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 2019
Date: 2020-07-07
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: European neighbourhood policy, Georgia, Jordan, Moldova, Tunisia, Ukraine, economic stabilisation, macro-financial assistance, macroeconomics, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 7.7.2020  SWD(2020) 125 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 2019 {COM(2020) 296 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 2019 

1 

 
 
LIST OF ABBREVIATIONS 

AA 

CPI 

Association Agreement 

Consumer price index 

DCFTA 

Deep and Comprehensive Free Trade Area 

EC 

ECF 

EEU 

EFF 

EFTA 

EIB 

ENP 

ENI 

EU 

EUR 

FATF 

FDI 

FSAP 

GDP 

IMF 

MFA 

MoU 

OECD 

OJ 

PFM 

PPP 

SBA 

SDR 

SOE 

SREP 

TFEU 

VAT 

WTO 

y-o-y 

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 

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 

Treaty on the Functioning of the European Union 

Value added tax 

World Trade Organisation 

year-on-year 

2 

 
 
 
 
 
 
 
 
 
CONTENTS 

Introduction .................................................................................................................................................. 4 

Background analysis of beneficiaries of macro-financial assistance ........................................................ 5 

1.  Tunisia ................................................................................................................................................... 5 

1.1.  Macroeconomic performance ..................................................................................................... 5 
1.2.  Structural reforms ....................................................................................................................... 6 
Implementation of macro-financial assistance ............................................................................ 7 
1.3. 

2. 

Jordan ................................................................................................................................................. 10 

2.1.  Macroeconomic performance ................................................................................................... 10 
2.2.  Structural reforms ..................................................................................................................... 10 
Implementation of macro-financial assistance .......................................................................... 12 
2.3. 

3.  Moldova ............................................................................................................................................... 14 

3.1.  Macroeconomic performance ................................................................................................... 14 
3.2.  Structural reforms ..................................................................................................................... 15 
Implementation of macro-financial assistance .......................................................................... 15 
3.3. 

4.  Georgia ................................................................................................................................................ 19 

4.1.  Macroeconomic performance ................................................................................................... 19 
4.2.  Structural reforms ..................................................................................................................... 19 
Implementation of macro-financial assistance .......................................................................... 20 
4.3. 

5.  Ukraine ................................................................................................................................................ 23 

5.1. Macroeconomic performance ........................................................................................................ 23 
5.2. Structural reforms .......................................................................................................................... 24 
5.3  Implementation of macro-financial assistance .............................................................................. 25 

Annexes ........................................................................................................................................................ 28 

Annex 1: Selected macroeconomic indicators by country ................................................................... 28 
Annex 2: MFA operations by date of decision, 1990-2019 .................................................................. 30 
Annex 2A: Status of disbursements made by date of decision at end-December 2019 ........................ 31 
Annex 2B: Status of disbursements made by region at end-December 2019 (in millions of €) ........... 37 
Annex 3: MFA amounts authorised by year, 2005-2019 (EUR million) ............................................. 43 
Chart 3A: MFA amounts authorised by year, 2006-2019 (EUR million) ............................................ 43 
Chart 3B: MFA amounts authorised by region, 2006-2019 (%) .......................................................... 43 
Annex 4: MFA amounts disbursed by year, 2006-2019 (EUR million) ............................................... 44 
Chart 4A: MFA amounts disbursed by year, 2006-2019 (EUR million) .............................................. 44 
Chart 4B: MFA amounts disbursed by region, 2006-2019 (%) ............................................................ 44 
Annex 5: Outstanding amounts in respect of MFA operations disbursed (as at 31 December 2019) .. 45 

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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 2019.1 

Over 2019, two countries in the Southern Neighbourhood, Jordan and Tunisia, benefited 
from  macro-financial  assistance  disbursements.  The  year  was  also  characterised  by  the 
first disbursement in Moldova, and progress in the implementation of the ongoing MFA 
programmes in Georgia and Ukraine 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 2006-2019, by year and by region.2 

1   This document is based on information available up to May 2020. 

2   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.  

4 

 
 
 
                                                           
BACKGROUND ANALYSIS OF BENEFICIARIES OF MACRO-FINANCIAL ASSISTANCE

3 

1. 

TUNISIA 

1.1. Macroeconomic performance 

The  Tunisian  economy  remained  subdued  and  grew  at  an  estimated  1%  rate  in  2019, 
following  the  improvement  in  2018  (2.7%)  and  the  meagre  1.4%  average  annual 
expansion over the 2015-17 period. Growth remained fragile, in line with weak external 
demand  and  the  moderation  in  domestic  consumtion  and  investment,  At  sectoral  level, 
growth  was  affected  by  the  stagnation  in  agricultural  production  and  the  drop  in 
manufacturing  and  non-manufacturing  industries,  despite  positive  trends  in  services. 
Growth remained insufficient to reduce unemployment, which remained persistently high 
at around 14.9% at the end of 2019 (with much higher rates for female and youth) despite 
a a slight contraction in the number of unemployed. 

Inflation averaged 6.7% in 2019, after reaching a 7.8% decade-high in June 2018. As a 
response  to  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%).  It 
subsequently  raised  its  rate  in  February  2019  to  7.75%,  bringing  real  interest  rates  to 
positive  territory.  After  a  period  of  relatively  prolonged  depreciation,  the  dinar 
appreciated against main foreign currencies in 2019. 

The  fiscal  deficit  is  estimated  at  around  3.5%  in  2019,  as  revised  in  the  2019 
Supplementary Finance Law, against a 4.9% deficit in 2018, and is expected to reach 3% 
in the 2020 Finance Law. The improvement is largely attributed to the good performance 
of State’s own resources (up by about 16% in 2019) driven by the sharp increase in tax 
revenues  (+17.9%),  in  particular  direct  taxes  (+39.5%)  compared  to  2018.    Operating 
expenses  also  rose  (up  11.6%),  mostly  due  to  an  increase  in  wage  costs  of  13.5%  and 
goods  and  services  expenditure  (+32.8%),  while  investment  remained  subdued.  The 
increase  in  the  public  service  wage  bill  reamins  high,  at  14.5%  of  GDP  in  2019, 
compared to 14% in 2018 and 14.8% in 2017.  

Total  public  debt  is  expected  to  have  reached  a  level  of  72.2%  of  GDP  at  the  end  of 
2019, down from 77.9% of GDP at the end of 2017. Debt service costs had once again a 
considerable  impact  on  total  expenditures  in  2019  increasing  by  38.5%  compared  to 
2018. The stock of external  public debt  is  mostly denominated in  euros (55.7%) and is 
mainly  due  to  multilateral  organisations  at  48.9%,  followed  by  debt  to  the  financial 
markets (35.6%) and debt granted within the framework of bilateral cooperation (15.5%). 
Tunisia issued Eurobonds for EUR 700 million in July 2019, with a yield of 6.37% and a 
maturity of seven years. 

The balance of payments improved in 2019 and the current account deficit stood at TND 
10 billion, or 8.8% of GDP at the end of the year (against a record high 11.1% of GDP in 
2018). The trade deficit continued to widen in nominal terms (+2%), with a broadening  
energy  balance  representing  around  40%  of  the  total.    Excluding  energy,  the  trade 
balance deficit narrowed slightly with a a drop in both exports and imports of 5.2% and 
8.5%, respectively, at constant prices. Export revenues increased (7%) due to the rise in 
export  prices.  The  country  also  recorded  strong  increases  in  the  receipts  generated  by 
tourism  (+35.7%)  and  labor  income  (+15%).  There  has  also  been  an  improvement  in 

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

5 

 
                                                           
foreign  reserves,  which,  after  a  record  low  of  69  days  of  imports  in  September  2018, 
reached 112 days of imports in February 2020. 

1.2.  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 in the region. Economic activities are mostly clustered along the coast, 
leaving the interior regions less economically and socially developed. A perceived excess 
of bureaucracy acts as a discouraging factor to private investment and limited measures 
have  been  also  taken  to  combat  informality.  Beyond  the  need  to  reduce  the  regulatory 
burden,  other  remaning  challenges  point  to  adressing  vested  interests,  improving  the 
business environment and increasing competition across the economy in order to attract 
investors.  As  long  as  the  civil  service  remains  the  most  attractive  employment  option, 
private entrepreneurship might also remain underdeveloped.  

The  previous  Tunisian  government  had  committed  to  an  ambitious  plan  of  reforms, 
which  aimed  to  address  most  of  the  bottlenecks  hampering  growth  in  the  country. 
However, the structural reform process progressed at a slow pace, also concerning some 
measures  that  were  linked  to  the  implementation  of  MFA  II  and  the  IMF  programme. 
Structural  reforms  supported  under  the  arrangement  include  measures  to  improve  the 
business climate, broaden access to finance and reduce corruption. Reform progress has 
also  been  influenced  by  the  electoral  cycle  notably  during  the  second  half  of  2019 
(legislative and presidential elections). 

The Parliament adopted the new Organic Budget Law (Loi Organique du Budget, LOB), 
on 31 January 2019, as well as a new law on the Cour des Comptes (CdC) reflecting the 
provisions  in  the  new  Constitution.  These  measures  were  also  supported  as  part  of  the 
conditionality for the MFA-II programme.  

Additional measures were taken to ensure budget sustainability, including the approval of 
the reform law for the public pension fund (CNRPS) in April 2019. The law will improve 
the financial situation of the CNRPS thanks to an increase in the retirement age (from 60 
to 62) and higher contributions. Some wage bill containment measures also continued in 
the  public  sector,  with  hiring  limits  (replacement  rate  of  25%)  in  the  context  of  the 
decisions  on  the  gradual  increase  in  the  retirement  age  and  the  salary  increases  for  the 
civil service in January 2019 (to take place in 2019 and 2020). The government, within 
the  framework  of  the  IMF  programme,  also  applied  some  measures  to  reduce  energy 
subsidies (by 0.5% of GDP) between March and May 2019, including increases of fuel 
prices and utility tariffs for some customers.  

Work  towards  the  enhancement  of  state-owned  enterprises’  (SOEs’)  efficiency  had 
limited  advances  in  2019  (including  the  implementation  of  the  performace  contract  for 
Tunisair  and  enhanced  monitoring),  although  containing  contingent  risks  from  SOEs 
remains a priority. Further delays also took place regarding the operationalisation of the 
National Anticorruption and Good Governance Authority.  

There were some  advances regarding financial  supervision through the central  bank.  In 
the  area  of  tax  governance  computerisation  of  the  tax  administration  continued,  and 
international cooperation by the Tunisian tax authorities to combat money laundering and 
the  financing  of  terrorism  strengthened.  The  EU  approved  Tunisia’s  removal  from  the 
grey list of non-cooperative tax jurisdictions in March 2019.  

6 

 
 
Following the adoption of the new law aimed to reform the social security system (Loi 
Amen) in 2018, there were advances regarding the survey of the households benefitting 
from  the  main  social  transfer  programmes  and  an  action  plan  was  presented  for  the 
implementation of reforms aimed at improving the effectiveness and sustainability of the 
country's social protection system, in line with the MFA-II objectives. 

The  online  system  of  public  procurement  "TUNEPS"  (Tunisian  e-procurement  system) 
became  compulsory  for  procurements  by  central  government  units  as  from  September 
2018  (ministries,  non-administrative  public  institutions  and  public  enterprises)  and  for 
other  public  institutions  and  the  Local  Government  from  1  September  2019,  becoming 
the only means for public procurement. 

In June 2019 a Transversal Law to Improve the Business Climate entered into force. The 
objective is to modify 16 existing laws and 4 legal codes in order to simplify procedures 
and  address  legal  obstacles,  with  the  ultimate  goal  to  promote  foreign  investment. 
Tunisian  authorities  admit  that  the  law  was  designed  to  a  large  extent  to  improve 
Tunisia’s ranking in the World Bank Doing Business report. The government also started 
implementing  the  Start-up  Act  adopted  in  2018  and  a  simplification  of  administrative 
authorisations.  

Negotiations  on  the  EU-Tunisia  Deep  and  Comprehensive  Free  Trade  Agreement 
(DCFTA) were launched on 13 October 2015 and limited progress was achieved in 2019 
through  only  one  negotiation  round  in  May  2019.  At  the  end  of  November  2018,  the 
Government  introduced,  with  no  previous  notice  to  trade  partners,  a  number  of  trade 
restrictive measures that were finally repealed in mid-2019.  

Reform implementation was more challenging and had limited progress during the final 
months  of  the  year,  mostly  due  to  the  demanding  electoral  calendar  (presidential 
elections on September 15, parliamentary elections on October 6 and a presidential run-
off on October 13) and, subsequently, the protracted formation of a new government that 
only took office at the end of February 2020.    

1.3. 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 follow a first MFA operation implemented between 2014 and 2017. 
The legislative decision  on this new operation was  adopted in  July 20164  and the draft 
Memorandum  of  Understanding  (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 
11 August 2017.  The  first 
instalment  of  EUR  200  million  was  disbursed  on 
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 were conditional on a number of measures, 
listed in the MoU, whose focus spans from public finance management and fiscal policy, 

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). 

7 

 
                                                           
through  the  social  security  system  and  the  labour  market,  to  the  improvement  of  the 
business  climate.  Throughout  2018  and  2019,  including  the  review  missions  in  March 
and  July  2019,  the  Commission  held  meetings  and  follow-up  exchanges  with  the 
Tunisian  authorities  in  order  to  gather  information,  assess  compliance  and  provide 
additional technical support to Tunisian services to enable the fulfilment of the pending 
MoU  conditions  required  for  the  disbursement  of  the  second  and  third  instalments. 
Following  the  fulfilment  of  these  policy  commitments,  the  EU  approved  the  release  of 
the  second  disbursement  of  EUR  150  million  on  24  June  2019.  The  third  and  final 
instalment (EUR 150 million) was approved on 30 October and disbursed in November 
2019, thus effectively concluding the programme. 

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.  

The  fourth  review  of  the  International  Monetary  Fund  (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  fifth  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.  

On  June  12,  2019,  the  Executive  Board  of  the  completed  the  fifth  review  of  Tunisia’s 
economic programme. 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 subsequently received a sixth disbursement of approximately 
SDR 177 million (around USD 245 million). This brought the total disbursement under 
the EFF to about USD 1.6 billion, helping to unlock additional financing from Tunisia’s 
other external partners.  

Overall, reform implementation was rather challenging throughout 2018 and 2019, which 
had  an  impact  in  the  relative  slowdown  of  the  reviews  and  the  fulfilment  of  agreed 
measures  for  both  the  MFA  and  the  IMF  programme.  While  staff-level  and  technical 
exchanges continued during the final months of the year, the expected IMF reviews were 
also delayed due to the electoral calendar. The succesive review did not take place during 
the  year,  as  it  was  expected  to  happen  only  after  the  September  and  October  2019 
elections  and  a  new  government  had  taken  office,  which  eventually  only  occurred  in 
2020.  

8 

 
 
 
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 energy subsidies in 2017 and continued throughout 
2018 and early 2019, although additional reforms are expected in this area. 

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 and a fourth round of negotiations 
took  place in  May  2019.  In  November  2018,  the Tunisian  government  introduced  a number  of 
trade restrictive non-tariff measures that were removed in mid-2019. 

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 and net foreign exchange purchases by the Central Bank since May 2019 have 
facilitated exchange rate flexibility.  

4. Foreign direct investment 

A new Investment Law was approved in 2016. In 2018 and 2019, the implementation of the law 
continued,  namely  through  the  operationalisation  of  the  Tunisia  Investment  Authority,  reforms 
for the off-shore regime and a new Law to Improve the Business Climate that entered into force 
in June 2019.  

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. In 
2019, the Bank continued to tighten its policy in order to control inflation.  

6. Public finances and taxation 

Tunisia’s  public  finances  keep  being  characterised  by  the  vast  amount  of  public  expenditure 
devoted to salaries (almost 15% of expenditure in 2019) and subsidies, which are not sufficiently 
compensated by the relatively heavy fiscal burden (as tax revenues make up over 20% of GDP). 
The government had committed to undertake fiscal consolidation in order to gradually reduce the 
annual fiscal deficit until a level of 3% in 2020, beofre the impact of the COVID-19 outbreak. 
Limited  changes  in  corporate  and  income  tax  rates,  as  well  as  in  the  VAT  system,  were 
implemented in 2018 as well as the decision to eliminate the preferential tax regime for off-shore 
companies by 2021. Improvements in tax administration could further strengthen tax  collection, 
including  enhanced  information  exchange  with  international  partners.  A  number  of  measures 
aimed at reducing tax evasion are in place, although their effectiveness has been limited. 

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  and  other  interested  parties.  Nevertheless,  a 
process  of  performance  optimisation  of  both  public  banks  and  SOEs  has  recently  been 
undertaken by the authorities, with limited progress so far. 

9 

 
 
 
 
 
 
2. 

JORDAN 

1.1. Macroeconomic performance  

Regional instability continued to act as a drag on Jordan’s economy and to weigh on its 
external and fiscal positions. During the first three quarters of 2019, real GDP remained 
largely stable at around 2% year on year. This was not enough to prevent an increase in 
unemployment,  which  rose  during  the  third  quarter  of  2019  to  19.1%,  compared  to 
18.6% during the same quarter in 2018.  

During  2019,  the  Central  Bank  of  Jordan  reduced  the  re-discount  rate  in  three  equal 
steps:  from  5.75% to  5.50% on 4 August,  to  5.25% on 19 September and to  5% on 30 
October. This broadly mirrored the decrease in Fed’s rate on 31 July, 18 September and 
30 October, given the peg of the Jordanian dinar to the US dollar. This decline coincided 
with  the  easing  of  inflationary  pressures,  as  at  the  end  of  2019  the  consumer  prices 
increased only by 0.3% compared to an increase of 4.5% in 2018. 

Progress in fiscal consolidation was not sustained. In the first eleven months of 2019, the 
general  budget  deficit,  including  foreign  grants,  increased  to  4.5%  of  GDP  compared 
3.5% of GDP in the same period of 2018. This  was the result of 4.9% increase in total 
expenditures which outweighed the 0.9% increase in total revenues (including grants). 

Jordan’s  gross  public  debt  increased  to  97.6%  of  GDP  at  the  end  of  November  2019 
compared  to  94.4%  of  GDP  at  the  end  of  2018.  The  external  public  debt  amounted  to 
around 40.7% of GDP at end-November 2019. Around 73% of Jordan’s external public 
debt was denominated in USD with which the Jordanian currency is pegged while around 
half of Jordan’s external public debt is held by official sector creditors.   

Exports grew by 8.6% in value terms, as opposed to a decline in the value of imports by 
5.5%  in  the  first  ten  months  of  2019.  Combined  with  an  increase  in  travel  receipts 
(9.9%), this contributed to the narrowing of the current account deficit to 3.4% of GDP 
(or 4.8% of GDP excluding grants) in the first nine months of 2019 from 9.3% of GDP in 
the same period in 2018.  

External  financing  conditions  have  turned  less  favourable.  Foreign  direct  investment 
inflows  continued  the  decline  of  previous  years  to  reach  a  net  inflow  of  JOD  473.1 
million  during  the  first  three  quarters  of  2019  compared  to  a  net  inflow  of  JOD  542.5 
million during the same period of 2018.  

Thus,  in  November  2019,  gross  foreign  currency  reserves  (including  gold  and  SDRs) 
stood  at  USD  13.7  billion  (equivalent  to  around  7.4  months  of  next  year’s  imports). 
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.   

1.2. Structural reforms 

During  2019,  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  is  comprehensive  and  draws  on  strategies  that  have  been  adopted  in 
previous years as well as in 2019.  

Strategies  adopted  in  previous  years  include  the  “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. Strategies developed more recently include the National 

10 

 
Social  Protection  Strategy  adopted  in  2019  as  well  as  the  Path  to  Revival  for  2019–20 
(widely  known  as  the  Renaissance  plan),  which  aims  at  strengthening  the  rule  of  law, 
increasing  productivity  and  enhancing  solidarity.  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).  Finally,  acknowledging  the 
need  for  more  and  deeper  structural  reforms,  the  government  embarked  on  a  more 
ambitious,  comprehensive  and  wide-ranging  reform  programme  which  was  prepared  in 
collaboration  with  the  World  Bank  and  presented  during  the  “London  Initiative” 
conference in February 2019. This reform programme – the so-called Five-Year Reform 
and  Growth  Matrix  –  aims  to  preserve  macro-economic  stability,  to  increase  Jordan’s 
growth prospects,  to  make the economy more competitive and export-led and to  attract 
new investment.  

Overall,  Jordan’s  efforts  delivered  only  uneven  success  as  the  reform  process  was 
challenged by regional instability, the low growth environment, rising unemployment, as 
well  as  by  domestic  political  and  social  tensions.  The  latest  caused  delays  in  reform 
implementation as well as policy reversals in some cases, notably in tax policies and the 
adjustment in electricity and water tariffs.  

Nevertheless,  some  important  reforms  for  enhancing  growth  performance  were 
completed  in  2019.  The  government  opened  22  new  economic  sectors  to  foreign 
investments and accelerated efforts to reduce the regulatory burden in trade. A new land 
legislation  simplified  and  reduced  requirements  for  liquidating  land  in  the  case  of 
disputes,  while  a  new  by-law  for  construction  in  the  Amman  Municipality  introduced 
more  consistent  regulation  and  sustainable  zoning  strategies.  New  visas  for  entry  to 
Jordan  were  issued  including  business,  tourism,  medical  and  study  visas.  Also,  new 
regulations  were  issued  facilitating  the  entrance  of  high  skilled  labour  to  Jordan. 
Provisions  aiming  at  the  automation  of  registration  processes  as  well  as  at  the 
simplification  of  municipal  and  enviromental  linces  were  passed  in  the  context  of  the 
Investor  Journey.  Six  pilot  government  entities  started  to  implement  the  Regulatory 
Predictability  Framework  to  improve  the  overall  governance  of  private  sector-related 
policymaking, reduce regulatory uncertainty, and enhance predictability. Last, secondary 
legislation was introduced in relation to three important laws that had passed already in 
2018  (on  secured  lending,  on  business  insolvency  and  on  business  inspections).  The 
above reforms enabled Jordan to climb to the 75th position in World Bank’s Report on 
Doing  Business  for  2020  (which  assess  progress  in  2019)  from  the  104th  position  the 
year before. Nevertheless, in the first three quarters of 2019, net FDI to Jordan shrunk by 
12.7% compared to the respective period in 2018.  

A significant achievement was the adoption (in collaboration with the World Bank) of an 
Electricity Roadmap which entailed measures to reform the electricity sector in Jordan as 
well as to ensure the financial sustainability of the electricity company (NEPCO). In this 
context,  an  electricity  bill  recovery  mechanism  was  adopted  and  enforced  to  settle 
payment arrears.   

Another important reform (supported by the MFA-II) was the adoption, in May 2019, of 
a  unified  public  procurement  by-law  which  provides  for  the  establishment  of  a  central 
policy and oversight unit and an independent mechanism for handling complaints. 

On the other hand, progress in other crucial reform areas was less visible. The strategy 
for fiscal consolidation had not been formally adopted by the end of 2019 and in essence 
was  replaced  by  the  new  IMF  programme    which was approved by the  IMF Executive 
Board on 25 March 2020.  The strategy for revenue mobilisation was not adopted within 
2019 and neither was the strategy for enhancing tax administration. The organic law on 
public  finance  management  structures  was  not  finalised  in  2019.  Furthermore,  the 

11 

 
governance  frameworks  for  Public  Investment  Management  and  Public-Private 
Partnerships had not been legislated in 2019, implying delays to their operationalisation. 
Similarly, key decisions for the electricity sector (cross-subsidisation of electricity tariffs, 
re-negotiation  of  the  Purchase  Power  Agreements)  were  deferred  to  2020.  The  above 
reforms are expected to be implemented in the context of the new IMF programme (and 
in the context of the World Bank programme approved in June 2019 for Public-Private 
Partnerships). 

1.3. Implementation of macro-financial assistance 

On 14 December 2016, the co-legislators adopted a decision5 to provide additional MFA 
to  Jordan  (MFA  II)  of  up  to  EUR 200 million,  entirely  in  loans,  as  a  follow-up  to  the 
EUR 180 million  operation  completed  in  2015.  The  MoU  between  the  EU  and  Jordan 
was signed on 19 September 2017.  

The  first  disbursement  (EUR  100  million)  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. It was disbursed on 17 October 2017. 

The second and final instalment (EUR 100 million) was subject, aside from the political 
preconditions  and  good  progress  with  the  IMF  programme,  to  specific  policy 
conditionality  agreed  between  Jordan  and  the  EU  in  the  MoU.  These  policy  conditions 
aim to strengthen Jordan’s economy in the areas of the public finance management, the 
tax policy, the social safety nets, the educational system and the professional training and 
the labour market policies with an aim at increasing employment opportunities for both 
Jordanian  citizens  and  Syrian  refugees  living  in  Jordan.  The  second  instalment  was 
disbursed on 3 July 2019 as all conditions were met.  

Indeed,  on  1  May  2019,  Jordan  adopted  a  new  by-law  on  public  procurement,  having 
drawn on technical advice from the World Bank. The new by-law addressed the issue of 
the  appeals  system  by  foreseeing  a  two-layer  system  for  examining  complaints.  This 
marked the compliance with the last remaining condition of the MFA-II programme. 

The second review under the IMF programme 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.  

The adoption of a new by-law on public procurement and the completion of the second 
programme  review  by  the  IMF  Board  enabled  the  Commission  to  adopt,  on  24  June 
2019, the decision for the second and last disbursement (EUR 100 million) of the MFA-
II programme. The actual disbursement of the funds took place on 3 July 2019. 

During 2019, the economy continued to operate in an environment of weak growth and 
low  investments.  As  a  result  of  this,  considerable  external  financing  needs  re-emerged. 
At  the  ‘London  Initiative’  conference  in  February  2019  and  following  on  from  that, 
Jordan received from the international community additional financing commitments of 
about  USD  5  billion  for  the  period  2019-2023  to  meet  financing  needs,  improve  debt 
sustainability and give the necessary breathing space for critical reforms.  

5 Decision (EU) 2016/2371 of the European Parliament and of the Council of 14 December 2016 providing 
further macro-financial assistance to the Hashemite Kingdom of Jordan (OJ L 352, 23.12.2016, p. 18). 

12 

 
 
                                                           
In  this  context,  the  Commission  received,  on  11  July  2019,  a  request  for  a  new  MFA 
programme  (of  EUR  500  million)  by  the  Jordanian  authorities.  In  response,  on 
6 September 2019 the Commission adopted a proposal for a third MFA programme for 
Jordan,  in  the  amount  of  EUR  500  million  in  loans.  The  proposal  was  adopted  by  the 
European Parliament and the Council on 15 January 2020. It envisages the disbursement 
of  EUR  300  million  in  2020  and  of  EUR  200  million  in  June  2021,  depending  on 
programme  implementation.  Following  the  adoption  of  the  programme,  Commission 
staff  engaged  in  discussions  with  the  Jordanian  authorities  on  the  conditions  of  the 
programme  which  will  be  included  in  the  MoU.  An  agreement  on  the  programme 
conditions will enable the Commission to move ahead with the first disbursement, if the 
related pre-conditions are met.  

On 30 January 2020, the IMF and Jordan reached a staff-level agreement on a four-year 
arrangement under the Extended Fund Facility (EFF) for around USD 1.3 billion. This 
agreement was approved by the Executive Board on 25 March 2020. 

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 share 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,  although  the  government  opened  up  22  new  economic  sectors  to  foreign 
investments in 2019.  

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 maintaining exchange rate stability, while 
also ensuring price stability and promoting growth. 

13 

 
 
6. Public finances and taxation 

In  2007-2019,  Jordan’s  tax-to-GDP  ratio  dropped  from  20.4%  to  15.5%,  reflecting  structural 
weaknesses  in  the  taxation  system:  a  high  exemption  threshold  in  income  tax,  widespread  tax 
exemptions  and  capacity  constraints  in  tax  administration.  There  is  scope  for  revenue 
mobilisation policies including strengthening tax administrration.  

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  investor  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. 

3. 

MOLDOVA 

1.4. Macroeconomic performance 

In 2019, GDP increased by 3.6% in real terms after a significant slowdown in the fourth 
quarter. Growth in the first three quarters of 2019 was driven by a surge in investments 
and a rise in household consumption supported by growing real wages. The slowdown in 
the fourth quarter of 2019 was caused by  a  cut  in  public investments  and consumption 
due to a set of fiscal measures introduced in August and that the effects on demand of a 
cut  in  tax  rates  introduced  in  October  2018  were  fading.  On  the  supply-side,  main 
contributors to growth in 2019 were construction (up by 15.919.0%), wholesale and retail 
trade (5.7%), IT (9.2%), and industry (2.4.8%) together adding 3.5 percentage points to 
the growth figure. Agriculture was contracting with 0.2% in 2019. 

Inflation  accelerated  quickly  in  2019  to  7.5%  in  December  (year-on-year),  following  a 
depreciation of the currency, decreases in the rates of personal income taxes and social 
contributions,  and  large  increases  in  public  sector  wages.  It  is  however  expected  that 
inflation will decline in 2020 towards the target of the National Bank of Moldova of 5% 
±1.5% as the impact of the factors driving inflation in 2019 will fade. The National Bank 
decreased the base interest rate by two percentage points to 5.5% in December 2019. 

Following  fiscal  stabilisation  in  the  2017-2018,  the  fiscal  situation  deteriorated  in  the 
first half of 2019 due to a set of election-related reforms and an interruption of external 
financing.  Some  measures  to  stabilise  the  fiscal  situation  were  however  adopted  in 
August 2019 as part of an agreement with the IMF. Following these corrective measures, 
the budget deficit for 2019 ended at of 1.5% of GDP. Public debt was 31.0% of GDP in 
Q3 2019. About 80% of the public debt is long-term, mostly with IFIs and the rest with 
bilateral official creditors.  

The  12-month  rolling  current  account  deficit  widened  significantly  in  the  last  years  to 
11.5%  of  GDP  in  the  third  quarter  2019  compared  to  5.8%  of  GDP  in  2017.  The 
increased 
deterioration  reflects  stronger  growth 
consumption demand. However, the value of imports has stagnated in the second half of 
2019  and  increased  by  only  1%  in  2019.  Exports  increased  by  3%  in  2019  driven  by 
higher  trade  with  Turkey  and  Russia.  The  growth  of  exports  to  the  EU,  which  had 

in  non-energy 

imports  due 

to 

14 

 
increased quickly in the last years, stopped in 2019 and exports to the EU remained at the 
same level as in 2018.   

Foreign direct investment has been significantly lower than before the 2014/2015 crisis 
in the last  years. In 2019, however, the inflow of FDI increased to much higher  figures 
(5.1% of GDP in the third quarter on a 12-month basis), related to a Eurobond issued by  
a large Moldovan company in the agricultural sector registered in Cyprus. The growth of 
remittances  has  stabilised  at  around  15%  of  GDP  in  the  last  years,  a  level  lower  than 
before the 2014 crisis. 

The reserves level is still well above the target stipulated in the IMF programme, as the 
central bank continued to build up international reserves in the last years reaching USD 
3.1  billion  at  the  end  of  2019  or  about  five  months  of  imports  of  goods  and  services. 
Total  external  debt  has  continued  to  decrease,  reaching  63.0%  of  GDP  at  the  end  of 
September 2019, down from 66.0% of GDP at end-2018. 

1.5. 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.   

The  reform  progress  in  2019  has  been  mixed  and  to  a  large  extent  influenced  by  the 
change of governments in June 2019 and then again in November.  

Monetary  and  fiscal  policies  have  been  strengthened  in  the  last  years  and  substantial 
structural economic reforms have been carried out. 

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.  In  2019,  new  capital  adequacy  requirements  in  line  with  the  EU’s 
CRDIV/CRR  package  were  approved.  As  a  result  of  the  banking  sector  reforms, 
including in particular the regulatory and supervisory framework, Moldovan banks have 
become  more  resilient  and  safe.  The  banks  are  now  well-capitalised,  liquid  and 
profitable.  

the  Criminal  Assets  Recovery  Agency  and 

Some positive developments related to the fight  against corruption were noted in 2019, 
including an increase of the annual budget of anti-corruption institutions like the National 
the  Financial 
Integrity  Authority, 
Investigation  Unit,  the  development  of  a  draft  Justice  Sector  Reform  Strategy  for  the 
years  2020–2023,  and  the  establishment  in  June  2019  by  the  Parliament  of  a  new 
commission  to investigate all circumstances  of the 2014 banking fraud. However, legal 
proceedings  against  key  actors  involved  in  the  bank  fraud  continue  to  be  slow  and 
progress in recovering assets, in particular from outside of Moldova, has been limited. 

1.6. Implementation of macro-financial assistance 

On 13 September 2017, the European Parliament and the 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 

15 

 
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 were tasked with monitoring the fulfilment of this pre-condition throughout the 
lifecycle of the macro-financial assistance. 

A MoU 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 on 18 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.  

Following the  change of government  in  June 2019 and renewed reform  efforts,  the EU 
released the first instalment in October 2019. One final remaining MoU condition of the 
second disbursement related to public procurement in utility companies (Action 13) was 
fulfilled  in  January  2020.  However,  the  second  instalment  has  not  yet  been  disbursed 
pending the fulfillment of certain actions in connection with the political pre-conditions, 
specifically related to anti-corruption, reforms in  the justice sector, and investigation of 
the 2014 bank fraud. The MFA programme expires in July 2020. 

The  IMF  programme,  consisting  of  ECF/EFF  arrangements  in  a  total  amount  of  SDR 
129.4  million  (about  USD  178.7  million,  or  75%  of  the  Republic  of  Moldova’s  quota) 
was  approved  on  7  November  2016.  After  the  programme  was  off  track  following  the 
adoption  of  the  controversial  fiscal  package  in  July  2018,  the  fourth  and  fifth  reviews 
were concluded in September 2019, which made available SDR 24 million (about USD 
33.8 million). The IMF Executive Board adopted the final sixth review of the programme 
in March 2020, concluding that the programme has been broadly successful in achieving 
its objectives, with comprehensive reforms having rehabilitated the banking system and 
strengthened financial sector governance, entrenching macro-financial stability.  

16 

 
 
 
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 

The  National  Bank  of  Moldova  follows  a  flexible  exchange  rate  policy  and  intervenes  on  the 
market  to  smooth  excessive  volatility,  while  letting  the  exchange  rate  operate  to  help  absorb 
external shocks.  

4. Foreign direct investment 

There  are  no  controls  on  inward  investment.  Some  efforts  have  been  made  to  stimulate  FDI, 
notably through the creation of Free Economic Zones. The DCFTA has created further stimulus 
to FDI from the EU. Some positive progress examples exist, primarily in the automotive sector. 

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 

In 2018, a 12% flat rate income tax was introduced (the earlier system had two levels: 7% and 
18%)  and  social  contributions  were  decrease  from  23%  to  18%.  To  compensate  for  these 
changes,  a  set  of  measures  to  strengthen  revenue  was  introduced  in  2019,  including  the 
broadening of the capital gains tax base, an increase in the VAT rate for hotels and resaurants, a 
phasing out of personal allowances for higher incomes, and limitations for tax-free sales. 

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.  Limited  progress  on  the 
privatisation agenda was noted in 2019, but the new government intends to revitalise it in 2020. 
The  Law  on  State-Owned  Enterprise  and  Municipal  Enterprise  adopted  in  late  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 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), strengthened governance and increased 
international  ownership  in  remaining  systemic  banks,  and  an  introduction  of  a  strengthened 
regulatory  and  supervisory  framework  for  banks  (aligning  with  Basel  III  standards)  and  non-
financial institutions, particularly in the insurance sector.  

17 

 
 
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. The banking system remains well capitalized, but several banks do 
not comply with the regulatory liquidity requirements. 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. The EU approved Tunisia’s removal from the grey list of non-
cooperative tax jurisdictions in March 2019. 

18 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4. 

GEORGIA 

1.7. Macroeconomic performance 

In  2019,  Georgia’s  real  GDP  is  estimated  to  have  increased  by  5.2%,  driven  by  both 
domestic  and  external  demand.  In  terms  of  demand  components,  private  consumption 
and  net  exports  were  the  main  drivers  of  growth,  bolstered  by  lari  depreciation, 
expansion  of  credit  and  higher  remittances.  On  the  supply  side,  Georgia’s  economic 
growth is mainly fuelled by growth in services (especially ICT, transport and and trade).  

The unemployment  rate  in  Georgia has been on  a downward trend since  2009 (18.3%) 
but it remains high (11.1% in the third quarter of 2019) despite robust economic growth.  
Skills mismatch and large regional disparities are important challenges. The fiscal deficit 
of the general government has increased from below 0.9% of GDP in 2018 to over 3% of 
GDP in 2019, according to the preliminary data, mainly due to high capital expenditures 
for infrastructure. The ratio of public debt to GDP was around 46% in 2019, increasing 
from 42% of GDP in 2018.  

Consumer price inflation accelerated to 7% in December 2019 from 1.5% a year before 
on the back of currency depreciation, higher prices of tobacco and some foodstuffs. The 
central bank has reacted by raising the refinancing rate by a cumulative 250 basis points 
in  the  second  half  of  the  year.  In  consequence  of  this  decision,  inflation  has  started 
falling again since January 2020.  

Regarding the exchange  rate, the Georgian lari  has depreciated by  6%  against the euro 
and by 8% against the US dollar in 2019. 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 current account deficit narrowed by more than a half to USD 351 billion in the 
first  three  quarters  of  2019,  This  represents  3%  of  GDP  in  this  period.  This  outcome 
reflects  a  combination  of  growing  merchandise  exports  (10%  year-on-year)  and  stable 
imports.  Exports  were  boosted  by  solid  demand  from  major  trading  partners  and  also 
supported  by  the  lari  depreciation.  A  smaller  deficit  in  income  payments,  a  slightly 
improved surplus in services and an increased inflow of remittances also contributed to 
the substantial current account adjustment.  

Foreign  direct  investment  (7.5%  GDP  in  the  first  three  quarters  of  2019)  remains  the 
main source of inflows.  Georgia’s international  reserves have been increasing in  recent 
years, totalling USD 3.5 billion at end-2019 (almost 4 months of import cover).  

1.8. Structural reforms 

Georgia’s  structural  reform  agenda  focuses  on  further  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 are preparing a 
new  insolvency  law  supporting  adequate  protection  of  creditor  rights  and  timely  and 
efficient insolvency processes in line with international standards. A new Company Law 
has been drafted to regulate corporate relations and to approximate the legislation to the 
EU  directives;  it  still  needs  to  be  submitted  to  the  Parliament.  The  authorities  have 
continued improving the revenue administration, e.g. by automatically processing VAT 
declarations  and  refunding  VAT  credits.  The  authorities  are  also  pursuing  land  reform, 
with the Law on Agricultural Land adopted in June.  

19 

 
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. The authorities have begun implementing the teachers’ retirement scheme, with 
about  6,400  out  of  the  12,000  eligible  teachers  choosing  to  retire;  a  second  round  is 
ongoing. The government announced also a new education programme, with a declared 
increase of state funding to 6% of GDP by 2022.    

Georgia  continues  investing  in  transport  infrastructure,  despite  some  delays.    The 
authorities have signed the remaining contracts required for the construction of the East-
West  highway  and  and  began  construction  on  the  critical  section  of  the  North-South 
highway  corridor.  The  contract  with  a  Georgian  consortium  for  the  development  of 
Anaklia  deepwater  port  was  cancelled  in  January  2020  due  to  insufficient  funding  and 
lack of government guarantees for project-related loans.  

In the financial sector, the National Bank of Georgia is strengthening the regulatory and 
supervisory frameworks for banking, non-banking, payments, and capital and securities 
markets, and resumed publishing a yearly Financial Stability Report in September 2019. 
The  authorities  plan  to  adopt  legislation  that  makes  the  emergency  liquidity  assistance 
and  banking  resolution  frameworks  consistent  with  best  international  practice.  The 
authorities  are  developing  the  country’s  capital  markets.  Georgia  introduced  a  second 
(funded)  pillar  of  the  pension  system  with  effect  from  January  2019  and  plans  to 
introduce mandatory third-party vehicle insurance, 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)  
and other existing Free Trade Agreements (FTA), the authorities continue their efforts to 
advance new FTAs, including with the United States and India. 

Georgia’s  national  reform  agenda  is  supported  by  MFA  conditionality.  For  example, 
conditions of the current MFA operation notably require an improved public investment 
management  framework,  continuation  of  land  registration  and  education  reforms, 
introduction of mandatory third-party vehicle insurance, submission to the Parliament of 
a new Company Law, and reducing direct procurement. 

1.9. 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.  The  European  Parliament 
and the Council adopted the Decision on further MFA for up to EUR 45 million (EUR 10 
million in grants and EUR 35 million in loans) in April 2018. Aside from covering part 
of  Georgia’s  financing  needs  and  supporting  structural  reforms,  further  MFA 
complements  IMF  funds  (USD  290  million)  under  a  an  Extended  Fund  Facility  (EFF) 
programme with Georgia, approved in April 2017 and recently extended to April 2021. 
Following the  entry into force of the MoU  and the accompanying  agreements, 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 second (final) instalment of EUR 25 million (EUR 5 million in grants and EUR 20 
million in loans) is subject, aside from the political preconditions and good progress with 
the  IMF  programme,  to  specific  policy  conditionality  agreed  between  Georgia  and  the 

20 

 
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 will 
take  place  when  Georgia  meets  all  relevant  conditions.  Georgia  has  implemented  the 
majority of the reforms envisaged under the MFA; the main outstanding condition relates 
to the law on enterpreneurs being submitted to Parliament.  

21 

 
 
 
STATUS OF ECONOMIC REFORMS — GEORGIA 

1. Price liberalisation  

Prices are largely market-driven. 

2. Trade regime 

Georgia (a 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 (7.2% of GDP in 2019) have consistently been among the highest in the region. 

5. Monetary policy 

The  Central  Bank  of  Georgia’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-2019, 56% of loans and 62% of deposits were denominated in foreign currency. 

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.  

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.  According  to  the  recent  Financial 
Stability Report, the liquidity coverage ratio is well above the required 100% in both domestic 
and foreign currencies. The banking sector remains well capitalised against potential shocks, with 
the capital adequacy ratio around 19%. 

22 

 
5. 

UKRAINE 

5.1. Macroeconomic performance  

After  the  economic  and  financial  crisis  from  2014-2015,  which  had  its  seeds  in  ill-
designed government deficits engineered during the preceding two-year long stagnation, 
the  economy  of  Ukraine  renewed  with  continuous  and  accelerating  growth,  which 
reached almost 4% in 2019. While the economic revival has been demand-driven, gross 
fixed capital formation has remained low at its historically subdued level of about 17% of 
GDP.  The  economic  expansion  occurred  primarily  in  the  construction,  agricultural  and 
retail  sectors,  while  industrial  output  has  been  lagging  behind.  The  unemployment  rate 
decreased to  8.5% in  the second quarter of 2019  from  its peak at  10.1% in  early 2017. 
Thanks to a year-on-year growth rate of 16.4% in October 2019, implying an increase in 
real  terms  of  about  11%,  the  average  nominal  wage  reached  the  equivalent  of  around 
USD 430. 

Consumer price inflation stabilised quicker than expected and went below the 5% mid-
term  target  for  the  first  time  in  December  2019.  This  allowed  the  National  Bank  of 
Ukraine  (NBU)  to  pursue  its  policy  of  aggressively  cutting  the  main  refinancing  rate, 
which  declined  from  18%  in  mid-March  2019  to  11%  as  from  end-January  2020.  The 
monetary  easing  aims  to  expand  bank  credit  to  the  private  sector,  which  has  been 
stagnating since 2016. 

The  Ukrainian  economy  remained  very  open  to  the  world,  with  combined  exports  and 
imports  in  excess  of  its  annual  GDP.  Consistent  with  accelerating  growth  and 
strengthened  internal  demand,  the  trade  deficit  has  widened  to  the  pre-crisis  level  of 
around 9% of GDP. The Association Agreement with the European Union has triggered 
structural changes that show a stronger integration of the economy of Ukraine with the 
West. For instance, remittances from abroad fully finance the trade deficit, and represent 
more  than  four  times  foreign  direct  investment.  Thanks  to  the  overall  positive 
developments in the balance of payments since 2015, international official reserves were 
replenished and exceeded USD 25 billion, i.e. more than 4 months of imports, at the end 
of 2019. The revived capital inflows and improved confidence also strengthened demand 
for the domestic currency, which appreciated by 16% in 2019 and prompted the NBU to 
intervene in the forex market to purchase USD 7.9 billion of liquidity, almost six times 
more than in 2018. 

In  this  positive  macroeconomic  context,  the  government  of  Ukraine  managed  to  take 
control  of  its  public  finances.  Starting  from  2015,  the  State  successfully  cut  its 
consolidated  fiscal  deficit  by  half  and  maintained  it  below  or  very  close  to  the  two-
percent threshold. Thanks to economic growth, but also to inflation, the state and state-
guaranteed  debt  declined  from  97%  of  GDP  in  2016  to  56%  of  GDP  in  2019.  The 
government  is  following  a  successful  medium-term  debt  strategy  of  extending  the 
maturity, diversifying the currency and reducing the cost of its indebtedness. The latest 
Eurobond issuance from end-January 2020, with a ten-year maturity and a yearly yield of 
4.5%  in  EUR,  was  over-subscribed  six  times.  Relative  to  half  a  year  ago,  the 
corresponding  seven-year  yield  eased  by  more  than  280  basis  points.  Credit-rating 
agencies  have  shared  investors’  improved  confidence.  Fitch  and  S&P  upgraded  their 
sovereign rating from B- to B on 6 and 27 September 2019 respectively. Moody’s issued 
a  positive  outlook  on  22  November  2019.  In  line  with  these  assessments,  the  cost  of 
domestically funded public debt was almost halved last year, from 19% in early 2019 to 
10% in January 2020. 

In  sum,  the  latest  macroeconomic  developments  in  Ukraine  feature  stable  and 
accelerating  real  growth,  abating  inflation,  restored  demand  for  the  national  currency, 

23 

 
lower  interest  rates  and  generally  improved  investors’  confidence.  The  macro-financial 
situation of Ukraine stabilised in late 2017 already and has been strengthening since then. 
However, confidence eroded abruptly, and yields on Eurobonds almost tripled in March 
2020, due to higher uncertainty trigerred by the government reshuffle from end-February, 
and  especially  by  the  outburst  of  the  coronavirus-related  crisis.  While  the  situation  has 
stabilised in early April, it is unlikely that the government could finance all its funding 
needs in 2020 on domestic and international financial markets. Moreover, economic risks 
and challenges remain in the form of possible policy and confidence reversals, a sizable 
debt-repayment burden in 2020 and 2021, the need for a sustained increase in investment 
to close a significant gap in capital accumulation, and sought-after improvements in the 
business environment, notably concerning rule of law and competition.  

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 2019 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  took  place  in  late  2019  and  early  2020.  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 the 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  a  missing  element  in  the  anticorruption  enforcement  chain,  was 
adopted in June 2018. The court became fully operational in 2019. The authorities also 
operationalised  the  compulsory  electronic  asset  declaration  system  for  public  officials 
and  performed  a  complete  check  of  more  than  1,000  highly  relevant  declarations.  The 
company  registration  process  was  updated  and  all  useful  databases  were  connected  to 
ensure  effective  verification  of  information,  including  on  companies’  beneficial 
ownership, by the various corruption-fighting agencies in Ukraine.  In order to ensure an 
improved framework for fighting and preventing money laundering, Ukraine adopted in 
December 2019 an anti-money laundering law in line with the EU-Ukraine Association 
Agreement. 

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. The electricity retail market was opened to 
large  consumers  from  January  2019  and  the  wholesale  electricity  market  was  opened 
from July 2019, although a number of issues hamper the functioning of and competition 

24 

 
in  the  market.  In  December  2019,  Ukraine  and  Russia  signed  an  agreement  that 
guarantees  the  transit  of  gas  from  Russia  to  the  EU  through  Ukraine  for  a  further  five 
years. 

The situation of the financial sector continues to improve, with strengthened capital and 
liquidity  ratios,  as  well  as  higher  profitability.  While  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), independent supervisory boards were 
set up and were filled with recognised experts by end-2019.  

In  the  area  of  social  policies,  substantial  progress  has  been  made  in  the  reform  of 
healthcare  financing,  with  the  launch  of  the  National  Health  Service  which  signed 
contracts with primary health providers. Household subsidy reforms progressed well with 
the launch of a subsidy monetisation (since early 2019 subsidies have been paid directly 
to households and no more to utility companies) and an eligibility verification. Ukraine 
also continued a pension reform started in 2017, in order to make the system less costly 
for the state while ensuring more adequate pension income for the majority of retirees. 

Finally,  despite  progress  with  reform  implementation,  challenges  remain  related  to 
demonopolisation,  even-handed  protection  of  property  rights,  cutting  vested  oligarchic 
interests  and  reducing  the  regulatory  burden.  Addressing  these  remaining  challenges  is 
crucial  to  improve  the  business  climate  and  to  attract  and  retain  investors.  The 
sustainability and inclusiveness of economic growth in Ukraine depend on the extent to 
which these remaining structural bottlenecks (to investment) are successfully removed. 

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 this 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  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  14-month  Stand-By 
Arrangement of USD 3.9 billion. The SBA replaced Ukraine’s previous Extended Fund 

25 

 
Facility  (EFF)  programme  to  provide  an  anchor  for  economic  policies  during  2019  (an 
election year). The IMF Board approved the Stand-by Arrangement in December 2018, 
with a first disbursement of USD 1.4 billion. 

The first disbursement under MFA IV 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 the implementation effort of MFA 
IV  first  tranche  conditions,  Ukraine  made  significant  progress  in  the  areas  of  anti-
corruption  policy  that  had  blocked  the  final  disbursement  under  MFA  III.  The  second 
instalment (of EUR 500 million) was disbursed in May 2020, after the single outstanding 
prior action (on strengthening financial sector safeguards from the December 2019 staff-
level  agreement  reached  between  the  Ukrainian  authorities  and  the  IMF  on  a  new  EFF 
programme) has been implemented. 

26 

 
 
 
STATUS OF ECONOMIC REFORMS — UKRAINE 

1.  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 the gas retail market from 2020. 

2.  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. 

3.  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. 

4.  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 2019. 

5.  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 2019, inflation  
was reduced from 9.8% at the end of 2018 to 4.1% at the end of 2019. The inflation target of 5% 
+/- 1 percentage point was therefore achieved.   

6.  Public finances and taxation 

Ukraine has made significant progress in the consolidation of its public finances in recent years; 
the fiscal deficit in 2019 was around 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 
and customs administration reform remain high on the agenda. 

7.  Privatisation and enterprise restructuring 

Despite ambitious privatisation plans, no major sales of state assets took place in 2019. 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.  

8.  Financial sector 

The situation of the financial sector continues to improve, with improving capital and liquidity 
ratios and better supervisory standards. The very high share of non-performing loans (55.1% as a 
whole, 65.4% in state-owned banks) and the quality of governance of state-owned banks remain 
challenging.  

27 

 
 
 
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  

Tunisia  

2016 

2017 

2018 

2019 

2020 

Real GDP 
Inflation (end of period)  
Unemployment rate 

(% change) 
(% change) 
(% labour force) 

General government net 
lending/borrowing 
Current account balance 
Gross official reserves 
Total gross external debt 

(% of GDP) 
(% of GDP) 
(months of imports) 
(% of GDP) 

1,2 
4,2 
15,5 

-6,2 
-9,3 
3,1 
66,9 

1,9 
6,2 
15,5 

2,7 
7,5 
15,5 

-5,9 
-10,3 
2,6 
84,3 

-4,6 
-11,2 
2,5 
97,3 

1,0 
6,1 
14,9 

-3,9 
-8,8 
5,2 
90,3 

-4,3 
6,0 
n/a 

-4,3 
-7,5 
3,6 
109,9 

Sources: IMF World Economic Outlook Database (April 2020), IMF Regional Economic Outlook (April 2020) 

Forecast years: 2019-2020 

Jordan 

2016 

2017 

2018 

2019 

2020 

Real GDP 
Inflation (end of period)  
Unemployment rate 

(% change) 
(% change) 
(% labour force) 

General government net 
lending/borrowing 
Current account balance 
Gross official reserves 
Total gross external debt 

(% of GDP) 
(% of GDP) 
(months of imports) 
(% of GDP) 

2,1 
0,8 
15,3 

-3,7 
-9,8 
8,1 
66,3 

2,1 
3,2 
18,3 

-3,6 
-10,8 
8,1 
69,6 

1,9 
3,6 
18,6 

-4,7 
-7,0 
7,9 
69,0 

2,0 
0,6 
19,1 

-6,1 
-2,8 
9,2 
68,5 

-3,7 
1,4 
n/a 

-6,7 
-5,8 
9,0 
76,2 

Sources: IMF World Economic Outlook Database (April 2020), IMF Regional Economic Outlook (April 2020) 

Forecast years: 2019-2020 

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

28 

 
 
  
  
 
 
 
 
 
  
  
 
 
 
 
 
  
  
 
 
 
 
 
  
  
  
  
  
  
  
 
 
 
  
  
 
 
 
 
 
  
  
 
 
 
 
 
  
  
 
 
 
 
 
  
  
  
  
  
  
  
 
 
 
                                                           
Moldova 

2016 

2017 

2018 

2019 

2020 

Real GDP 
Inflation (end of period)  
Unemployment rate 

(% change) 
(% change) 
(% labour force) 

4,4 
2,4 
4,2 

4,7 
7,3 
4,1 

4,0 
0,9 
3,0 

3,6 
7,5 
3,0 

-3,0 
0,5 
3,0 

General government net 
lending/borrowing 
Current account balance 
Gross official reserves 
Total gross external debt 

(% of GDP) 
(% of GDP) 
(months of imports) 
(% of GDP) 

-1,8 
-3,5 
4,9 
76,8 

-0,8 
-5,7 
5,3 
70,5 

-1,1 
-10,7 
5,5 
66,4 

-1,5 
-8,9 
5,2 
63,6 

-5,5 
-8,3 
4,9 
64,7 

Sources: IMF World Economic Outlook Database (April 2020), IMF Country Report (March 2020) 
Forecast years: 2019-2020 

Georgia 

. 

2016 

2017 

2018 

2019 

2020 

Real GDP 
Inflation (end of period)  
Unemployment rate 

(% change) 
(% change) 
(% labour force) 

General government net 
lending/borrowing 
Current account balance 
Gross official reserves 
Total gross external debt 

(% of GDP) 
(% of GDP) 
(months of imports) 
(% of GDP) 

2,9 
1,8 
14,0 

-1,5 
-12,5 
3,4 
92,0 

4,8 
6,7 
13,9 

-0,5 
-8,1 
3,4 
90,5 

4,8 
1,5 
12,7 

-0,8 
-6,8 
3,5 
86,4 

5,1 
7,0 
11,6 

-1,8 
-5,1 
5,4 
89,4 

-4,0 
3,5 
n/a 

-7,5 
-10,5 
3,9 
102,8 

Sources: IMF World Economic Outlook Database (April 2020), IMF Regional Economic Outlook (April 2020) 
Forecast years: 2019-2020 

Ukraine 

2016 

2017 

2018 

2019 

2020 

Real GDP 
Inflation (end of period)  
Unemployment rate 

(% change) 
(% change) 
(% labour force) 

2,4 
12,4 
9,5 

2,5 
13,7 
9,7 

General government net 
lending/borrowing 
Current account balance 
Gross official reserves 
Total gross external debt 

(% of GDP) 
(% of GDP) 
(months of imports) 
(% of GDP) 

-2,2 
-1,5 
3,0 
120,7 

-2,2 
-2,2 
3,2 
102,9 

3,3 
9,8 
9,0 

-2,2 
-3,3 
3,3 
87,7 

3,2 
4,1 
8,5 

-2,0 
-0,7 
4,0 
79,5 

-7,7 
7,7 
10,1 

-8,2 
-2,0 
n/a 
n/a 

Sources: IMF World Economic Outlook Database (April 2020), National authorities 
Forecast years: 2019-2020 

29 

 
 
  
  
 
 
 
 
 
  
  
 
 
 
 
 
  
  
 
 
 
 
 
  
  
  
  
  
  
  
 
  
 
 
 
 
 
  
  
 
 
 
 
 
  
  
 
 
 
 
 
  
  
  
  
  
  
  
 
  
  
 
 
 
 
 
  
  
 
 
 
 
 
  
  
 
 
 
 
 
  
 
 
  
  
  
  
  
  
 
 
 
Annex 2: MFA operations by date of decision, 1990-2019 

30 

Country199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019TotalNumber of operationsBulgaria2901102501007504Czech & Slovak Fed. Rep.3753751Estonia40401Hungary87018010502Latvia80801Lithuania1001001Romania375801252007804Slovakia1301301Algeria4002006002Israel187,5187,51Jordan1802003802Lebanon80801Tunisia3005008002Armenia581001582Belarus55551Georgia17533,5464645345,55Moldova4515151545901003257Ukraine8520015011050010001800100048458Albania703520251504Bosnia & Herzegovina60601002203Kosovo (UNSCR 1244)3530501153Macedonia (FYR)4080181383Montenegro20201Serbia2002001Serbia & Montenegro345130705453Tajikistan95951Kyrgyz Republic30301Amount approved87018084800620255155231504601653933157025083,512504465900025613001800700100104501259412594No. of operations approved1660621415434110220420032121206666Acecssion and Pre-AccessionCurrent Member States*Neighbourhood SouthMFA Operations 1990 - 2019 by Date of DecisionNeighbourhood EastOther 
 
 
 
Annex 2A: Status of disbursements made by date of decision at end-December 2019 

31 

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 
 
32 

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 
 
 
 
33 

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 
 
 
 
34 

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 
 
 
35 

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 500,0(Loan)June 2019150Oct. 2019150Jordan14.12.162016/2371/EU  200,0Oct. 2017100 200,0(Loan)July 2019100Moldova13.09.172017/1565/EU 100,0Oct. 201930 30,0 70,0(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 594,010 357,02 237,0 
 
36 

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  disbursements  made  by  region  at  end-December  2019  (in 
millions of €) 

37 

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 
 
  
 
38 

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) 
 
39 

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) 
 
   
 
40 

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 
 
41 

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 
  
 
42 

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 500,0(Loan)June 2019150Oct. 2019150Jordan14.12.162016/2371/EU  200,0Oct. 2017100 200,0(Loan)July 2019100TOTAL D2 047,51 907,5 140,0TOTAL A+B+C+D12 594,010 357,02 237,01 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, 2005-2019 (EUR million) 

Chart 3A: MFA amounts authorised by year, 2006-2019 (EUR million) 

Chart 3B: MFA amounts authorised by region, 2006-2019 (%) 

Other 
1% 

Pre-Accession 
6% 

Neighbourhood 
South 
20% 

[CATEGORY 
NAME] 
[PERCENTAG
E] 
(Ukraine: 67%) 

43 

20062007200820092010201120122013201420152016201720182019TotalBy 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  0,0  0,0  256,0 1 300,0 1 800,0  700,0  100,0 1 045,0  0,0 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, 2006-2019 (EUR million) 

Chart 4A: MFA amounts disbursed by year, 2006-2019 (EUR million) 

Chart 4B: MFA amounts disbursed by region, 2006-2019 (%) 

Other  
1% 

[CATEGORY 
NAME]  
[VALUE] 

[CATEGORY 
NAME]  
[VALUE] 

[CATEGORY 
NAME]  
[VALUE] 
(Ukraine: 63%) 

44 

20062007200820092010201120122013201420152016201720182019TotalBy regionAccession and Pre-Accession  32,0  30,0  100,0  100,0  262,0Neighbourhood East  29,0  20,0  25,0  15,3  70,7  81,0  69,0 1 360,0  873,0  623,0  520,0  30,0 3 716,0Neighbourhood South  15,0  25,0  380,0  400,0  400,0 1 220,0Other  15,0  15,0  30,0Total amounts disbursed  61,0  20,0  40,0  40,3  100,7  181,0  69,0  100,0 1 360,0 1 268,0  15,0 1 023,0  520,0  430,0 5 228,0Loans  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  420,0 4 872,0Grants  42,0  20,0  40,0  15,3  100,7  55,0  30,0  23,0  5,0  10,0  5,0  10,0  356,01 More detailed information is available in the statistical data of the staff working document 
 
 
 
 
 
Annex  5:  Outstanding  amounts  in  respect  of  MFA  operations  disbursed  (as  at  31 
December 2019) 

Country 

Ukraine 

Tunisia 

Jordan 

Bosnia and Herzegovina 

Armenia 

Georgia 

Moldova 

Others (Kyrgyz Republic, 
Albania, Serbia, Montenegro, 
fYRoM) 

Outstanding capital in 
respect of MFA operations 
disbursed  
(in EUR millions)  

3.310,00 

800,00 

380,00 

94,00 

65,00 

38,00 

20,00 

21,60 

Total 

4.728,60 

Chart 5B: Country share of outstanding capital in respect of MFA operations disbursed  

Jordan 
8% 

Tunisia 
17% 

Ukraine

Tunisia

Jordan

Bosnia and Herzegovina

Armenia

Georgia

Moldova

Others (Kyrgyz Republic,
Albania, Serbia, Montenegro,
fYRoM)

Ukraine 
70% 

45