COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE EVALUATION of Decisions (EU) 2016/1112 and (EU) 2016/2371 of the European Parliament and of the Council providing Macro-Financial Assistance to Jordan and Tunisia (2016-2019)
Date: 2022-09-27
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: European neighbourhood policy, Jordan, Tunisia, democratisation, economic development, economic reform, economic stabilisation, financial aid, macroeconomics, structural adjustment

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   EUROPEAN COMMISSION  Brussels, 27.9.2022  SWD(2022) 301 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE EVALUATION  of Decisions (EU) 2016/1112 and (EU) 2016/2371  of the European Parliament and of the Council providing Macro-Financial Assistance to Jordan and Tunisia (2016-2019) {SWD(2022) 300 final}  
 
 
In 2016, the European Parliament and Council adopted  macro-financial assistance (MFA-II) 
operations  of  EUR 200  million  to  Jordan  and  EUR 500  million  to  Tunisia  respectively,  to 
support  them  in  addressing  serious  balance-of-payment  (BoP)  difficulties.  These  operations 
followed  previous  EU  macro-financial  assistance  interventions  (MFA-I)  in  the  respective 
countries,  as  both  countries  continued  to  deal  with  serious  economic  challenges,  driven 
mostly by regional insecurity and the Syrian refugee influx in the case of Jordan and domestic 
security  threats  and  the  repercussions  of  the  crisis  in  Libya  in  the  case  of  Tunisia.  Both 
operations  were  disbursed  in  full,  in  several  instalments,  between  October  2017  and 
November 2019. 

ICF  NEXT,  in  cooperation  with  Cambridge  Econometrics,  was  appointed  as  external 
contractor  to  undertake  the  ex-post  evaluation  of  the  respective  MFA-II  interventions  to 
Jordan and Tunisia, on which the accompanying Commission staff working document (SWD) 
is based. Given regional similarities, overlapping implementation timeframes and comparable 
conditionality,  the  joint  evaluation  also  analysed  key  similarities,  differences  and  patterns 
across  the  two  interventions,  including  their  regional  impact  in  the  EU’s  Southern 
Neighbourhood.  

The  independent  evaluation  found  that  both  MFA-II  operations  were  successful  in 
contributing to  the macroeconomic stabilisation in the respective  countries, in  a persistently 
challenging  economic  context  with  high  external  financing  needs.  Both  operations  were 
relevant  in  terms  of  their  objectives,  financial  envelope  and  reform  conditions.  They 
supported  the  countries  in  addressing  BoP  difficulties  and  implementing  key  structural 
reforms to stabilise the economy and enhance the sustainability of their external position.  

MFA policy conditionality covered relevant reform areas in both countries. These areas were 
aligned  with  the  countries’  own  reform  agendas  and  both  countries  made  tangible  reform 
progress.  Conditions  in  the  respective  MFA-II  operations  showed  continuity  with  previous 
MFA  operations  and  built  on  lessons  learned.  This  was  the  case  in  Tunisia,  with  the 
parliamentary adoption of key laws (on external auditing and the social safety net) and, on the 
technical front, with the creation of a scoring model to target vulnerable households. In Jordan 
also,  continuity  with  previous  policy  conditionality  was  observed,  in  particular  for  public 
financial management and social policy. All policy conditions were fulfilled in Jordan, while 
for Tunisia a waiver in relation to one condition was granted and duly justified. In both cases, 
there  were  moderate-to-substantial  delays  in  implementation  of  some  reforms,  with  the 
external  evaluation  concluding  that  higher  capacity  from  the  relevant  domestic  institutions 
would have facilitated better progress, in a context of instability in both countries.  

The  MFA-II  operations  in  Jordan  and  Tunisia  were  effective  in  helping  improve  the 
respective  BoP  situations,  as  well  as  in  supporting  fiscal  consolidation  in  both  countries 
through highly concessional financial terms and the implementation of key policy conditions. 
The  MFAs  covered  a  substantial  part  of  the  respective  estimated  residual  financing  gaps, 
while  increasing  confidence  in  the  respective  economies  and  reducing  the  pressure  on  the 
BoP. 

Both MFA-II operations were designed and implemented efficiently and were consistent with 
the  broad  policy  framework  guiding  EU  relations  with  the  countries,  as  well  as  with  the 
previous  MFA  operations,  other  donors  and  EU  programmes.  MFA  not  only  contributed  to 
effective  ‘burden  sharing’  with  the  IMF  and  other  donors  in  financial  terms,  but  also 
reinforced  reforms  promoted  by  the  government  and  the  international  partners.  At  the  same 
time, the study shows that the roles with the IMF could have been better divided, with more 

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efficient use of cross-conditions and with the EU’s efforts better targeted towards areas where 
it had specific expertise and experience. 

The  EU’s  added  value  primarily  concerned  the  financial  benefits  of  the  support  to  the 
Jordanian and Tunisian economies, with the long-term and highly concessional nature of the 
MFA loans allowing for fiscal savings and a more gradual adjustment of the primary public 
deficit.  The  financial  contributions  covered  part  of  the  financing  gaps  and  provided  added 
value in the sense that individual EU Member States alone would likely not have provided aid 
of equivalent size. Also, the respective MFA-II operations supported the implementation of a 
number of key reforms and were instrumental in achieving some of them, contributing to the 
sustained mobilisation of local authorities around these issues. Symbolically, the MFA-II sent 
a strong signal of EU support to Jordan and Tunisia and had some  confidence-boosting  and 
signalling effects which, coupled with IMF support, prevented a further drop in confidence in 
the respective economies.  

The counterfactual analysis on the MFA’s social impact suggested that, in the absence of the 
respective MFA-II operations, the social situation would have been negatively affected. This 
negative  effect  would  first  have  been  transmitted  through  direct  channels  in  both  countries 
(slower or more superficial progress with key reforms such as social safety net reforms and 
labour market policy) but also via indirect channels, notably in Tunisia (higher costs of living 
and  lost  income  stemming  from  GDP  impacts).  The  social  impacts  would  have  been  even 
more severe in the hypothetical scenario of the absence of both the MFA and IMF funding.  

The evaluation found that the MFA-II operations contributed positively to the sustainability of 
Jordan  and  Tunisia’s  public  debt.  They  enabled  fiscal  savings  and  helped  the  countries’ 
adjustment path by creating fiscal space for other reforms and for sustaining social spending. 
Yet,  given  the  relatively  limited  size  of  the  operations  in  both  countries,  debt  levels  would 
have  remained  largely  similar  to  what  was  estimated  in  the  case  of  no  MFA  funding. 
However, the combined counterfactual effect of no MFA and no IMF financing would have 
been very negative in the corresponding hypothetical scenario. At regional level, the potential 
impact of the operations was deemed limited, given the relatively small size of the supported 
economies and low intraregional integration, with possible positive impacts mostly associated 
with confidence-boosting effects and other less measurable channels. 

In  conclusion,  the  MFA-II  operations  in  Jordan  and  Tunisia  were  relevant  through  their 
support  to  the  countries’  economic  recovery  and  macroeconomic  stability  following  severe 
external  shocks,  providing  fiscal  savings  and  financial  benefits,  boosting  confidence  and 
incentivising  important  reforms.  The  size,  form  and  timing  of  the  operations  were  relevant 
and  appropriate  to  the  countries’  financing  needs,  providing  EU  added  value.  The  MFA 
conditionality  packages  were  relevant,  focused  on  significant  areas  and  supported  positive 
change in some key reform areas, despite mixed progress in specific reforms. Both operations 
were  consistent  with  the  overall  EU  policy  framework,  aligned  with  the  authorities’  reform 
agenda and other donors’ programmes. A detailed and comprehensive assessment of the MFA 
interventions  is  set  out  in  the  accompanying  Commission  staff  working  document,  which 
informs this executive summary.  

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