Dec. 2009 15,346(Grant)Jan. 2009 7,7Aug. 2010 23Armenia11 30.11.0909/890/EC100June 2011 (Grant)14100(Loan and Grant)July 2011 (Loan)26Dec. 2011 (Grant)21Feb. 2012 (Loan)39Ukraine 29.06.10646/2010/EU500Nov. 2014 250500(Loan)Apr. 2015 250Moldova 20.10.10938/2010/EU90Dec. 2010 4090(Grant)Sep. 2011 20Apr. 2012 30Georgia12.08.13778/2013/EU46Jan. 2015 (Grant)1346(Loan and Grant)Apr. 2015 (Loan)10May 2017 (Grant)10May 2017 (Loan)13Kyrgyz Republic 22.10.131025/2013/EU30Jun. 2015 (Grant)1030(Loan and Grant)Oct. 2015 (Loan)5Feb. 2016 (Grant)5Apr. 2016 (Loan)10Ukraine14.04.142014/215/EU1000June 20145001000(Loan)Dec. 2014500Ukraine15.04.152015/601/EU 1800July 20156001200600(Loan)Apr. 2017600Moldova13.09.172017/1565/EU100100(Loan and Grant)(ongoing)Georgia18.04.20182018/598/EU 45,0Dec. 201820 20,0 25,0(Loan and Grant)(ongoing)Ukraine 04.07.20182018/947/EU1 000,0Dec. 2018 500 500,0 500,0(Loan) (ongoing)TOTAL C5 853,54 436,51 417,0 
 
  
 
41 

D. Neighbourhood SouthIsrael1222.07.9191/408/EC187,5Mar. 1992187,5187,5(Structural Adjustment Soft Loan)Algeria23.09.9191/510/EC400Jan. 1992250400(Loan)Aug. 1994150Algeria22.12.9494/938/EC200Nov. 1995100100100(Loan)Lebanon1310.12.07     07/860/EC80Dec. 2008 (Grant)154040(Grant and Loan)June 2009 (Loan)25Jordan11.12.131351/2013/EU180Feb. 2015100180(Loan)Oct. 201580Tunisia15.5.14     534/2014/EU300May 2015100300(Loan)Dec. 2015100July 2017100Tunisia06.07.162016/1112/EU 500,0Oct. 2017200 200,0 300,0(Loan)(ongoing)Jordan14.12.162016/2371/EU  200,0Oct. 2017100 100,0 100,0(Loan)(ongoing)TOTAL D2 047,51 507,5 540,0TOTAL A+B+C+D12 594,09 927,02 667,01 Includes a loan principal amount of €20 million and grants of €40 million.2 Includes a loan principal amount of up to €50 million and grants of up to €48 million.3 Exceptional financial assistance.4 Includes a loan principal amount of €225 million and grants of €120 million.5 Includes a loan principal amount of €55 million and grants of €75 million.5 Includes a loan principal amount of €20 million and grants of €40 million.6 Includes a loan principal amount of €25 million and grants of €45 million.8 Includes a loan principal amount of €9 million and grants of €16 million.9 Other countries include Tajikistan and Kyrgyz Republic, to which expecptional MFA support was provided11 Includes a loan principal amount of €65 million and grants of €35 million.12 Assistance to Israel includes a loan principal amount of ECU 160 million and grants of ECU 27.5 million in the form of interest subsidies.13 Includes a loan principal amount of €50 million and grants of €30 million.10 Exceptional financial assistance, which includes a ceiling of €245 million for the loans and a ceiling of €130 million for the grants. Out of the total amount of €375 million, maximum amounts of €58 million, €175 million and €95 million were actually agreed with the beneficiary countries.  
  
 
Annex 3: MFA amounts authorised by year, 2005-2018 (EUR million) 

Chart 3A: MFA amounts authorised by year, 2005-2018 (EUR million) 

Chart 3B: MFA amounts authorised by region, 2005-2018 (%) 

42 

2006200720082009201020112012201320142015201620172018TotalBy regionAccession and Pre-Accession  50,0  300,0  350,0Neighbourhood East  33,5  45,0  146,0  590,0  46,0 1 000,0 1 800,0  100,0 1 045,0 4 805,5Neighbourhood South  80,0  180,0  300,0  700,0 1 260,0Other  30,0  30,0Total amounts authorised   83,5  125,0  0,0  446,0  590,0  256,0 1 300,0 1 800,0  700,0  100,0 1 045,0 6 445,5Loans  0,0  50,0  0,0  365,0  500,0  218,0 1 300,0 1 800,0  700,0  60,0 1 035,0 6 028,0Grants  83,5  75,0  0,0  81,0  90,0  38,0  40,0  10,0  417,51 More detailed information is available in the statistical data of the staff working document2 Authorised amounts refer to the amounts agreed to in the MFA Decisions, which may differ from the disbursed amounts (Annex 3) 
 
 
 
Annex 4: MFA amounts disbursed by year, 2005-2018 (EUR million) 

Chart 4A: MFA amounts disbursed by year, 2005-2018 (EUR million) 

Chart 4B: MFA amounts disbursed by region, 2005-2018 (%) 

43 

20052006200720082009201020112012201320142015201620172018TotalBy regionAccession and Pre-Accession  58,0  32,0  30,0  100,0  100,0  320,0Neighbourhood East  8,5  29,0  20,0  25,0  15,3  70,7  81,0  69,0 1 360,0  873,0  613,0  520,0 3 684,5Neighbourhood South  15,0  25,0  380,0  400,0  820,0Other  15,0  15,0  30,0Total amounts disbursed  66,5  61,0  20,0  40,0  40,3  100,7  181,0  69,0  100,0 1 360,0 1 268,0  15,0 1 013,0  520,0 4 854,5Loans  15,0  19,0  0,0  0,0  25,0  0,0  126,0  39,0  100,0 1 360,0 1 245,0  10,0 1 013,0  515,0 4 467,0Grants  51,5  42,0  20,0  40,0  15,3  100,7  55,0  30,0  23,0  5,0  10,0  5,0  397,51 More detailed information is available in the statistical data of the Staff Working Document 
 
 
 
 
Annex 5: Outstanding Amounts in respect of operations disbursed at end-December 
2018  

44 

Country Outstanding capital in respect of MFA operations disbursed (as of 31/12/2018)Ukraine3.310.000.000,00Tunisia500.000.000,00Jordan280.000.000,00Bosnia and Herzegovina138.000.000,00Armenia65.000.000,00Serbia and Montenegro (ex FYR)48.334.000,00Georgia38.000.000,00Kyrgyz Republic 15.000.000,00Albania5.400.000,00Total (in EUR million)4.399.734.000,00