REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of macro-financial assistance to third countries in 2023
Date: 2024-06-17
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: European neighbourhood policy, economic stabilisation, macro-financial assistance, macroeconomics, multiannual financial framework, structural adjustment, third country

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 17.6.2024  COM(2024) 240 final/2  ADDENDUM This document corrects document COM(2024) 240 final of 10.6.2024. Concerns all language versions. Insertion of the reference to the Staff Working Document SWD(2024) 150 final linked to this Report.  The text shall read as follows: REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of macro-financial assistance to third countries in 2023 {SWD(2024) 150 final}  
 
 
CONTENTS 

1. 

INTRODUCTION ..................................................................................................... 2 

2.  MACROECONOMIC DEVELOPMENTS IN PARTNER COUNTRIES ......... 3 

2.1 

2.2 

Eastern Neighbourhood ................................................................................................... 4 

Southern Neighbourhood ................................................................................................ 5 

2.3  Western Balkans .............................................................................................................. 6 

3.  MACRO-FINANCIAL ASSISTANCE OPERATIONS IN 2023 ......................... 7 

3.1 

Eastern Partnership .......................................................................................................... 8 

•  Moldova ........................................................................................................................... 8 

•  Ukraine: MFA+ ............................................................................................................... 9 

3.2 

Southern Neighbourhood .............................................................................................. 10 

• 

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

3.3  Western Balkans ............................................................................................................ 11 

•  North Macedonia ........................................................................................................... 11 

4.  ENSURING THE PROPER USE OF MFA FUNDS: OPERATIONAL 
ASSESSMENTS, EX POST EVALUATIONS ............................................................ 12 

4.1 

Operational assessments ................................................................................................ 12 

4.2  

Evaluations .................................................................................................................... 12 

5.  GENERAL DEVELOPMENTS RELATED TO THE MFA INSTRUMENT .. 13 

5.1 

Functioning of the MFA instrument .............................................................................. 13 

5.2   MFA in the 2021-2027 multiannual financial framework ............................................ 14 

6.  LOOKING AHEAD - MFA OPERATIONS AND BUDGETARY SITUATION 
IN 2024 ............................................................................................................................. 16 

1 

 
 
 
 
 
 
 
 
 
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT 
AND THE COUNCIL 

on the implementation of macro-financial assistance to third countries in 2023 (1) 

1.  INTRODUCTION 

Macro-financial assistance, or MFA, is an EU financial instrument (2) extended to partner 
countries  experiencing  a  balance-of-payments  crisis.  Since  its  inception  in  1990,  MFA 
has  helped  to  improve  macroeconomic  and  financial  stability,  while  encouraging 
structural reforms, in countries neighbouring or geographically close to the EU. It usually 
complements  and is  conditional on a non-precautionary credit arrangement  agreed with 
the  International  Monetary  Fund  (IMF)(3).  Relieving  the  partner  country  of  some 
pressure to address the underlying problems causing the stress in the balance of payments 
allows it to increase its fiscal space, improve its debt sustainability and focus on driving 
needed reforms. By smoothening the macroeconomic adjustment path,  MFA  operations 
can have positive social impacts, giving the country more time and scope to address the 
root causes of its crisis. 

MFA  most  often  takes  the  form  of  loans,  whose  funding  the  Commission  borrows  on 
capital markets and lends on to the beneficiary country. In exceptional cases, it takes the 
form of grants financed by the EU budget. Sometimes, it can be a combination of loans 
and grants. 

MFA  is  released  in  instalments  and  only  if  all  the  specific  structural  reform  criteria  - 
agreed  with  the  country  -  are  fulfilled.  Moreover,  there  is  a  political  precondition  for 
granting  MFA,  relating  to  democratic  mechanisms,  including  having  a  multi‐party 
parliamentary system and observing the rule of law, and the country’s respect of human 
rights. In this way, MFA complements regular EU cooperation assistance and contributes 
to  the  wider  goal  of  preserving  stability  and  promoting  prosperity  and  EU  core  values 
beyond  its  borders  (4).  This  is  supported  by  the  findings  of  several  independent 
evaluations of completed MFA operations (5) as well as the recent meta-evaluation of the 
last decade of operations (6). 

1 This report is based on information available up to April 2024. 

2 The legal basis for macro-financial assistance to third countries other than developing countries is Article 212 of the 
Treaty on the Functioning of the European Union (TFEU). Article 213 TFEU may be used as a legal basis when the 
third country requires urgent financial assistance. 

3 An exception from this precondition was made in the set-up of the exceptional support provided to Ukraine following 
Russia’s full-scale invasion in February 2022. 
4 MFA also complements other EU external actions or instruments for the Neighbourhood and the Western Balkans, 
including budget support for which a total of EUR 980 million in grants was provided to the regions in 2023. The latest 
budget support report is available at: Budget support - Publications Office of the EU (europa.eu). 

5  All  evaluations  are  available  on  the  Commission’s  website:  https://ec.europa.eu/info/evaluation-reports-economic-
and-financial-affairs-policies-and-spending-activities_en. 

6  COM(2023)  0016,  final,  Commission  staff  working  document  Evaluation  of  Macro-financial  assistance  to  third 
countries (Meta-evaluation of operations for 2010-2020). 

2 

 
 
 
2023 was a remarkable year for the instrument due to the record level of funds mobilised 
as a result of the MFA+ operation to Ukraine in response to Russia’s  continued war of 
aggression.  With  this  extraordinary  effort,  the  EU  has  also  demonstrated  that  its 
expressions  of  solidarity  are  reliably  translated  into  deeds  and  has  established  itself  as 
Ukraine’s largest financial donor while also continuing to support other partners affected 
by  the  economic  fallout  of  the  war  in  Ukraine.  In  addition  to  the  unprecedented 
quantitative dimension and the novel guarantee by the so called “headroom” (see Box 1), 
the support has also proven the agility and adaptability of MFA in response to challenges 
in exceptional crisis situations while keeping the instrument’s core stabilising functions. 
In  particular,  the  reforms  brought  forward  by  the  MFA+  highlight  the  corresponding 
value added of MFA even in the most difficult war circumstances. 

The  2023  report  is  prepared  in  accordance  with  the  Commission’s  information 
obligations  as  laid  down  in  the  decisions  by  the  European  Parliament  and  the  Council 
concerning  MFA  operations  (7).  It  is  accompanied  by  a  Commission  staff  working 
document, which provides a more detailed analysis of the implementation of individual 
MFA operations. 

2.  MACROECONOMIC DEVELOPMENTS IN PARTNER COUNTRIES 
In 2023, the EU Neighbourhood and enlargement countries continued to recover slowly 
from the economic impacts associated with the aftermath of the pandemic, Russia’s full-
scale invasion of Ukraine, and the ongoing challenges posed by the cost-of-living crisis.  

Eastern  Neighbourhood  countries  witnessed  mixed  economic  trajectories  in  2023. 
Inflation  moderated  throughout  the  year  thanks  to  tighter  monetary  conditions  and  a 
decrease in commodity prices. However, persistent instability linked to Russia’s war of 
aggression  against  Ukraine  weighed  on  consumer  and  investor  sentiment,  with  both 
Azerbaijan  and  Moldova  experiencing  sluggish  economic  growth.  On  the  flipside, 
Armenia  and  Georgia  registered  stronger  economic  activity,  fuelled  by  an  influx  of 
Russian migrants and a corresponding increase in monetary transfers. Ukraine rebounded 
more strongly than anticipated (from the slump of almost 30% of GDP in 2022), showing 
remarkable resilience among households and firms in adapting to the wartime conditions.  

As  regards  the  Southern  Neighbourhood,  the  escalations  in  the  Middle  East  have 
increased the geopolitical  instability and tensions  in  the region since the last quarter of 
2023.  This  has  predominantly  impacted  the  economies  of  Israel  and  Palestine,  with 
neighbouring  countries  affected  by  the  repercussions  of  the  war,  particularly  on  their 
tourism sectors. However, despite these challenges, the region’s economy is expected to 
have continued  recovering throughout 2023 along with a general slowdown in inflation 
across most countries. 

In  the  Western  Balkans,  economic  growth  accelerated  compared  to  2022,  propelled  by 
robust  domestic  demand.  This  reflects  in  part  how  the  region  benefited  from  lower 
commodity prices, leading to  a slowdown of inflation (and a  corresponding  increase in 
disposable income). This, in turn, enabled countries with monetary authority to ease the 
pace of monetary tightening. 

7 Decision (EU) 2023/1165) Amending Decision (EU) 2022/563 ; Decision (EU) 2023/1461; Decision (EU) 2022/313; 
Decision  (EU)  2022/1201;  Decision  (EU)  2022/1628;  Decision  (EU)  2022/2463;  Decision  (EU)  2022/563;  Decision 
(EU) 2020/701; Decision (EU) 2020/33. 

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This  section  examines  in  more  detail  the  regional  challenges  faced  by  the  EU 
Neighbourhood countries and the Western Balkans. 

2.1 Eastern Partnership 

The  economies  of  the  Eastern  Partnership  countries  continued  their  varying  journey  in 
2023. Armenia and Georgia witnessed another strong economic expansion on the back of 
robust  investment  and  domestic  demand,  with  the  latter  supported  by  the  inflow  of 
migrants and monetary transfers related to Russia’s continued war of aggression against 
Ukraine.  After  an  unprecedented  collapse  in  economic  activity  in  the  wake  of  the 
invasion in 2022, Ukraine’s economy rebounded at a stronger pace than initially expected 
as  both  households  and  firms  showed  remarkable  resilience  and  adaptability  to  the  war 
environment.  Belarus’s  economy  bounced  back  amid  buoyant  industrial  production  and 
rising consumer demand. On the other side of the spectrum, economic activity was weak 
in Azerbaijan (GDP contraction) and Moldova (contraction in Q1-Q3 and slight recovery 
of  0.2%  year-on-year  in  Q4),  mostly  as  a  result  of  muted  domestic  demand  amid 
persistent  inflation.  Consumer  price  growth  moderated  sharply  over  the  course  of  2023 
amid  lower  global  commodity  prices  and  tight  monetary  policies.  In  Armenia  and 
Georgia,  the  sharp  local  currency  appreciation  also  played  a  role  in  reducing  imported 
inflation.  Against  this  disinflation,  central  banks  slowed  down  their  earlier  tightening 
cycle,  albeit  at  different  speeds,  with  the  central  bank  of  Azerbaijan  being  the  most 
cautious. 

With the exception of Ukraine and Moldova, public finances showed resilience as deficits 
narrowed, despite weaker demand and rising interest costs. Ukraine is estimated to have 
posted another huge budget  deficit  of 19.7% of GDP  induced by  the necessary  massive 
defence spending (accounting for about 27% of GDP). On the back of weak growth and 
household  support  measures,  Moldova’s  fiscal  deficit  widened  as  well.  Both  countries, 
however,  continued  to  benefit  from  significant  financial  support  from  international 
partners.  Benefiting  from  improved  fiscal  space,  most  Eastern  Partnership  countries 
increased their government expenditure, especially capital spending. On the external side, 
the current account positions weakened overall in the first 9 months of 2023 due to faster 
growth  of  imports  than  of  exports,  reflecting  strong  domestic  demand.  Furthermore,  in 
some  countries,  there  was  a  gradual  decline  of  money  transfers  from  Russia,  especially 
where  those  had  previously  increased  sharply  directly  after  the  latter’s  invasion  of 
Ukraine.  In  Azerbaijan,  the  current  account  surplus  decreased  considerably,  although 
from a very high level in 2022, due to a reversed terms of trade effect from lower oil and 
gas prices. 

The  regional  outlook  remains  clouded  by  the  extremely  complex  geopolitical  situation. 
This  includes  Russia’s  war  of  aggression  against  Ukraine  and  Azerbaijan’s  military 
operation in Nagorno-Karabakh in September 2023, which came as another reminder of 
the  region’s  vulnerability  to  the  various  lingering  territorial  conflicts.  This  instability 
could  continue  to  hold  back  consumer  and  investor  sentiment.  Beyond  the  geopolitical 
tensions,  the  external  environment  remains  unpropitious  as  tight  international  financing 
conditions  could  constrain  foreign  demand  and  limit  access  to  external  financing.  The 
effect of these headwinds is expected to be largely offset by increasing purchasing power 

4 

 
amid lower inflation and by the ongoing significant financial support from international 
partners  (notably  for  Ukraine  and  Moldova).  In  the  medium  term,  weak  governance,  a 
weak institutional framework, and an insufficient level playing field pose key challenges 
for  the  eastern  neighbours.  Other  bottlenecks  include  weaknesses  in  the  business 
environment, infrastructure gaps, an undiversified production base focused on low value-
added  sectors,  a  significant  state  footprint  in  the  economy,  and  human  capital 
weaknesses. 

2.2 Southern Neighbourhood 

Most  Southern  Neighbourhood  economies  expanded  in  2023,  albeit  more  slowly  than 
during  the  post-pandemic  rebound  in  2021-2022.  The  consequences  of  7  October  2023 
Hamas´ terrorist  attacks  across  Israel increased the risk of geopolitical  instability  in  the 
region,  affecting  primarily  the  Israeli  and  Palestinian  economies,  which  in  2023  are 
expected  to  have  grown  by  2%  and  contracted  by  6.7%,  respectively.  Neighbouring 
countries have experienced a negative impact mainly on their tourism and trade sectors. 

Economic growth in 2023 was initially driven by the continued recovery of the services 
sector,  notably  tourism,  hospitality,  and  transport,  as  the  number  of  visitor  arrivals 
broadly recovered to pre-pandemic levels. However, the tourism sector in Israel, Palestine 
and  to  a  lesser  extent  in  neighbouring  countries  saw  cancellations  in  Q4  following  the 
attacks  of  7 October  2023  and  the  ensuing  conflict.  While  unemployment  generally 
decreased,  it  remained  high  (exceeding  15%  in  Jordan,  Palestine,  and  Tunisia),  with 
women,  young  people  and  university  graduates  disproportionately  affected.  Consumer 
price inflation slowed in 2023 due to lower global energy prices (except for Lebanon and 
Egypt  due  to  multiple  crises  and  volatile,  distortive  parallel  exchange  rates).  Central 
banks  continued  monetary  tightening in  the first half of 2023, in  response to  the rise in 
inflation in 2022 and in early 2023, driven by high commodity prices. Nevertheless, while 
food  price  inflation  slowed  down,  it  remains  high.  This  is  a  particular  challenge  as 
southern  neighbours  rely  heavily  on  food  imports  and  have  a  significant  share  of  their 
population living in or near poverty. 

Fiscal balances improved in 2022-2023, despite increased fuel and food subsidies, while 
public  debt  levels  remained  above  pre-pandemic  levels.  The  rebound  in  tourism 
supported external balances along with the resilient inflow of remittances. However, for 
energy importers,  higher energy prices at  the beginning of 2023 led to  pressures  on the 
current  account, which later eased with  energy  prices moderating throughout  2023. The 
region  also  continued  to  benefit  from  external  support  from  international  institutional 
lenders. 

The outlook is for a continued expansion for most Southern Neighbourhood countries in 
2024,  as  inflation  pressures  have  eased,  and  monetary  tightening  has  slowed.  The 
escalations in the Middle East pose a significant risk in the region, as it not only directly 
impacts  the  Israeli  and  Palestinian*  economies,  but  also  affects  the  tourism  sectors  of 
neighbouring  countries.  In  addition,  it  contributed  to  export  and  fiscal  revenue  losses 
related to the logistical challenges following the attacks on the Red Sea (Egypt, Jordan). 
Other risks to the outlook include a geographic spread of the conflict in the region, which 

5 

 
could jeopardise domestic and regional political stability, and lead to elevated commodity 
prices.  In  the  medium  term,  reforms  remain  key  to  modernise  the  economies,  to 
strengthen private sector development and competitiveness, and to address public sector 
and  governance  inefficiencies  to  underpin  a  more  sustainable  and  resilient  economic 
growth model. 

2.3 Western Balkans 

In  2023,  economic  growth  in  the  Western  Balkans  was  driven  by  domestic  demand, 
especially  consumer  spending,  with  the  region’s  GDP  growing  by  3.3%  year-on-year, 
compared  to  2.1%  in  2022.  Average  annual  consumer  price  inflation  slowed  further  to 
8.1%  in  the  third  quarter  of  2023  amid  lower  commodity  prices  and  continued  to  fall 
beyond the third quarter in  most economies.  In  countries  with  monetary autonomy, the 
pace of tightening slowed. 

Trade dynamics  were generally dragged down by weak and, in  most cases, contracting 
goods  exports,  which  were  however  offset  by  a  robust  increase  in  services  exports, 
especially  in  tourism-dependent  countries.  Imports  also  shrank  in  most  of  the  region’s 
economies.  The region’s  four-quarter moving average current  account  deficit continued 
its recovery in the first three quarters of 2023 and fell to 3.1% of GDP in September, less 
than half its rate a year earlier and the lowest level since 2021. This improvement, which 
was  broad-based  across  countries,  was  mainly  due  to  the  continued  growth  in  services 
exports,  higher  remittance  inflows,  and  declining  merchandise  trade  deficits,  helped  by 
moderating import prices. 

The unemployment rate fell in most economies and is at historically low levels, although 
high compared with the EU. Average employment growth accelerated to 1.4% (8) year-
on-year  in  the  Western  Balkans  in  the  third  quarter  of  2023,  while  labour  force 
participation increased in some countries. 

Continued  economic  expansion  supported  the  growth  of  budget  revenues,  and  fiscal 
balances in the first 11 months of 2023 improved or remained at the same level as a year 
earlier  in  most  economies  in  the  region.  The  public  debt-to-GDP  ratio  decreased  in  all 
economies  in  the  third  quarter  of  2023  compared  to  end-2022,  partly  due  to  the  robust 
rise in nominal GDP. 

The Western Balkan’s economy is poised for a moderate economic rebound, with growth 
expected to increase from around 2.5% in 2023, on average. Factors like weak external 
demand  and  high  inflation  are  anticipated  to  fade,  allowing  countries  to  return  to  their 
higher  growth  potential.  Tourism  exports  and  stable  worker  remittances  are  set  to 
contribute  to  growth.  There  are  significant  downside  risks  to  the  region’s  economic 
outlook due to the continuation of Russia’s full-scale war of aggression against Ukraine, 
possibly impacting global commodity prices, as well as leading to potential supply chain 
disruptions, and renewed tightening of financing conditions. In the medium term, reforms 
are needed to boost productivity, modernise public infrastructure, reduce the size of the 

8 This figure does not include Kosovo for which Q3 data were not available by the cut-off date for this report. 

6 

 
 
informal economy, and accelerate the green and digital transitions. This is to underpin a 
more sustainable growth path. 

3.  MACRO-FINANCIAL ASSISTANCE OPERATIONS IN 2023 

In 2023, amid the ongoing impacts of Russia’s war of aggression on Ukraine, a new large 
and  exceptional  MFA  operation,  the  MFA+,  was  implemented  and  successfully 
completed  for  Ukraine.  At  the  same  time,  Moldova  received  supplementary  support 
under  its  ongoing  MFA  operation.  Jordan’s  MFA  was  successfully  completed  in  2023, 
with the disbursement of the final instalment in May. 

In  light  of  the  prolonged  war  and  the  increased  funding  requirements  of  Ukraine,  the 
European  Council  issued  an  instruction  in  October  2022  to  devise  a  comprehensive 
solution  for  supporting  the  country  in  a  more  predictable  and  continuous  manner.  The 
Commission  proposed  a  financial  aid  package  totalling  EUR 18  billion,  structured  as  a 
highly  concessional  loan  under  a  new  MFA+  instrument,  which  was  swiftly  approved, 
using  all  procedural  flexibilities,  by  the  European  Parliament  and  the  Council  in 
December  2022.  The  new  MFA+  was  designed  to  provide  timely  financing  to  help 
address  Ukraine’s  immediate  funding  needs,  critical  infrastructure  rehabilitation,  and 
initial  post-war  reconstruction.  This  aligned  with  the  country’s  path  toward  European 
integration  while taking into account  the country’s extraordinarily challenging  situation 
by incorporating additional flexibility in  a number of dimensions  compared to standard 
MFA  operations.  The  Memorandum  of  Understanding  (MoU),  adopted  in  mid-January 
2023, outlined 20 policy conditions that had been identified as both relevant and feasible 
in  the  exceptional  war  context.  Reflecting  overall  good  progress  on  the  corresponding 
policy reforms, the full amount of the MFA+ was disbursed in six instalments between 
January and December 2023. 

Russia’s  continued  war  in  Ukraine  also  exacerbated  Moldova’s  already  challenging 
economic conditions. In response, in January 2023, the Commission adopted a proposal 
to  increase  the  ongoing  MFA  to  Moldova  by  EUR 145  million  comprised  of  EUR  100 
million  loans  and  a  EUR 45  million  grants,  increasing  the  total  MFA  operation  to 
EUR 295 million. The Decision was adopted by the European Parliament and Council in 
June 2023, and the EU-Moldova MoU entered into force in September 2023. Following 
the fulfilment of the policy conditions agreed in Moldova’s MoU that had been amended 
to this end, the first of two additional instalments was disbursed in October 2023. 

In  May  2023,  following  an  overall  positive  assessment  of  the  implementation  of  the 
associated  policy  conditionality,  Jordan  received  the  last  instalment  of  the  third  MFA 
operation that had entered into force in January 2020, and which had subsequently been 
increased  with  a  COVID-19  top-up  in  April  2020  (to  EUR 700  million,  overall)  to 
support the country during the COVID-19 pandemic. 

7 

 
The implementation status of MFA operations in 2023 (by region) 

3.1 Eastern Partnership 

•  Moldova 

Moldova was hit hard by an energy crisis in 2021. Following a request by the country on 
19 November 2021, the Commission adopted a proposal for macro-financial assistance of 
up  to  EUR 150  million,  of  which  up  to  EUR 120  million  in  medium-term  loans  and  a 
EUR 30 million grant component. The Decision of the European Parliament and Council 
was  adopted  on  6 April  2022.  Following  a  positive  opinion  delivered  by  the  Member 
State  Committee  on  Macro-Financial  Assistance  on  12 June  2022,  the  MoU,  the  loan 
facility agreement and the grant agreement relating to this MFA were signed on 22 June 
2022 and ratified by the Moldovan parliament on 14 July 2022.  Following the fulfilment 
of the corresponding policy conditions agreed in the MoU, the first instalment of EUR 50 
million  was  disbursed  on  1 August  2022  (of  which  EUR 15  million  in  grants).  The 
second instalment of EUR 50 million (of which EUR 10 million in grants) was disbursed 
on 5 April (for grants) and on 3 May (for loans). 

As  a  response  to  the  unfolding  and  intensifying  direct  and  indirect  impacts  of  Russia’s 
war  of  aggression  on  Ukraine  on  Moldova’s  economy,  on  24 January  2023,  the 
Commission  adopted  a  proposal  to  increase  the  ongoing  MFA  by  EUR 145  million,  of 
which up to EUR 100 million in loans and EUR 45 million in grants (additional MFA). 
The Decision was adopted by the European Parliament and Council on 14 June 2023 and 
entered into force on 5 September 2023. It increases the overall support provided through 
this  MFA  to  EUR 295  million,  of  which  EUR 75  million  in  grants.  The  additional 
financial  assistance  under  the  MFA  comes  as  part  of  a  larger  EU  support  package  to 
Moldova  announced  by  the  Commission  President  in  November  2022,  which  also 
contained EUR 105 million of budget support. The additional MFA is to be disbursed in 
two additional instalments of equal size (EUR 50 million in loans and EUR 22.5 million 
in  grants)  falling  between  the  second  disbursement  and  the  final  instalment  of  the 
existing MFA operation. Following the fulfilment of the policy conditions agreed in the 
amended MoU, the first additional instalment of EUR 72.5 million was disbursed on 25 
October  (EUR 50  million  in  loans)  and  27 October  (EUR 22.5  million  grants), 
respectively. 

The  regular  MFA  operation  and  the  top-up  remain  subject  to  a  positive  track  record 
under the IMF’s Extended Credit Facility/Extended Fund Facility for Moldova, adopted 
in  December  2021,  and  increased  in  May  2022.  After  the  increase,  the  Fund’s 
programme  amounts  to  USD 815  million.  In  December  2023,  the  IMF  successfully 
concluded  its  fourth  review,  assessing  the  overall  progress  on  the  programme  as 
positive. In December 2023, the IMF Executive Board also approved an arrangement for 
Moldova  under  the  Resilience  and  Sustainability  Facility,  for  an  amount  equivalent  to 
USD 173  million,  to  support  Moldova’s  efforts  to  strengthen  resilience  against  climate 
shocks,  support  energy  sector  reforms,  enhance  domestic  financial  sector  preparedness, 
and mobilise sustainable finance. Following the abrupt dismissal of the Governor of the 
National Bank of Moldova in December 2023, technical discussions with the Moldovan 

8 

 
 
 
authorities  were  held  on  the  importance  of  good  economic  governance,  strengthening 
central bank independence and following international good practice and due process in 
the context of a potential dismissal of the central bank Governor. 

•  Ukraine: MFA+ 

In  response to  the  request  by the European Council of 20-21 October 2022 to present  a 
more structural solution for supporting Ukraine, the Commission, on 9 November 2022, 
adopted  a  proposal  to  provide  EUR 18  billion  of  financial  aid  in  the  form  of  highly 
concessional  loans  to  Ukraine  for  2023  through  the  new MFA+ instrument.  This  was 
approved  by  the  European  Parliament  and  the  Council  on  14 December  2022 
accompanied  by  a  targeted  revision  of  the  MFF  Regulation  adopted  on  15  December 
2022  to  guarantee  such  loans  over  and  above  the  MFF  ceilings  (9).  In  light  of  the 
exceptional  situation  of  providing  unprecedented  amounts  of  loans  to  a  war-torn  third 
country,  the  MFA+  instrument  featured  unique  characteristics  of  greater  flexibility  (10). 
While  not  in  itself  creating  a  precedent  for  future  MFA  operations  in  a  more  standard 
setting, the increased flexibilities proved very useful for the country context of Ukraine. 
Notably,  the  design  of  conditionality  based  on  progress  towards  implementation  of  the 
policy  conditions,  with  only  the  final  disbursement  requiring  their  completion,  and  an 
only  indicative  timeline  for  reform  implementation,  enabled  a  sequencing  of  policy 
actions in a most uncertain environment, and the (ultimately not used) possibility to adapt 
the  MoU  following  a  mid-term  review  that  adequately  reflected  the  exceptional 
uncertainty. Fiscal pressures stemming from the loans under the MFA+ were significantly 
lessened  thanks  to  highly  concessional  conditions  such  as  long  maturities  of  up  to  35 
years, a grace period of 10 years, and a subsidy on the interest rate at least until the end of 
2027. 

The MoU, which entered into force on 17 January 2023, featured 20 policy conditions in 
the  areas  of  macro-financial  stability, structural  reforms  and  good  governance,  rule  of 
law,  and  energy;  the  EU  and  the  Ukrainian  authorities  had  identified  these  as  both 
relevant  and  feasible  in  the  extraordinary  war  situation.  The  disbursement  of  the  first 
instalment  of  EUR 3  billion  took  place  on  17 January  2023  and  was  conditional  on  the 
continued fulfilment of the political precondition and the satisfactory implementation of 
the enhanced reporting requirements for the MFA+ set out in the MoU. The disbursement 
of  the  following  instalments  was  additionally  linked  to  progress  in  implementing  the 
structural  policy  conditionality  agreed  in  the  MoU.  The  disbursement  of  the  second 
instalment  of  EUR 1.5  billion  took  place  on  21 March.  The  subsequent  disbursements 
followed  corresponding  favourable  assessments  by  the  Commission  of  Ukraine’s 
satisfactory progress toward implementing the agreed conditionality. The third instalment 
was  provided  in  three  tranches  of  EUR 1.5  billion  that  were  disbursed  on  25 April, 
23 May and 22 June, respectively. In the same vein, the fourth instalment was disbursed 
in  monthly  tranches  of  EUR 1.5  billion  each  on  25 July,  22 August  and  22 September. 

9  Regulation  (EU)  2022/2463  of  the  European  Parliament  and  of  the  Council  of  14  December  2022  establishing  an 
instrument for providing support to Ukraine for 2023 (macro-financial assistance +), OJ L 322, 16.12.2022, p. 1. 
10  An  overview  of  the  novel  features  that  distinguish  the  MFA+  instrument  from  standard  MFA  operations  can  be 
found in SWD (2023) 24 final, page 16-17. 

9 

 
 
Lastly,  the  fifth  and  penultimate  instalment  provided  for  two  monthly  tranches  of 
EUR 1.5 billion each with disbursements taking place on 23 October and 22 November. 

As  required  by  the  underlying  legislation,  the  final  disbursement  of  the  full  amount  of 
EUR 18 billion  was conditional on the  completion of all conditions  agreed in  the MoU 
(rather  than  on  progress  with  their  implementation,  as  had  been  the  case  for  preceding 
instalments) notwithstanding the exceedingly difficult wartime environment. Indeed, the 
Commission  concluded  that  Ukraine  had  fulfilled  11  conditions  and  broadly  fulfilled  9 
conditions  (11).  Consequently,  the  disbursement  of  the  remaining  EUR 1.5  billion 
associated  with  the  final  instalment  took  place  on  21 December  2023.  With  this 
disbursement  of  the  total  amount  of  EUR 18  billion  in  highly  concessional  loans 
available under the MFA+ instrument, the EU has contributed crucially to the financing 
of Ukraine's substantial external funding gap in the current unprecedented circumstances. 
Indeed,  in  2023,  the  EU  was  the  country’s  international  partner  making  the  largest 
financing  contribution.  With  the  adoption  of  the  Regulation  establishing  the  Ukraine 
Facility  (12),  which  entered  into  force  on  1 March  2024,  the  EU  has  lived  up  to  its 
promise to continue to provide Ukraine with a stable and predictable source of funding; 
the  facility  is  set  to  provide  up  to  EUR 50  billion  through  to  2027.  This  more 
encompassing instrument thus follows up on the successful implementation of the MFA+ 
instrument. 

3.2 Southern Neighbourhood 

•  Jordan 

In September 2019, the Commission proposed a third MFA to Jordan of EUR 500 million 
in loans, which the co-legislators adopted in January 2020. Following this, in April 2020, 
the Jordanian authorities requested additional assistance in the context of the COVID-19 
pandemic. In May 2020, the EU agreed on a top-up MFA of EUR 200 million in loans as 
part  of  the  COVID-19  MFA  package  for  10  countries.  The  policy  conditionality  of  the 
combined  MFA  focuses  primarily  on  improving  public  finance  management,  fighting 
corruption,  and  promoting  reforms  in  the  utilities  sector,  in  social  and  labour  market 
policy, and on governance. 

The  first  instalment  (EUR 100  million,  plus  EUR 150  million  from  the COVID-19  top-
up)  was  disbursed  on  25 November  2020.  It  was  only  subject  to  the  general  political 
precondition, under the MFA and the IMF programme, of remaining on track. The second 
and third instalments were, in addition, subject to the specific policy conditionality agreed 
between  Jordan  and  the  EU  in  the  MoU.  The  second  instalment  (EUR 200  million  and 
top-up  of  EUR 50  million)  was  disbursed  on  20 July  2021,  successfully  concluding  the 

11 This assessment of overall good progress on the reform agenda is also consistent with the findings of the IMF in the 
context  of  the  second  review  under  the  Extended  Fund  Arrangement  of  11 December  2023,  in  which  the  IMF 
commended the Ukrainian authorities’ programme performance and noted a sustained strong commitment to reforms. 
See  IMF  Executive  Board  Concludes  the  2023  Article  IV  Consultation  and  the  Second  Review  under  the  Extended 
Fund Facility Arrangement for Ukraine. 
12  Regulation  (EU)  2024/792  of  the  European  Parliament  and  of  the  Council  of  29 February  2024  establishing  the 
Ukraine Facility, OJ L, 2024/792, 29.2.2024 

10 

 
 
COVID-19-related  part  of  the  assistance.  The  third  and  final  instalment  of  EUR 200 
million was disbursed on 3 May 2023, again following a positive assessment of the policy 
conditionality relating to revenue mobilisation and procurement policies, and longer-term 
challenges such as improving the functioning of the water and electricity sectors or labour 
market policy to improve the education of young people. 

The  MFA  support  was  provided  in  conjunction  with  resources  from  international 
financial institutions and bilateral donors, including the IMF. On 25 March 2020, the IMF 
approved  a  4-year  Extended  Fund  Facility  (EFF)  programme  with  Jordan,  initially  of 
USD 1.3 bn,  which  was  increased  twice  in  2021-2022  to  about  USD 1.49 bn  (334%  of 
Jordan’s quota). Total IMF disbursements to Jordan for the period 2020-2023 amounted 
to  about  USD 1.7 bn,  which  included  in  May  2020  around  USD 390  million  in 
emergency assistance under the Rapid Financing Instrument to help Jordan deal with the 
impact of the pandemic. In late 2023, when only a small amount was left in the 2020 EFF 
following significant front-loading of disbursements, the IMF proposed to terminate the 
programme early and replace it with a new EFF. 

In January 2024, the IMF Executive Board approved a new arrangement under the EFF 
for Jordan for USD 1.2 billion covering the period 2024-2027. In October 2023, in view 
of the increased regional uncertainty and challenging external environment, the Jordanian 
authorities sent a request for a follow-up MFA (see Section 5). 

3.3 Western Balkans 

•  North Macedonia 

On  6 February  2023,  the  Commission  adopted  a  proposal  to  provide  MFA  to  North 
Macedonia,  for  an  amount  of  EUR 100  million  in  loans  in  two  equal  instalments.  The 
proposal  was  adopted by the co-legislators in  July 2023 and the  MoU was  agreed with 
the authorities in August 2023. The MoU contains 20 policy conditions (of which 8 relate 
to  the  first  disbursement)  in  the  following  areas:  public  finance;  business  environment; 
education  and  labour  market;  energy;  and  judiciary,  good  governance  and  the  fight 
against  corruption.  The  Commission  has  assessed  that  all  conditions  in  relation  to  the 
first  instalment  have  been  met  and  the  release  of  the  corresponding  EUR 50  million 
disbursement was decided on the 22nd of April. 

The  MFA  is  contingent  on  a  positive  track  record  regarding  the  ongoing  IMF 
programme.  On  22 November  2022,  following  the  authorities’  request  and  a  staff-level 
agreement, the IMF Board adopted a 24-month arrangement under the Precautionary and 
Liquidity Line of EUR 530 million. Half of this amount is  being disbursed and the rest 
precautionary.  In  January  2024,  the  IMF  completed  its  first  review  under  the 
Precautionary and Liquidity Line arrangement. 

11 

 
4.  ENSURING THE PROPER USE OF MFA FUNDS: OPERATIONAL 

ASSESSMENTS, EX POST EVALUATIONS 

4.1 Operational assessments 

In line with the requirements of the EU Financial Regulation, the Commission carries out 
operational  assessments  with  the  help  of  external  consultants  to  obtain  reasonable 
assurances  on  the  functioning  of  administrative  procedures  and  financial  circuits  in 
beneficiary countries. 

Operational  assessments  focus  on  public  financial  management  systems,  in  particular 
how  finance  ministries  and  central  banks  are  organised  and  what  procedures  they 
implement,  and  –  more  specifically  –  on  how  the  accounts  receiving  EU  funds  are 
managed.  Special  attention  is  also  paid  to  the  functioning,  independence  and  work 
programmes  of  external  audit  institutions,  and  how  effective  their  checks  are.  Public 
procurement procedures at central level are also examined. 

An  operational  assessment  of  Ukraine’s  administrative  and  financial  circuits  was 
conducted for the exceptional MFA support in 2022 (13) and the MFA+. It was the third 
such  assessment  undertaken  in  Ukraine,  although  this  time  conducted  remotely  due  to 
wartime  conditions.  Overall,  it  concluded  that  considerable  progress  had  been  made  in 
strengthening public financial management systems and other financial circuits since the 
last  exercise  of  2018.  It  also  highlighted  the  ongoing  commitment  by  Ukrainian 
authorities  to  continuous  improvement.  The  assessment  stressed  the  need  to  prioritise 
public financial management reforms in key priority areas, such as capacity building, and 
in  clarifying  roles  in  audit  and  internal  control  functions.  Further  momentum  in  these 
priority areas is recommended once the security situation allows for it and in view of the 
sizeable reconstruction efforts ahead. 

In 2023, a new operational assessment of North Macedonia was initiated in the context of 
the  new  MFA  operation.  The  external  consultants  concluded  that  the  financial  circuits 
and  procedures  of  the  country  are  deemed  satisfactory  for  the  purposes  of  MFA.  They 
asserted that North Macedonia’s public financial management system is generally sound 
and has made significant progress in recent years. 

4.2 Evaluations 

In  line  with  the  Financial  Regulation  and  the  corresponding  MFA  decisions,  the 
Commission conducts evaluations (14) after the completion of MFA operations to assess 
their  impact.  The  two  main  objectives  of  these  evaluations  are  firstly  to  analyse  the 
impact  of  MFA  on  the  beneficiary  country’s  economy,  and  in  particular  on  the 
sustainability of its external position, and secondly to assess the added value of the EU 
action. 

In  2023,  the  Commission  launched  the  joint  ex post  evaluation  of  the  operations  to  the 
Eastern  Partnership  countries  of  Moldova,  Georgia  and  Ukraine  (2017-2020).  The 

13 Decisions (EU) 2022/1201 and (EU) 2022/1628. 
14 All evaluations are available on the Commission’s website: https://ec.europa.eu/info/evaluation-reports-economic-
and-financial-affairs-policies-and-spending-activities_en. 

12 

 
 
accompanying  staff  working  document  will  be  published  in  2024.  Across  all  three 
countries, the study’s preliminary results concluded that operations had a positive impact 
on debt sustainability and the macroeconomic situation. This was particularly significant 
in  the  case  of  Ukraine,  given  the  larger  scale  of  the  operation  and  the  country’s  more 
challenging  macroeconomic  framework.  Despite  differing  designs  linked  to  distinct 
political contexts, the three operations were successful in fostering a positive change in a 
number of key reform areas. The operations were found to be consistent with the overall 
EU  policy  framework,  aligning  with  authorities’  reform  agendas  and  other  donors’ 
programmes. 

5.  GENERAL DEVELOPMENTS RELATED TO THE MFA INSTRUMENT 

5.1 Functioning of the MFA instrument 

The  2013  Joint  Declaration  of  the  European  Parliament  and  the  Council  on  MFA  (15) 
frames the assistance as being of a macroeconomic and financial nature and clearly states 
that its aim is ‘to restore a sustainable external finance situation for eligible countries and 
territories  facing  external  financing  difficulties.’  For  MFA  to  be  successful  as  an 
emergency instrument, it is therefore important to mobilise it effectively and in time. The 
decision-making involving the ordinary legislative procedure has often been identified as 
time-consuming and a major shortcoming for a crisis instrument that is meant to respond 
quickly to a balance-of-payments crisis (16). 

However, recent experiences with the COVID-19 MFA package and the different MFA 
operations  to  Ukraine  (emergency  MFA,  exceptional  MFA,  MFA+)  showed  that  the 
current set-up of MFA can enable a very swift adoption, if all institutions make full use 
of the available procedural flexibilities at their disposal. In these cases, the Commission 
worked  with  Parliament  and  the  Council  to  agree  on  the  use  of  existing  urgency 
procedures that made it possible for the corresponding assistance to be adopted by both 
co-legislators  within  1 month  of  the  Commission’s  respective  proposals.  Parliament 
invoked a specific  clause (Rule 163) in  their Rules of Procedure, which  permitted  it to 
adopt  the  proposal  directly  in  its  plenary,  skipping  the  International  Trade (INTA) 
Committee stage, which would have been involved as per the regular practice. 

Thus, the Rules of Procedure of both  the European Parliament and the Council provide 
for an accelerated procedure necessary for swift adoption in urgent situations. By having 
timely, constructive contacts, it proved possible to have a faster adoption process under 
the ordinary legislative procedure, with the full involvement of Parliament in those cases. 
Nevertheless, in view of the urgency of being in a position to provide support already in 
the  second  half  of  2024,  the  Commission  exceptionally  decided  in  March  2024  to 
propose  a  first  urgent,  short-term  MFA  to  Egypt  on  the  basis  of  Article 213  TFEU 
(applicable  for  cases  where  urgent  financial  assistance  is  required  and  with  only  the 
Council adopting the MFA operation). Recognising the second-best nature of this option, 
the bulk of the MFA support for Egypt was proposed under a second, more medium-term 

15 Joint Declaration by the European Parliament and the Council adopted together with the decision providing further 
macro-financial  assistance 
(Decision  No  778/2013/EU  of  12 August  2013).  Available  at:  
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013D0778&from=EN 

to  Georgia 

16 A meta-evaluation of the last decade of operations was held in 2023  - COM(2023) 0016, final; Commission Staff 
Working  document  Evaluation  of  Macro  financial  assistance  to  third  countries  (Meta-evaluation  of  operations  for 
2010-2020). 

13 

 
 
 
MFA  operation  that  will  follow  the  normal  procedures  under  Article 212  TFEU,  duly 
involving both co-legislators. 

The  upcoming  preparations  for  the  next  multiannual  financial  framework  (MFF)  will 
provide  an  opportunity  to  draw  lessons  from  recent  experiences  with  MFA.  This  could 
feed a reflection on the future of the MFA with the Parliament and the Council.  

5.2 MFA in the 2021-2027 multiannual financial framework 

The  EU’s  partner  countries  continue  to  be  vulnerable  due  to  structural  weaknesses  in 
their  economies.  The  region  also  remains  exposed  to  high  geopolitical  uncertainty  and 
continues  to  experience  economic  instability,  further  exacerbated  by  Russia’s  war  of 
aggression against Ukraine, and most recently by the conflict in escalations in the Middle 
East.  Given  this  situation,  the  need  for  the  EU  to  consider  providing  MFA  is  likely  to 
remain  high  in  the  years  to  come.  It  is  therefore  important  to  make  sure  that  sufficient 
budgetary resources remain available for the MFA instrument in the coming years. 

MFA  loans  are  guaranteed  by  the  External  Action  Guarantee  under  the  NDICI-Global 
Europe  Regulation,  at  a  provisioning  rate  of  9%  as  was  the  case  under  previous  MFFs 
(17). The total budget initially earmarked for the provisioning of MFA loans was fixed at 
around EUR 1 billion, which translates into a volume of loans of EUR 11 billion. Since 
the beginning of the current MFF in 2021, and in the context of the EU’s sizeable support 
to  Ukraine  via  MFA  in  2022,  around  two  thirds  of  the  earmarked  provisioning  had 
already been used by the end of 2023. It is in this context that following the extraordinary 
European  Council  of  1  February  2024  on  MFF  mid-term  review,  around  EUR  225 
million  of  provisioning  liabilities  related  to  the  exceptional  MFA  operation  of  EUR  5 
billion to Ukraine disbursed in 2022 was transferred to the Ukraine Facility. Combined 
with reinforcements of the budget for the provisioning of MFA loans, this will allow to 
fund the proposed MFA package to Egypt of up to EUR 5 billion (see section 6 below) 
should  it  be  adopted  by  the  co-legislator(s),  while  leaving  some  room  for  other  MFA 
operations until the end of 2027. 

The significantly elevated risks associated with the support to Ukraine since the outbreak 
of  the  war  warranted  special  treatment  from  a  budgetary  perspective.  Box  1  provides 
some detail on this with a focus on 2023. 

Box 1 – Budgetary treatment of support to Ukraine in 2023 

In  2022,  the  EU’s  financial  support  to  Ukraine  in  response  to  the  Russian  war  of 
aggression  evolved  progressively,  reflecting  the  country’s  evolving  funding  needs  in  a 
situation characterised by exceptional uncertainty. This resulted in the provision of three 
atypical  MFA  operations  in  2022,  with  the  introduction  of  several  novel  exceptional 
budgetary arrangements as compared to regular MFA operations. Drawing on the lessons 
of  this  piecemeal  manner  of  support,  the  MFA+  instrument  was  designed  to  provide 
funding for the full year of 2023 in a more regular and predictable manner. 

The  emergency  MFA  to  Ukraine  of  up  to  EUR 1.2  billion  in  loans  was  adopted  on 
28 February 2022  and  followed  the  regular  pattern  of  MFA  operations  (provisioned  at 
9%  of  the  nominal  value  of  the  loan,  in  accordance  with  the  NDICI-Global  Europe 

17 The Regulation (EU) 2021/947 - NDICI-Global Europe instrument entered into force in June 2021, after its formal 
adoption by Parliament and the Council. While the Regulation therefore plays an important role in the budgetary set-up 
of  MFA,  the  MFA  instrument  as  such  remains  separate  from  NDICI-Global  Europe,  and  specific  MFA  operations 
continue to be activated, as needed, by separate ad hoc decisions on the basis of the applicable Treaty legal basis. 

14 

 
 
Regulation).  Nevertheless,  the  elevated  risk  in  the  exceptional  war  context  for  the 
increasing  financing  volumes  required  an  adjustment  in  the  budgetary  risk  coverage  of 
the  exceptional  MFA  operations  of  up  to  EUR 6 bn  in  loans  (18)  that  followed.  A 
coverage  of  70%  of  their  value  was  considered  sufficient  (19).  Given  the  limited 
budgetary  availability  under  the  MFA,  this  translated  into  paid-in  provisions  under  the 
EU’s budget at the traditional 9% provisioning rate to the common provisioning fund and 
additional callable bilateral national guarantees by Member States for the remaining 61% 
of the amounts. Loans to Ukraine provided by the European Investment Bank under the 
External Lending Mandate were likewise subject to a 70% coverage to be fully paid into 
the common provisioning fund. The underlying legal base in Article 13 of Decision (EU) 
2022/1628 of the European Parliament and of the Council of 20 September 2022 obliges 
the  Commission  to  review  the  adequacy  of  the  70%  rate  every  6 months,  starting  on 
30 June  2023,  and  on  an  ad hoc  basis,  should  developments  so  require.  When  the 
Commission  deems  appropriate  an  increase  or  decrease  of  the  provisioning  rate,  the 
Commission  is  empowered  to  adopt  a  delegated  act  to  this  effect.  The  Commission 
finalised  its  first  review  in  July  2023  (20)  and  concluded  that  there  were  not  sufficient 
new lasting and meaningful elements that would justify an upward or downward change 
of the provisioning rate of 70%. In its second assessment, the Commission informed the 
European  Parliament  and  the  Council  in  December  2023  that,  while  noting  positive 
signals  in  the Ukrainian  economy, there was not  sufficiently  materialised  evidence  that 
these  developments  can  be  considered  to  have  a  lasting  and  meaningful  impact  on  the 
adequacy  of  this  provisioning  rate  to  warrant  a  departure  from  the  findings  of  the  first 
review. Against this background, the Commission suggests continuing to apply the 70% 
provisioning rate. It was decided that a more extensive assessment of the adequacy of the 
provisioning rate would be undertaken once more clarity was attained on developments 
and events with a significant bearing. These would notably include the evolution of the 
IMF programme and the materialisation of broad-based donor support for 2024 and later 
years, including the EU’s Ukraine Facility. 

As regards financial support for Ukraine in 2023, to limit the crowding out effect of the 
sizeable  support  to  Ukraine  via  the  EUR 18 bn  MFA+  operation  on  future  MFA 
operations  in  other  partner  countries,  it  was  decided  that  the  risks  associated  with  this 
lending  would  be  covered  in  a  different  manner  than  for  the  2022  MFA  packages  to 
Ukraine.  More  precisely,  the  corresponding  financial  liability  is  guaranteed  over  and 
above  the  MFF  ceilings  by  the  so-called  ‘headroom’.  The  headroom  is  the  difference 
between the own resources ceiling (i.e. the maximum amount of resources that Member 
States  can  be  asked  to  contribute  in  a  given  year)  and  the  funds  that  the  Commission 
actually  needs  to  cover  the  expenses  foreseen  by  the  budget.  Such  novel  solution  was 
agreed and implemented via a targeted amendment of the MFF Regulation in December 
2022(21).  As  a  result  of  the  MFA+  being  backed  by  a  guarantee  from  the  EU  budget 
headroom,  which  replaced  the  provisioning  that  the  NDICI-Global  Europe  Regulation 
usually stipulates, the release of funds under the MFA+ is  having no immediate impact 
on  the  overall  amount  of  budgetary  provisioning.  Drawing  on  this  experience,  the 

18 This refers to the exceptional MFA operation of EUR 1 billion as adopted in Decision (EU) 2022/1201 of 12 July 
2012 and the  exceptional MFA operation of EUR 5 billion as adopted in Decision (EU) 2022/1628 of 20 September 
2023. 
19  The  Regulation  also  includes  a  review  clause  of  the  provisioning  rate,  every  6  months,  given  the  exceptional 
uncertainty given the current war. 
20  Commission  staff  working  document  First  review  of  the  70%  provisioning  rate  for  Macro-financial  Assistance 
(MFA) and certain EIB loan disbursements covered by the External Lending Mandate (ELM) to Ukraine, SWD (2023) 
264 final of 18.7.2023. 
21 OJ L 325, 20.12.2022, p. 11–12. 

15 

 
 
Ukraine  Facility  adopted  by  the  EU’s  co-legislators  on  29 February  2024  envisages  a 
comparable  guarantee  from  the  headroom  of  the  loans  provided  under  this  instrument. 
This  was  made  possible  via  an  amendment  of  the  MFF  Regulation  2021-202722  in  the 
context  of  the  MFF  mid-term  revision  package,  proposed  by  the  Commission  in  June 
2022, as agreed and adopted in February 2024. As part of the overall political agreement,  
the Ukraine Facility will also cover the interest rate subsidy and the paid-in provisioning 
of 9% for the exceptional MFA operations that had not yet been committed at the end of 
2023 (around EUR 225 million). 

6.  LOOKING AHEAD - MFA OPERATIONS AND BUDGETARY SITUATION IN 2024 

In light of the crisis-driven nature of MFA, it is impossible to provide with any degree of 
certainty  an  outlook  of  future  operations  for  the  remainder  of  this  MFF.  This  section 
therefore  describes  operations  already  approved  in  2024  or  potential  operations, 
illustrating the non-programmable feature of MFA initiatives. 

On  8 October  2023,  the  Jordanian  authorities  requested  a  follow-up  MFA  operation  of 
EUR 700  million.  The  call  for  further  assistance  came  in  a  situation  of  increased 
uncertainty and regional instability, not least due to the escalations in the Middle East. In 
January  2024,  the  IMF  Executive  Board  approved  a  new  arrangement  under  the 
Extended  Fund  Facility  for  Jordan  for  USD 1.2  billion  for  2024-2027.  Jordan  has 
structural economic weaknesses that translate into chronic fiscal and external deficits and 
is  vulnerable  to  external  shocks  reflected  in  a  high  external  financing  gap,  which  is 
expected to persist in the current context of high downside risks to the tourism and trade 
sectors.  Taking  this  into  account,  the  Commission  adopted  a  new  MFA  proposal  on  8 
April 202423  for  an amount of up to  EUR 500 million in loans to  be disbursed in  three 
instalments between 2024 and 2027. 

On  12 March  2024,  Egypt  requested  macro-financial  assistance  of  EUR 5.5  billion 
following the signature of a new staff-level agreement with the IMF and an  increase of 
the ongoing IMF programme from USD 3 billion to USD 8 billion. Egypt has similarly 
been  affected  by  external  shocks,  notably  Russia’s  continued  war  of  aggression  with 
Ukraine  and  spillovers  from  the  escalations  in  the  Middle  East.  Resulting  portfolio 
outflows  and  falling  foreign  currency  receipts  from  lower  tourism  and  Suez  Canal 
revenues  contributed  to  a  significant  widening  of  the  external  financing  gap,  with 
continued  downside  risks  due  to  the  complex  geopolitical  situation.  Therefore,  the 
Commission has proposed an MFA package of up to EUR 5 billion, consisting of a short-
term MFA operation of up to EUR 1 billion based on Article 213 TFEU for disbursement 
still  in  2024  (adopted  by  the  Council  on  the  12th  of  April),  and  the  bulk  of  the  MFA 
package,  of  up  to  EUR 4 billion  for  2025-2027,  under  a  regular  operation  under 
Article 212  TFEU.  These  operations  will  help  to  address  urgent  short-term  needs  for 
macroeconomic stabilisation at a crucial moment for Egypt and the wider region and, in 
the  medium  to  long  term,  to  support  and  complement  the  IMF’s  reform  agenda  by 
fostering a more resilient and sustainable growth model. 

In  November  2022,  Tunisia  requested  additional  EU  macro-financial  assistance  of 
EUR 1.2  billion  to  support  its  financing  needs  in  the  context  of  the  worsened  global 
environment  and  high  international  commodity  prices.  This  followed  the  staff-level 

22 OJ L, 2024/765, 29.2.2024. 
23 COM(2024) 159 final. 

16 

 
 
 
 
 
agreement  reached  with  the  IMF  in  October  2022  for  a  new  Extended  Fund  Facility 
(4 years, USD 1.9 billion). However, the IMF Board has not yet adopted the programme 
as  prior  actions  have  not  yet  been  implemented  by  Tunisia,  notably  regarding  fuel 
subsidy  reform.  Thanks  to  buoyant  tourism  and  steady  remittances,  Tunisia’s  external 
financing  pressure  has  temporarily  eased.  Subject  to  a  careful  assessment  of  MFA 
preconditions  and  Tunisia’s  external  financing  needs,  the  Commission  stands  ready  to 
prepare  a  proposal  for  a  new  MFA  once  the  IMF  programme  is  in  place,  as  also 
confirmed  in  the  framework  of  the  comprehensive  partnership  between  the  EU  and 
Tunisia, agreed in July 2023. 

Similarly, in April 2022, Lebanon reached a staff-level agreement with the IMF (4 years, 
USD 3 billion) but has made only limited progress on its long list of prior actions. In the 
meanwhile,  GDP  has  continued  shrinking,  many  public  institutions  have  stopped 
functioning,  and  the  currency  has  lost  value  dramatically  leading  to  broad-based 
dollarisation  of  the  Lebanese  economy.  The  Commission  stands  ready  to  support  a 
comprehensive reform agenda with an MFA operation once the preconditions, including 
an on-track disbursing of the IMF programme, are fulfilled. 

The Commission stands ready to consider any other forthcoming requests for MFA and, 
if appropriate, will propose new and/or follow-up MFA operations to eligible partners. 

Table  1  provides  an  overview  of  commitments  and  payments  of  MFA  grants  and  the 
disbursement of MFA loans for 2021, 2022, 2023 and (provisionally) 2024. 

17 

 
 
 
 
Table 1: Commitments and payments for MFA grants and disbursements of MFA 
loans 2021-2024 (EUR)(24) 
2022 

2021 

2023 

2024 

Commitment 
appropriations for 
grants in the budget 

Operational 
assessments, ex post 
evaluations 
Other possible MFA 
operations 
Commitments, total 
Payment 
appropriations for 
grants in the budget 
Operational 
assessments, ex post 
evaluations 
MFA Moldova (EU 
2022/563) 
MFA Moldova (top-
up) (EU 2023/1165) 
Other possible MFA 
operations 
Payments, total 

Unused allocations 
for grants payments 
Disbursements of 
MFA loans 
MFA Jordan III 
(completed) 
MFA Moldova 
Emergency MFA 
Ukraine 
Exceptional MFA 
Ukraine 
MFA Moldova top-up 

MFA+ Ukraine 
MFA North 
Macedonia 
MFA Egypt (in 
preparation) 
Disbursements of 
MFA loans, total 
COVID-19 MFA 
operations 
MFA Moldova 
(completed) 
MFA Ukraine 
(completed) 
MFA Jordan 
(completed) 
MFA Tunisia 
(completed) 
MFA Albania 
(completed) 
MFA Bosnia and 
Herzegovina 
(partially disbursed) 
MFA Kosovo 
(completed) 

227 200 

30 114 460 

45 423 330 

57 367 177 

227 200 

114 460 

423,330 

750 000 

- 

30 000 000 

45,000,000 

56 617 177 

227 200 

30 114 460 

45,423,330 

57 367 177 

362 400 

20 868 187 

39,880,000 

57 367 177 

362 400 

- 

218,845 

750 000 

- 

- 

15 000 000 

10,000,000 

5 000 000 

22,500,000 

22 500 000 

- 

- 

29 117 177 

362 400 

15 000 000 

32,718,845 

57 367 177 

5 868 187 

7,161,155 

200 000 000 

- 

200 000 000 

- 

- 

- 

- 

- 

- 

- 

- 

35 000 000 

1 200 000 000 

6 000 000 000 

- 

- 

- 

- 

-  

- 

40 000 000 

45 000 000 

- 

- 

- 

- 

50 000 000 

50 000 000 

18 000 000 000 

- 

- 

100 000 000 

1 000 000 000 

200 000 000 

7 235 000 000 

18 290 000 000 

1 195 000 000 

50 000 000 

600 000 000 

50 000 000 

- 

- 

- 

300 000 000 

300 000 000 

180 000 000 

125 000 000 

50 000 000 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

24 The table does not take into account any proposal for new MFA operations after April 2024. 

18 

 
 
 
 
 
 
 
 
 
 
 
 
 
MFA Montenegro 
(completed) 
MFA North 
Macedonia 
(completed) 
Disbursements of 
COVID-19 MFA 
loans, total 
Disbursements of all 
MFA loans, total 

30 000 000 

80 000 000 

- 

- 

1 465 000 000 

300 000 000 

- 

- 

- 

- 

- 

- 

1 665 000 000 

7 535 000 000 

18 290 000 000 

1 195 000 000 

19