Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on providing macro-financial assistance to the Hashemite Kingdom of Jordan
Date: 2025-08-05
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU aid, EU loan, European neighbourhood policy, Jordan, economic reform, economic stabilisation, financial aid, macro-financial assistance

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   EUROPEAN COMMISSION  Brussels, 5.8.2025  COM(2025) 456 final 2025/0251 (COD)  Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on providing macro-financial assistance to the Hashemite Kingdom of Jordan {SWD(2025) 245 final}  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  outlook  for  Jordan’s  economy  is  subject  to  large  downside  risks,  in  the  face  of 
continued regional instability and a fragile global outlook. Jordan’s real GDP growth was 
estimated  at  2.5%  in  2024  and  is  projected  to  remain  broadly  unchanged  in  2025.  Inflation 
remained below 2% by end-2024, supported by lower import prices and continued monetary 
tightening by the Central Bank in line with the US dollar peg. However, potential spillovers of 
nearby wars have increased pressures on Jordan’s security situation and economic resilience, 
further  raising  downside  risks  to  its  outlook.  The  Middle  East  has  been  experiencing 
increasing instability, due to the war in Gaza, the fragile ceasefire in Lebanon, the fall of the 
Assad  regime  in  Syria.  The  escalation  of  tensions  between  Israel  and  Iran  in  mid-2025 
disrupted travel and increased uncertainty, with direct impacts on the tourism sector and likely 
adverse  effects  on  consumer  and  investor  confidence.  While  Jordan’s  economic  backdrop 
remains  broadly  stable,  heightened  volatility  and  geopolitical  unpredictability  pose  growing 
challenges for its future economic and social stability.  

Moreover,  the  country  faces  deep-rooted  structural  challenges.  The  unemployment  rate 
remains  persistently  high  at  21.4%,  with  even  higher  rates  among  the  youth,  while  female 
participation ranks among the lowest in the world. These labour market weaknesses continue 
to  constrain  Jordan’s  growth  potential  and  hinder  broader  economic  inclusion  and  social 
cohesion. Fiscal pressures intensified in  2024 amid spillover effects  from  regional conflicts 
and falling prices of key export commodities. Although the government introduced revenue-
raising measures and cut down on capital spending, the general budget deficit still widened to 
5.6%  of  GDP.  Public  debt  rose  slightly  to  90.4%  of  GDP  (excluding  Social  Security 
Corporation holdings)1. The current account deficit widened to close to 6% of GDP in 2024, 
driven  by  lower  exports  and  a  decline  in  tourism  revenues.  Jordan’s  structural  reliance  on 
energy  and  food  imports,  coupled  with  a  weak  export  base,  continues  to  weigh  on  external 
balances. Despite stable reserves of around USD 21 billion, vulnerabilities to external shocks 
persist, reinforcing the need for continued international financial support. 

In recent years, Jordan has pursued efforts to modernise its economic structure, notably 
through  the  launch  of  the  Economic  Modernisation  Vision  (EMV)  in  2022,  a  ten-year 
strategy  aimed  at  boosting  investment,  creating  jobs,  and  raising  living  standards. 
Building  on  earlier  reforms,  such  as  the  2018  London  Initiative,  the  EMV  focuses  on  eight 
key  sectors  and  includes  measures  to  enhance  public  sector  efficiency  and  citizen 
engagement, with reform efforts supported also through the consecutive IMF programmes and 
EU Macro-Financial Assistance (MFA). The first phase (2023–2025) is nearing completion, 
laying the groundwork for future implementation. These reform efforts have advanced despite 
a  series  of  overlapping  external  shocks,  including  the  protracted  Syrian  refugee  crisis,  the 
COVID-19  pandemic,  global  supply  disruptions  triggered  by  Russia’s  unprovoked  war  of 
aggression against Ukraine, and renewed regional tensions following the Israel-Gaza conflict 
and Red Sea trade disruptions. Although recent diplomatic steps toward Syria’s reintegration 
have been positive, they have yet to create the conditions conducive to the large-scale return 
of refugees from Jordan. 

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Debt including SSC’s holdings reached 114.7% of GDP. 

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Given  the  series  of  external  shocks  and  Jordan’s  strategic  role  in  promoting  regional 
stability, the country has received substantial international support over the past decade 
through  various  international  partners.  This  includes  four  consecutive  IMF  programmes 
since  2012,  four  MFA  operations  by  the  EU  since  2014,  significant  US  assistance,  and 
targeted support for hosting Syrian refugees.  

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– 

– 

The  first  three  MFA  programmes  (MFA  I:  EUR  180  million;  MFA  II:  EUR  200 
million;  MFA  III:  EUR  500  million  +  EUR  200  million  top-up  in  response  to 
COVID-19) provided a total of  EUR  1.08 billion in  loans between 2014  and 2023. 
Moreover,  following  a  request  by  the  Jordanian  authorities  on  8  October  2023,  the 
EU adopted a new MFA IV operation in 2025, amounting to EUR 500 million, with 
disbursements  planned  over  2025–2027.  The  MFA  IV  will  be  disbursed  upon 
fulfilment of agreed policy conditions in the Memorandum of Understanding (MoU), 
covering  measures  in  public  finance  management,  governance  and  anti-corruption, 
social and labour market policies, and in energy and the business environment.  

Jordan is also making good progress under the USD 1.2 billion IMF Extended Fund 
Facility  (2024-2027),  which  has  completed  three  positive  reviews  to  date  (the  last 
one  concluded  on  April  2025).  Besides,  on  25  June  2025,  the  IMF  also  approved 
approximately  USD  700  million  under  the  Resilience  and  Sustainability  Facility 
(RSF)  to  support  reforms  addressing  climate-related  and  pandemic  preparedness 
risks.  

Although  temporary  uncertainty  remains  around  the  disbursement  of  US  budget 
support  in  2025,  Jordan has  successfully  mobilized  critical  external  financing  from 
the World Bank, and GCC partners.  

long-standing  partnership,  anchored 

Beyond  short-term  financial  assistance,  the  European  Union  (EU)  and  Jordan  have  a 
close  and 
in  the  EU-Jordan  Association 
Agreement,  which  has  been  in  force  since  2002.  This  relationship  has  steadily  deepened 
over  the  years,  reflecting  strong  political  ties,  economic  cooperation,  and  shared  regional 
interests.  In January 2025, the EU and Jordan have agreed to strengthen their ties through a 
Strategic  and  Comprehensive  Partnership  (SCP)  aimed  at  promoting  shared  prosperity, 
stability,  and  security,  rooted  in  mutual  trust  and  long-standing  cooperation.  This  renewed 
partnership  focuses  on  six  key  pillars:  political  relations  and  regional  cooperation;  security 
and  defence;  economic  resilience,  trade  and  investment;  human  capital;  migration;  and 
protection of, and support to, refugees. Its implementation will be supported by a substantial 
financial  package  (including  through  MFA),  combining  short-  and  long-term  assistance  to 
advance  Jordan’s  macro-fiscal  and  structural  reform  agendas,  scale  up  investment  support, 
and provide targeted aid for the delivery of strategic priorities.  

Given  their  challenging  economic  situation  and  sizeable  and  unmet  financing  needs, 
Jordanian authorities requested an additional MFA V operation of EUR 500 million in 
January 2025. The request highlighted the deteriorating economic and political environment, 
noting  that  regional  turmoil  intensified  throughout  2024,  compounding an  already  uncertain 
and  unstable  global  context.  Moreover,  these  developments  have  weighed  on  foreign  direct 
investment,  exports,  domestic  consumption  and  domestic  revenues,  further  weakening 
Jordan’s  economic  and  fiscal  outlook  and  increasing  the  risk  of  larger  external  financing 
needs. The renewed violence in the region, including escalating tensions  between Israel and 
Iran  in  mid-June,  led  to  flight  suspensions  in  Jordan  and  is  likely  to  further  complicate  the 
country’s fragile economic recovery, dampen investor and tourist confidence, and contribute 
to an increasingly uncertain outlook. 

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Against  this  background,  the  European  Commission  proposes  to  provide  further 
financial support to Jordan, in the form of a new MFA, with the following features:  

– 

– 

– 

– 

After  an  in-depth  assessment  of  the  political  and  economic  situation  in  Jordan,  the 
Commission is submitting to the European Parliament and the Council a proposal to 
provide a new MFA of up to EUR 500 million to the benefit of Jordan. The proposed 
MFA  would  help  Jordan  cover  part  of  its  overall  residual  external  financing  gap, 
which  is  estimated  at  around  USD  3.9  billion  in  the  context  of  the  ongoing  IMF 
programme  over  the  period  of  2024-2027.  It  would  also  help  safeguarding  the 
ongoing reform progress.  

The  disbursement  would  take  place  in  three  instalments,  with  the  release  of 
instalments  strictly  linked  to  progress  with  the  implementation  of  both  the  IMF 
programme  and  a  number  of  additional  policy  measures  to  be  agreed  between  the 
Commission  and  the  authorities  and  listed  in  a  Memorandum  of  Understanding 
(MoU).  The  MoU  could,  in  principle,  include  policy  reforms  covering  economic 
governance  (such  as  public  finance  management  and  measures  to  strengthen 
domestic revenue mobilization), social and labour market policies, governance, anti-
corruption measures, utilities, and the business environment.  

The implementation  of the proposed operation is  expected to  go hand-in-hand with 
the  support  under  budget  support  operations  financed  by  the  Neighbourhood, 
Development  and  International  Cooperation  Instrument  -  Global  Europe  (‘NDICI-
GE’). 

As  further  elaborated  in  the  Commission  Staff  Working  Document  (SWD) 
accompanying  this  proposal,  the  Commission  considers,  based  also  on  the 
assessment of the political situation made by the  European External Action Service 
(EEAS),  that  the  political  and  economic  pre-conditions  for  the  proposed  MFA 
operation are satisfied. 

• 

Jordan’s economic context 

The Middle East faces growing instability from the war in Gaza, a fragile Lebanon ceasefire, 
the fall of Syria’s regime, and the recent Israel-Iran conflict. These tensions heighten pressure 
on  Jordan’s  security  and  economy,  with  rising  volatility  and  increasing  downside  risks, 
Economic growth decreased to 2.5% y-o-y (year on year) in 2024 (from 2.9% in 2023), 
due  to  the  increased  uncertainty  resulting  from  the  instability  in  the  region,  including 
the war in Israel-Gaza, and the moderation of global growth. Key sectors such as tourism 
and  trade  continued  to  perform  relatively  well,  despite  disruptions  linked  to  the  war,  and 
exceeding  initial  expectations,  supported  by  an  increase  in  regional  tourist  arrivals  that 
partially  offset  the  decline  in  visitors  from  the  West.  Despite  this,  tourism  revenues  fell  by 
2.3% in 2024, and the number of visitors declined by 3.9%. The sectors that contributed most 
to economic growth were manufacturing, agriculture, transport and communications, as well 
as  financial  services.  Jordan  started  2025  with  sustained  economic  growth,  broadly  in  line 
with the 2.5% recorded in 2024, driven by continued recovery in tourism, manufacturing and 
agriculture. However, the second quarter is expected to have been affected by the escalation 
of  tensions  between  Israel  and  Iran,  which  prompted  the  temporary  closure  of  Jordanian 
airspace. This disruption, led to suspension of flights and disrupted cargo traffic, and caused 
broader uncertainty, thus likely weighting on investor and consumer confidence. 

The unemployment rate remains high, despite a small decrease to 21.4% in 2024 (from 
22.0%  in  2023).  The  unemployment  rate  among  men  stood  at  18.3%  and  at  33.3%  among 

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women.  Youth  unemployment  remains  an  important  challenge  and  continues  into  young 
adulthood, as the unemployment rate for the age brackets of 15-19 years and 20-24 years was 
54.7%  and  46.4%,  respectively.  At  only  34.3%,  labour  force  participation  remains  an 
important  challenge,  where  men’s  and  women’s  labour  force  participation  are  both  low  or 
very low at 53.6% and 14.8%, respectively, which compares to 72% and 18% in the MENA 
region, respectively.  

Inflation pressures are contained, in line with recent monetary policy decisions. Inflation 
fell  to  1.6%  in  2024  on  average  y-o-y  (from  2.1%  in  2023)  though  it  picked  up  at  the 
beginning  of  2025  (2.2%  in  Jan-Feb  2025,  y-o-y)  in  line  with  the  central  bank’s  monetary 
easing. Most recently, main drivers of inflation were prices for rents, meat and poultry, and 
tobacco and cigarettes. Price decreases were recorded in particular for clothing, dairy products 
and oils, the latter two had contributed to driving inflation in previous years. Since September 
2024, the Central Bank of Jordan (CBJ) cut its interest rate in 3 steps by 100 basis points to 
6.5%, marking the end of the monetary tightening phase that began 2.5 years earlier. Between 
March 2022 and July 2023, the main rate was raised in 10 steps from 2.5% to 7.5%. The CBJ 
decisions were necessary given the JOD’s peg to the USD, to be in line with the US Federal 
Reserve’s  monetary  tightening/easing  and  avoid  pressures  on  capital  flows,  and  indeed 
contributed to the moderation of inflationary pressures.  

The banking system remains liquid and well capitalised. The capital adequacy ratio stood 
at  18%  in  2024  (from  17.9%  in  2023),  well  above  the  required  12%.  The  non-performing 
loans (NPL) ratio slightly increased to 5.6% in 2024 (from 5.1% in 2023), while the coverage 
ratio for NPLs stood at 74.8% in 2024. Banks’ profitability remained stable with an estimated 
return on assets of 1.2%.  

Public finances show vulnerabilities, though the IMF’s overall public debt sustainability 
assessment  is  supportive.  The  general  government  deficit  reached  5.6%  of  GDP  in  2024, 
which is higher than in the previous year (from 5.1% of GDP in 2023). The primary deficit 
(excluding interest payments on public debt) stood at 0.1% of GDP (0.4% of GDP in 2023). 
Current  expenditure  accounted  for  89.9%  of  public  expenditure.  Besides  interest  payments 
(20%  of  current  expenditure)  main  components  of  expenditure  were  military  expenditure 
(29.6%), compensation of civil sector employees (19.3%) and pensions (16.3%). Public debt 
amounted to 90.4% of GDP (excluding the debt held by the Social Security Investment Fund, 
SSIF)  in  2024,  slightly  higher  than  the  89.2%  of  GDP  in  2023.  Including  the  SSIF  debt, 
public debt  stood at  116.8% of GDP in  2024, which compares to  113.8% in  2023.  Jordan’s 
public  debt  is  assessed  as  sustainable  with  a  high  probability  by  the  IMF  (Article  IV,  June 
2025). Indeed, while the high level of public debt renders Jordan vulnerable to a tightening in 
financial  conditions,  the  large  share  of  concessional  debt  provides  an  important  cushion. 
Moreover, Jordan has significant buffers: foreign exchange reserves correspond to 7.7 months 
of imports; and assets of the Social Security Investment Fund reached 40 percent of GDP. The 
risk of sovereign stress is assessed as moderate by the IMF. 

Jordan’s external situation remains fragile, but foreign exchange reserves are adequate. 
The current account deficit (including grants) widened to 5.9% of GDP in 2024 (from 3.6% in 
2023),  as  the  services  surplus  decreased,  while  the  goods  deficit  and  the  primary  income 
deficit  widened.  Main  domestic  goods  export  items  were  chemicals  and  minerals  (30%  of 
goods exports) mainly destined for India and Arab countries, as well as clothes (20%) largely 
destined for the US. The largest goods import groups were transport equipment & spare parts 
(10%  of  goods  imports)  mainly  from  China,  the  US  and  South  Korea;  petroleum  products 
(6%) mainly from Saudi Arabia and India; and textiles (5%) from Asia. The current account 
deficit continued to be mitigated by strong secondary income flows: remittances reached 6.8% 

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in  2024,  while  programme 

of  GDP 
IMF  and  other 
bilateral/multilateral  support) reached 4.2% of  GDP.  Foreign  direct  investment  decreased to 
3.3% of GDP in 2024. The CBJ's gross foreign reserves remained strong and above 100% of 
the IMF’s reserve adequacy metric.  

(World  Bank, 

financing 

The  outlook  over  the  next  few  years  is  uncertain.  Looking  ahead,  a  modest  uptick  in 
growth for 2025 and in the following years was expected by the IMF in June 2025, but this 
forecast predates the Israel-Iran conflict. The regional wars pose an important downside risk 
to  the  outlook,  in  particular  due  to  the  increased  level  of  uncertainty  in  the  region  and  the 
possible future impact on the important tourism sector, further fuelled by the recent  conflict 
between  Israel-Iran.  External  and  fiscal  deficits  are  expected  to  remain  high,  reflecting  the 
underlying  structural  challenges  to  sustainably  improve  fiscal  revenue  and  the  trade  deficit. 
Given  the  large  public  debt  burden,  the  fiscal  consolidation  course  needs  to  continue,  in 
addition to ongoing economic modernisation efforts to improve the business environment, to 
foster private sector growth, including by attracting foreign direct investment. 

• 

Consistency with existing policy provisions in the policy area 

The  proposed  MFA  would  support  the  resources  allocated  to  Jordan  under  the  existing 
operation  adopted  by  the  European  Parliament  and  the  Council  on  14 April 2025  under  the 
Decision (EU) 2020/332 on providing MFA to the Hashemite Kingdom of Jordan amounting 
to EUR 500 million in loans to be disbursed during the period 2025-2027. 

• 

Consistency with other EU policies 

The EU and Jordan have developed a close and long-standing partnership, underpinned 
by the Association Agreement that has been in force since 2002, and that was upgraded 
to an Advanced Status partnership in 20103. This relationship was further reinforced by the 
adoption of the EU-Jordan Partnership Priorities in June 2022, setting the strategic framework 
for cooperation until 2027. The priorities reflect shared values and a commitment to reforms 
in  the areas  of good governance  and respect for  human rights,  the promotion of  sustainable 
economic  development  and,  and  the  strengthening  of  cooperation  on  regional  stability  and 
security.  

Jordan also  enjoys solid economic relations with the European Union, which stands as 
one of its key trading and investment partners. Their trade relationship is anchored in the 
EU-Jordan  Association  Agreement,  which  facilitates  preferential  access  to  EU  markets. 
Jordan  has  also  benefited  from  the  EU’s  simplified  rules  of  origin  initiative  since  2016, 
designed to  stimulate exports and industrial  development.  In line with  the EU’s 2021 Trade 
Policy  Review,  the  EU  and  Jordan  are  working  to  deepen  trade  and  investment  relations, 
including  efforts  to  improve  the  business  climate,  advance  sector-specific  regulatory 
alignment, and fully harness the potential of the Association Agreement. 

This  cooperation  was  further  elevated  through  the  launch  of  the  EU-Jordan  Strategic 
and Comprehensive Partnership, endorsed in January 2025. The partnership outlines key 
areas for deeper collaboration, including political relations and regional cooperation, security 

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Decision  (EU)  2025/793  of  the  European  Parliament  and  of  the  Council  of  14  April  2025  providing 
further  macro-financial  assistance  to  the  Hashemite  Kingdom  of  Jordan  (OJ  L,  2025/793,  22.4.2025, 
ELI: http://data.europa.eu/eli/dec/2025/793/oj ). 
OJ L 129, 15.5.2002, p. 3–176. (http://data.europa.eu/eli/agree_internation/2002/357(1)/oj)  

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and  defence,  economic  resilience,  trade  and  investment,  human  capital  development, 
migration,  and  the  protection  and  support  of  refugees.  These  pillars  align  closely  with 
Jordan’s Economic Modernisation Vision (2022–2033) and aim to support the country’s long-
term resilience, inclusive growth, and ability to respond to regional and global challenges. 

The  proposed  MFA  operation  aligns  with  the  EU’s  broader  objectives  under  the 
European  Neighbourhood  Policy  (ENP).  It  contributes  to  support  the  European  Union’s 
objectives of economic stability and development in Jordan and, more broadly, resilience in 
the  South  European  neighbourhood.  The  EU  MFA  would  complement  the  grants  mobilised 
under the NDICI and other EU programmes and instruments and, in particular, the conditions 
envisaged under the budget support packages being implemented by the EU under the current 
multiannual financial framework (MFF) 2021-2027. By continuing to support the adoption by 
the  Jordanian  authorities  of  an  appropriate  framework  for  macroeconomic  policy  and 
structural  reforms,  the  EU’s  MFA  would  increase  the  added  value  and  effectiveness  of  the 
EU’s overall financial support measures, including through other instruments. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The  legal  basis  for  this  proposal  is  Article  212  of  the  Treaty  on  the  Functioning  of  the 
European Union (‘TFEU’).  

• 

Subsidiarity (for non-exclusive competence)  

The  subsidiarity  principle  is  respected  as  the  objectives  of  maintaining  short-term 
macroeconomic  stability  in  Jordan  cannot  be  sufficiently  achieved  by  the  Member  States 
alone and can be better achieved by the European Union. The main reasons are the budgetary 
constraints faced at the national level and the need for strong donor coordination in order to 
maximise the scale and effectivenes of the assistance.  

• 

Proportionality 

The  proposal  complies  with  the  proportionality  principle:  it  confines  itself  to  the  minimum 
required in order to achieve the objectives of short-term macroeconomic stability and does not 
go beyond what is necessary for that purpose.  

As identified by the Commission based on the estimates of the IMF in the context of the 
EFF,  the  amount  of  the  proposed  new  MFA  corresponds  to  14.6%  of  the  estimated 
residual financing gap for the period 2025-2027. This is consistent with standard practices 
on  burden-sharing  for  MFA  operations  (for  a  country  with  an  Association  Agreement,  the 
upper limit is 60% according to the ECOFIN Council conclusions of 8 October 2002), taking 
into account the assistance pledged to Jordan by other bilateral and multilateral donors. When 
considering the overall EU support to Jordan via various instruments (including the proposed 
MFA,  MFA  IV,  EU  budget  support  and  EIB  loans,  excluding  bilateral  support  by  Member 
States),  the  total  EU  support  would  cover  about  35.4%  of  the  estimated  residual  external 
financing gap. The overall EU contribution including budget support and EIB loans to Jordan 
is expected to be higher than in the past. 

• 

Choice of instrument 

Project  finance  or  technical  assistance  would  not  be  suitable  or  sufficient  to  address  the 
macroeconomic  objectives.  The  key  added  value  of  the  MFA  compared  to  other  EU 
instruments  is  to  alleviate  external  financial  constraints  and  to  help  create  a  stable 
macroeconomic  framework,  including  by  promoting  a  sustainable  balance  of  payments  and 

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budgetary situation, and an appropriate framework for structural reforms. By helping to put in 
place  an  appropriate  overall  policy  framework,  MFA  can  increase  the  effectiveness  of  the 
actions financed in Jordan under other, more narrowly-focused EU instruments. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

The  Commission’s  MFA  proposal  builds  on  lessons  learnt  from  ex-post  evaluations  carried 
out on past operations in the EU’s neighbourhood, including on the ex-post evaluation of the 
MFA-II  operation  provided  to  Jordan  in  2016-2019  that  was  governed  by  Decision  (EU) 
2016/2371 of the European Parliament and of the Council of 14 December 20164, as well as 
the most recent ex-post evaluation of Covid-19 MFA package, which covered Jordan MFA-
III5. 

The Jordan 2016-2019 ex-post evaluation6 concluded overall that the MFA-II programme met 
its  objectives.  Its  design  was  relevant  to  Jordan’s  economic  challenges,  while  it  contributed 
substantially  to  the  effective  stabilisation  of  Jordan’s  external  and  fiscal  financial  position. 
The  programme  had  considerable  added  value  for  the  EU  as  it  supported  macroeconomic 
stability  in  a  neighbouring  partner  country  and  mitigated  the  impact  of  the  Syrian  refugees 
crisis.  It  was  designed  and  implemented  in  a  way  that  was  coherent  with  other  EU  policies 
and instruments.  

• 

Stakeholder consultations 

MFA  is  provided  as  an  integral  part  of  the  international  support  for  the  economic 
stabilisation  of  Jordan,  including  from  the  IMF.  To  prepare  this  proposal  for  MFA,  the 
Commission consulted with the IMF, which is disbursing a sizeble financing programme. The 
Commission consulted the Alternate Economic and Financial Committee on the 2 July 2025, 
where an endorsement for the draft proposal was provided. The Commission has also been in 
regular contact with the Jordanian authorities. 

• 

Collection and use of expertise 

In  line  with  the  requirements  under  Regulation  (EU,  Euratom)  2024/25097  (‘Financial 
Regulation’), the Commission services has carried out an operational assessment of the 
financial and administrative circuits of Jordan ahead of the implementation of MFA IV. 
The purpose was to ensure that the country’s procedures for managing programme assistance, 
including  MFA,  provide  adequate  guarantees  for  sound  financial  management.  The  final 

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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, ELI: http://data.europa.eu/eli/dec/2016/2371/oj). 
The evaluation was conducted by external consultants and concluded in May 2025. The publication of 
the ex-post evaluation alongside the Commission Staff Working Document (SWD) is expected for the 
second half of 2025. 
Ex-post  evaluation  on:  MFA  Operations  to  the  Southern  Neighbourhood  Countries  of  Tunisia  and 
Jordan  (2016-2019),  September  2021,  available  at:  https://commission.europa.eu/about-european-
commission/departments-and-executive-agencies/economic-and-financial-affairs/evaluation-reports-
economic-and-financial-affairs-policies-and-spending-activities/joint-ex-post-evaluation-macro-
financial-assistance-mfa-operations-tunisia-and_en 
OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj (BG, ES, CS, DA, DE, ET, 
EL, EN, FR, GA, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV) 

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7 

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report  of  the  operational  assessment,  prepared  by  a  consultancy  company,  was  received  in 
October  2024.  The  report  noted  clear  progress  in  public  finance  management  systems  and 
other  financial  circuits  since  2020,  when  the  last  exercise  was  undertaken.  The  report 
concluded that the status  of  Jordan’s  financial circuits  and procedures  is  deemed favourable 
for an MFA operation. As the operational assessment was conducted less than a year ago and 
its findings remain valid, the Commission considers that a new assessment is not required for 
the proposed MFA V operation.  

• 

Impact assessment 

The EU’s MFA is an exceptional emergency instrument aimed at addressing severe balance-
of-payments difficulties in non-EU countries. This MFA proposal is therefore exempted from 
the  requirement  to  carry  out  an  Impact  Assessment  in  line  with  the  Commission's  Better 
Regulation Guidelines (SWD(2015) 111 final) as there is a political imperative to move ahead 
quickly in a situation requiring a rapid response.  

More  generally,  the  Commission's  MFA  proposals  build  on  lessons  learnt  from  ex-post 
evaluations carried out on past operations in the EU's neighbourhood. The new MFA, and the 
economic adjustment and reform programme attached to it, will help alleviate Jordan’s short-
term financing needs while supporting policy measures aimed at strengthening medium-term 
balance  of  payments  and  fiscal  sustainability  and  raising  sustainable  growth,  thus 
complementing the programme of the IMF Executive Board. These policy conditions should 
address some of the fundamental weaknesses shown over the years by the Jordanian economy 
and economic governance system. Possible areas of conditionality could, in principle, include 
reforms  to  improve  economic  governance,  including  public  finance  management  and  tax 
administration,  social  and  labour  market  policies,  business  environment  and  energy/green 
transition.  

• 

Fundamental rights 

Countries  that  are  covered  by  the  European  Neighbourhood  Policy  are  eligible  for  MFA.  A 
pre-condition  for  granting  MFA  is  that  the  eligible  country  respects  effective  democratic 
mechanisms, including a multi-party parliamentary system and the rule of law, and guarantees 
respect for human rights.  

Jordan has continued its political reform efforts to strengthen parliamentary democracy 
and the rule of law. In 2021, Jordan launched a political modernisation process  aspiring to 
foster political participation of women and youth, to overcome tribal allegiance and encourage 
the  formation  of  nationwide  programme-based  political  parties, 
through 
amendments  to  the  Elections  and  Political  Parties  Laws.  In  2023,  the  government  amended 
the Labour Code in line with international human rights standards. Despite a very challenging 
context, Jordan remains committed to advancing reforms towards a more effective democratic 
political  system  based  on  the  rule  of  law  and  respect  for  human  rights.  In  this  context,  the 
political preconditions for MFA are considered to be satisfied. 

introduced 

4. 

BUDGETARY IMPLICATIONS 

The proposed MFA operation of up to EUR 500 million in loans for Jordan is planned to 
be disbursed in three instalments to be released over a period of up to 2.5 years. The loan 
will  be  provided  under  the  External  Action  Guarantee  with  a  provisioning  at  a  rate  of  9%, 
which  will  be  programmed  under  the  NDICI-GE,  for  a  total  amount  of  EUR  45  million 
(budget  line  14  02  01  70  ‘NDICI  –  Provisioning  of  the  Common  Provisioning  Fund’).  The 
loans  shall  be  granted  in  the  form  of  amortising  loans  with  a  grace  period  and  subsequent 
capital  repayments  in  equal  tranches  over  a  long  period.  Such  a  loan  structure  will  be 

EN 

8 

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beneficial  for  both  the  beneficiary  in  that  it  facilitates  repayments,  and  the  EU  budget,  by 
spreading contingent liabilities over a long time-frame.  

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The  European  Union  will  make  the  MFA  available  to  Jordan  for  a  total  amount  of  up  to 
EUR 500 million, provided in  the form  of loans, which will contribute to covering Jordan’s 
residual  external  financing  needs  in  the  operation’s  availability  period.  The  assistance  is 
planned  to  be  disbursed  in  three  instalments,  provided  that  the  policy  measures  attached  to 
each  instalment  have  been  fully  implemented  in  a  timely  manner.  The  assistance  will  be 
managed  by  the  Commission.  Specific  provisions  on  the  prevention  of  fraud  and  other 
irregularities, consistent with the Financial Regulation, are applicable.  

Disbursements  under  the  proposed  MFA  operation  will  be  conditional  on  successful 
programme  reviews  under  the  IMF  programme.  In  addition,  the  Commission  and  the 
Jordanian authorities will agree on a specific set of structural reform measures, to be set out in 
a  Memorandum  of  Understanding.  These  reform  measures  should  support  the  authorities’ 
reform  agenda  and  complement  the  programmes  agreed  with  the  IMF,  the  World  Bank  and 
other donors, as well as the policy programmes  associated with  the EU’s budgetary support 
operations.  They  should  be  consistent  with  the  main  economic  reform  priorities  agreed 
between  the  EU  and  Jordan  in  the  Association  Agreement,  the  Partnership  Priorities  and 
annexed Compact, the SCP and Jordan's Modernisation Vision and other national strategies.  

EN 

9 

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2025/0251 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

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

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 212(2) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Acting in accordance with the ordinary legislative procedure8, 

Whereas: 

(1) 

(2) 

(3) 

the 

framework  of 

(‘Jordan’)  are  developing  within 

Relations between the European Union (‘the Union’) and the Hashemite Kingdom of 
Jordan 
the  European 
Neighbourhood  Policy  (ENP).  The  Union  and  Jordan  signed  an  Association 
Agreement on 24 November 1997, which entered into force on 1 May 20029. Under 
the Association Agreement, the Union and Jordan gradually established a Free Trade 
Area  over  a  transitional  period  of  12  years.  In  addition,  an  agreement  on  further 
liberalisation of agricultural products entered into force in 2007. In 2010, an Advanced 
Status  partnership  was  agreed  between  the  Union  and  Jordan  that  entails  expanded 
areas of cooperation. A protocol on Dispute Settlement Mechanisms for trade between 
the Union and Jordan initialled in December 2009 entered into force on 1 July 2011. 
Bilateral  political  dialogue  and  economic  cooperation  have  been  further  developed 
within  the  framework  of  the  Association  Agreement,  the  EU-Jordan  Partnership 
Priorities  adopted  for  2022-2027  and  the  Strategic  and  Comprehensive  Partnership, 
signed in January 2025.  

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

The  Jordanian  economy  has  been  heavily  affected  by  prolonged  regional  instability, 
notably  the  conflict  in  Syria  and,  the  conflict  in  Israel-Gaza,  along  with  security 
disruptions  in  the  Red  Sea.  These  instabilities  have  added  further  uncertainty, 
undermining  investor  confidence,  disrupting  trade  routes,  and  weakening  tourism. 
These challenges have come on top of lingering economic and social impacts from the 

8 
9 

Position of the European Parliament of … and Decision of the Council of … 
OJ L 129, 15.5.2002, p. 3, ELI: http://data.europa.eu/eli/agree_internation/2002/357(1)/oj.  

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COVID-19 pandemic global price shocks following Russia’s invasion of Ukraine, and 
higher  borrowing  costs  linked  to  tighter  global  financial  conditions.  More  recently, 
increased  uncertainty  of  the  global  environement  also  represents  an  additional 
challenge.  While Jordan has avoided a renewed economic contraction, in part thanks 
to  the  pursuit  of  sound  macro-economic  policies  and  reforms,  the  recovery  remains 
sluggish.  Unemployment  remains  persistently  high,  particularly  among  youth  and 
women, and fiscal and external financing pressures continue to weigh on the economy. 

The  conflict  in  Israel-Gaza  alongside  the  renewed  violence  in  the  region,  notably 
escalating tensions between Israel and Iran in mid-June 2025, led to flight suspensions 
in Jordan and is likely to further complicate the country’s fragile economic recovery, 
dampen  investor  and  tourist  confidence,  and  contribute  to  an  increasingly  uncertain 
outlook.  Social  tensions  in  Jordan  have  remained  low  but  could  rise  if  the  ongong 
conflicts  were  to  further  escalate.  Furthermore,  climate-change  risks  exacerbating 
Jordan’s  already  dire  water  scarcity  could  hurt  growth  and  add  further  pressures  on 
government finances.  

In  January  2024,  the  Jordanian  authorities  and  the  IMF  agreed  on  a  economic 
adjustment programme supported by a four-year Extended Fund Facility (EFF) in the 
amount  of  USD  1.2  billion,  which  is  currently  being  implemented.  As  of  July  2025, 
Jordan's performance under the EFF has been strong, with all quantitative performance 
criteria and structural benchmarks met across the first three programme reviews (July 
and  December  2024,  and  April  2025),  triggering  disbursements  totalling  USD  391 
million out of the approved USD 1.2 billion. 

In  April  2025,  the  Union  adopted  a  fourth  programme  of  macro-financial  assistance 
(MFA-IV)10  of EUR 500  million  in  the form  of loans, in  response to  a request  from 
Jordan  in  October  2023.  The  disbursements  are  planned  over  2025–2027,  upon 
fulfilment of agreed policy conditions in the Memorandum of Understanding, covering 
measures  in  public  finance  management,  governance  and  anti-corruption,  social  and 
labour market policies, energy and business environment. The MFA IV follows from a 
series of three previous MFA programmes (MFA I: EUR 180 million; MFA II: EUR 
200  million;  MFA  III:  EUR  500  million  +  EUR  200  million  top-up  in  response  to 
COVID-19) provided a total of EUR 1.08 billion in loans between 2014 and 2023.   

Since  the  beginning  of  the  Syrian  crisis  in  2011,  the  Union  has  made  available 
approximately  EUR  3.5  billion  to  Jordan  under  different  instruments  (including 
EUR 1.08  million  under  the  three  MFA  operations)  to  help  the  country  preserve 
economic  stability,  sustain  political  and  economic  reform  and  address  its  related 
humanitarian, development and security needs.  In addition,  the European Investment 
Bank has allocated around EUR 2.4 billion in project loans to Jordan since 2011.  

For  the  period  2021-2024,  Union’s  bilateral  indicative  allocation  (grants)  under  the 
Neighbourhood  Development  and  International  Cooperation  Instrument  –  Global 
Europe  (NDICI-GE)  to  Jordan  amounts  to  around  EUR  360  million  and  is 
complemented  by  Union’s  support  to  help  Jordan  address  the  impact  of  the  Syrian 
crisis  (EUR  214  million  from  2021  to  2023)  as  well  as  other  regional  and  thematic 
programmes.  During  the  period  2014-2020,  the  Union  provided  support  to  Jordan 
mainly  through  the  European  Neighbourhood  Instrument  with  EUR  765  million. 

(4) 

(5)  

(6) 

(7) 

(8) 

10 

Decision  (EU)  2025/793  of  the  European  Parliament  and  of  the  Council  of  14  April  2025  providing 
further  macro-financial  assistance  to  the  Hashemite  Kingdom  of  Jordan  (OJ  L,  2025/793,  22.4.2025, 
ELI: http://data.europa.eu/eli/dec/2025/793/oj ). 

EN 

2 

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During  the  same  period,  Jordan  also  benefitted  from  additional  EUR  126  million 
channelled via the Neighbourhood Investmen Platform (NIP), which leveraged around 
EUR  580  million  in  investments.  In  2021,  under  the  Economic  and  Investment  Plan 
(EIP),  the  EU  launched  more  than  20  flagship  projects  in  Jordan,  committing 
approximately EUR 461 million (via grants, blending and guarantees) and leveraging 
around EUR 4.760 billion in total investment.   

(9) 

In January 2025, in view of the still difficult  economic situation and outlook, Jordan 
requested additional macro-financial assistance from the Union. 

(10)  Given  that  Jordan  is  a  country  covered  by  the  ENP,  it  should  be  considered  to  be 

eligible to receive macro-financial assistance from the Union. 

(11)  The Union’s macro-financial assistance should be an exceptional financial instrument 
of untied and undesignated balance-of-payments support, which aims at addressing the 
beneficiary’s 
the 
implementation  of  a  policy  programme  containing  strong  immediate  adjustment  and 
structural  reform  measures  designed  to  improve  the  balance-of-payments  position  in 
the short term. 

immediate  external  financing  needs  and  should  underpin 

(12)  Given that a residual external financing gap remains in Jordan’s balance of payments 
over and above the resources provided by IMF and other multilateral institutions, the 
provision by the Union of additional macro-financial assistance to Jordan is, under the 
current  exceptional  circumstances,  considered  to  be  an  appropriate  response  to 
Jordan’s request to the Union to support its economic stabilisation, in conjunction with 
the IMF programme. The Union’s enlarged macro-financial assistance would support 
the economic stabilisation and the structural reform agenda of Jordan, supplementing 
resources made available under the IMF’s financial arrangement. 

(13)  The  Union’s  macro-financial  assistance  should  aim  to  support  the  restoration  of  a 
sustainable external financing situation for Jordan thereby supporting its economic and 
social development. 

(14)  The  Union’s  macro-financial  assistance  is  expected  to  go  hand-in-hand  with  the 
implementation  of  budget  support  operations  under  NDICI-GE  established  by 
Regulation (EU) 2021/947 of the European Parliament and of the Council11.  

(15)  The determination of the amount of the Union’s macro-financial assistance is based on 
a complete quantitative assessment of Jordan’s residual external financing needs, and 
takes into account its capacity to finance itself with its own resources, in particular the 
international  reserves  at  its  disposal.  The  Union’s  macro-financial  assistance  should 
complement the programmes and resources provided by the IMF and the World Bank. 
The  determination  of  the  amount  of  the  assistance  also  takes  into  account  expected 
financial  contributions  from  bilateral  and  multilateral  donors  and  the  need  to  ensure 
fair  burden  sharing  between  the  Union  and  other  donors,  as  well  as  the  pre-existing 
deployment  of  the  Union’s  other  external  financing  instruments  in  Jordan  and  the 
added value of the overall Union involvement. 

11 

Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing 
the  Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global  Europe, 
amending  and  repealing  Decision  No  466/2014/EU  and  repealing  Regulation  (EU)  2017/1601  and 
(OJ  L  209,  14.6.2021,  p.  1),  ELI: 
Council  Regulation 
http://data.europa.eu/eli/reg/2021/947/o). 

(EC,  Euratom)  No  480/2009 

EN 

3 

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(16)  The Commission should ensure that the Union’s macro-financial assistance is legally 
and  substantially  in  accordance  with  the  key  principles  and  objectives,  and  of  the 
measures taken within, the different areas of external action and other relevant Union 
policies. 

(17)  The  Union’s  macro-financial  assistance  should  support  the  Union’s  external  policy 
towards  Jordan.  Commission  services  and  the  European  External  Action  Service 
(EEAS)  should  work  closely  together  throughout  the  macro-financial  assistance 
operation  in  order  to  coordinate,  and  to  ensure  the  consistency  of,  Union  external 
policy. 

(18)  The Union’s macro-financial assistance should support Jordan’s commitment to values 
shared with the Union, including democracy, the rule of law, good governance, respect 
for  human  rights,  sustainable  development  and  poverty  reduction,  as  well  as  its 
commitment to the principles of open, rule-based and fair trade. 

(19)  A  pre-condition  for  granting  the  Union’s  macro-financial  assistance  should  be  that 
including  a  multi-party 
Jordan  respects  effective  democratic  mechanisms  – 
parliamentary system – and the rule of law, and guarantees respect for human rights. 
In  addition,  the  specific  objectives  of  the  Union’s  macro-financial  assistance  should 
strengthen  the  efficiency,  transparency  and  accountability  of  the  public  finance 
management  systems  in  Jordan  and  promote  structural  reforms  aimed  at  supporting 
sustainable and inclusive growth, employment creation and fiscal consolidation. Both 
the fulfilment of the pre-conditions and the achievement of those objectives should be 
regularly monitored by the Commission and the EEAS. 

(20) 

In  order  to  ensure  that  the  Union’s  financial  interests  linked  to  the  Union’s  macro-
financial assistance are protected efficiently, Jordan should take appropriate measures 
relating  to  the  prevention  of,  and  fight  against,  fraud,  corruption  and  any  other 
irregularities  linked  to  the  assistance.  In  addition,  a  loan  agreement  to  be  concluded 
between  the  Commission  and  the  Jordanian  authorities  should  contain  provisions 
authorising European Anti-Fraud Office (OLAF) to carry out investigations, including 
on-the-spot checks and inspections, in accordance with the provisions and procedures 
laid down in Regulation (EU, Euratom) No 883/2013 of the European Parliament and 
of  the  Council12  and  Council  Regulation  (Euratom,  EC)  No  2185/96613,  the 
Commission  and  the  Court  of  Auditors  to  carry  out  audits  and  the  European  Public 
Prosecutor’s  Office  to  exercise  its  competences  with  regard  to  the  provision  of  the 
Union’s macro-financial assistance during and after its availability period. 

(21)  Release of the Union’s  macro-financial assistance is  without prejudice to  the powers 

of the European Parliament and the Council (as budgetary authority). 

(22)  The  amounts  of  provisioning  required  for  the  Union’s  macro-financial  assistance 
should be consistent with the budgetary appropriations provided for in the multiannual 
financial framework.  

12 

13 

Regulation  (EU,  Euratom)  No  883/2013  of  the  European  Parliament  and  of  the  Council  of  11 
September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and 
repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council 
Regulation 
ELI: 
(OJ 
http://data.europa.eu/eli/reg/2013/883/oj). 
Council  Regulation  (EU)  2017/1939  of  12  October  2017  implementing  enhanced  cooperation  on  the 
establishment  of  the  European  Public  Prosecutor’s  Office  (‘the  EPPO’)  (OJ  L  283,  31.10.2017,  p.  1, 
ELI: http://data.europa.eu/eli/reg/2017/1939/oj). 

(Euratom)  No 

18.9.2013, 

1074/1999 

248, 

p. 

1, 

L 

EN 

4 

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(23)  The  Union’s  macro-financial  assistance  should  be  managed  by  the  Commission.  In 
order  to  ensure  that  the  European  Parliament  and  the  Council  are  able  to  follow  the 
implementation  of  this  Decision,  the  Commission  should  regularly  inform  them  of 
developments relating to the assistance and provide them with the relevant documents. 

(24) 

In  order  to  ensure  uniform  conditions  for  the  implementation  of  this  Decision, 
implementing powers should be conferred on the Commission. Those powers should 
be  exercised  in  accordance  with  Regulation  (EU)  No  182/2011  of  the  European 
Parliament and of the Council14. 

(25)  The  Union’s  macro-financial  assistance  should  be  subject  to  economic  policy 
conditions,  to  be  laid  down  in  a  Memorandum  of  Understanding.  In  order  to  ensure 
uniform conditions of implementation and for reasons of efficiency, the Commission 
should  be  empowered  to  negotiate  such  conditions  with  the  Jordanian  authorities 
under  the  supervision  of  the  committee  of  representatives  of  the  Member  States  in 
accordance with Regulation (EU) No 182/2011 of the European Parliament and of the 
Council. Considering the potentially significant impact of assistance, it is appropriate 
that the examination procedure as specified in Regulation (EU) No 182/2011 be used. 
Considering  the  amount  of  the  Union’s  macro-financial  assistance  to  Jordan,  the 
examination  procedure  should  apply  to  the  adoption  of  the  Memorandum  of 
Understanding, and to any reduction, suspension or cancellation of the assistance. 

HAVE ADOPTED THIS DECISION: 

1. 

2. 

3. 

4. 

5. 

14 

Article 1 

The Union shall make macro-financial assistance of a maximum amount of EUR 500 
million available to Jordan (‘the Union’s macro-financial assistance’), with a view to 
supporting  Jordan’s  economic  stabilisation  and  a  substantive  reform  agenda.  The 
assistance  shall  contribute  to  covering  Jordan’s  balance  of  payments  needs  as 
identified in the IMF programme.  

The  full  amount  of  the  Union’s  macro-financial  assistance  shall  be  provided  to 
Jordan in the form of loans.  

The  Commission  shall  be  empowered,  on  behalf  of  the  Union,  to  borrow  the 
necessary funds on the capital markets or from financial institutions and to on-lend 
them to Jordan.  

The  release  of  the  Union’s  macro-financial  assistance  shall  be  managed  by  the 
Commission in a manner consistent with the agreements or understandings reached 
between  the  International  Monetary  Fund  (IMF)  and  Jordan,  and  with  the  key 
principles and objectives of economic reforms set out in the EU-Jordan Association 
Agreement. 

The Commission shall regularly inform the European Parliament and the Council of 
including 
developments 

the  Union’s  macro-financial  assistance, 

regarding 

Regulation  (EU)  No  182/2011  of  the  European  Parliament  and  of  the  Council  of  16  February  2011 
laying down the rules and general principles concerning mechanisms for control by Member States of 
implementing  powers  (OJ  L  55,  28.2.2011,  p.  13,  ELI: 
the  Commission’s  exercise  of 
http://data.europa.eu/eli/reg/2011/182/oj). 

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5 

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6. 

7. 

1. 

2. 

3. 

1. 

2. 

3. 

15 

disbursements  thereof,  and  shall  provide  those  institutions  with  the  relevant 
documents in due time. 

The Union’s macro-financial assistance shall be made available for a period of two 
and  a  half  years,  starting  from  the  first  day  after  the  entry  into  force  of  the 
Memorandum of Understanding referred to in Article 3(1).  

If  the  financing  needs  of  Jordan  decrease  fundamentally  during  the  period  of  the 
disbursement  of  the  Union’s  macro-financial  assistance  compared  to  the  initial 
projections, the Commission shall adopt implementing acts to reduce the amount of 
the assistance or suspend or cancel it. Those implementing acts shall be adopted in 
accordance with the examination procedure referred to in Article 7(2). 

Article 2 

A  pre-condition  for  granting  the  Union’s  macro-financial  assistance  shall  be  that 
Jordan  respects  effective  democratic  mechanisms  –  including  a  multi-party 
parliamentary system – and the rule of law, and guarantees respect for human rights. 

The Commission’s services and the European External Action Service shall monitor 
the fulfilment of this  pre-condition  throughout the life cycle of the  Union’s macro-
financial assistance. 

Paragraphs  1  and  2  of  this  Article  shall  be  applied  in  accordance  with  Council 
Decision 2010/427/EU15. 

Article 3 

The  Commission,  in  accordance  with  the  examination  procedure  referred  to  in 
Article  7(2),  shall  agree  with  the  Jordanian  authorities  on  economic  policy  and 
financial  conditions,  focusing  on  structural  reforms  and  sound  public  finances,  to 
which the Union’s  macro-financial  assistance is  to  be subject,  to  be laid  down in  a 
Memorandum of Understanding (‘the Memorandum of Understanding’) which shall 
include a timeframe for the fulfilment of those conditions. The economic policy and 
financial conditions set out in the Memorandum of Understanding shall be consistent 
with  the  agreements  or  understandings  referred  to  in  Article  1(4),  including  the 
macroeconomic  adjustment  and  structural  reform  programmes  implemented  by 
Jordan with the support of the IMF. 

The  conditions  referred  to  in  paragraph  1  shall  aim,  in  particular,  at  enhancing  the 
efficiency,  transparency  and  accountability  of  the  public  finance  management 
systems  in  Jordan,  including  for  the  use  of  the  Union’s  macro-financial  assistance. 
Progress  in  mutual  market  opening,  the  development  of  rules-based  and  fair  trade, 
and  other  priorities  in  the  context  of  the  Union’s  external  policy  shall  also  be  duly 
taken into account  when designing the policy measures. Progress  in  attaining those 
objectives shall be regularly monitored by the Commission. 

The detailed financial  terms of the Union’s macro-financial  assistance shall be laid 
down  in  a  loan  agreement  in  accordance  with  Article  223    of  Regulation  (EU, 

Council  Decision  2010/427/EU  of  26  July  2010  establishing  the  organisation  and  functioning  of  the 
ELI: 
(OJ 
European 
http://data.europa.eu/eli/dec/2010/427/oj). 

3.8.2010, 

External 

Service 

Action 

201, 

30, 

p. 

L 

EN 

6 

  EN 

 
Euratom)  2024/2509  of  the  European  Parliament  and  of  the  Council16,  to  be 
concluded between the Commission and the Jordanian authorities. 

The  Commission  shall  verify,  at  regular  intervals,  that  the  conditions  referred  to  in 
Article 4(3) continue to  be met, including  whether the economic policies of Jordan 
are in accordance with the objectives of the Union’s macro-financial assistance. In so 
doing,  the Commission shall coordinate closely with  the IMF and the World Bank, 
and, where necessary, with the European Parliament and the Council. 

Article 4 

Subject  to  the  conditions  referred  to  in  paragraph  3  of  this  Article,  the  Union’s 
macro-financial assistance shall be made available by the Commission in three loan 
instalments. The size of each instalment shall be laid down in the Memorandum of 
Understanding referred to in Article 3(1). 

The amounts  of the Union’s macro-financial assistance shall be provisioned, where 
required, in accordance with Regulation (EU) 2021/947. 

The  Commission  shall  decide  on  the  release  of  the  instalments  subject  to  the 
fulfilment of all the following conditions:  

(a) 

(b) 

the pre-condition set out in Article 2(1); 

a  continuous  satisfactory  track  record  of  implementing  a  policy  programme 
that contains strong adjustment and structural reform measures supported by a 
non-precautionary IMF credit arrangement;  

(c) 

the  satisfactory  implementation  of  the  economic  policy  and  financial 
conditions agreed in the Memorandum of Understanding. 

The  release  of  the  second  instalment  shall  not,  in  principle,  take  place  earlier  than 
three  months  after  the  release  of  the  first  instalment.  The  release  of  the  third 
instalment shall not, in principle, take place earlier than three months after the release 
of the second instalment. 

Where  the  conditions  referred  to  in  paragraph  3  of  this  Article,  first  subparagraph, 
are not met, the Commission shall temporarily suspend or cancel the disbursement of 
the  Union’s  macro-financial  assistance.  In  such  cases,  it  shall  inform  the  European 
Parliament and the Council of the reasons for the suspension or cancellation. 

The  Union’s  macro-financial  assistance  shall  be  disbursed  to  the  Central  Bank  of 
Jordan. Subject to the provisions to be agreed in the Memorandum of Understanding, 
including a confirmation of residual budgetary financing needs, the Union funds may 
be transferred by the Central Bank of Jordan to the Jordanian Ministry of Finance as 
the final beneficiary. 

In order to finance the Union’s macro-financial assistance in the form of loans, the 
Commission  shall  be  empowered,  on  behalf  of  the  Union,  to  borrow  the  necessary 

Article 5 

Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 
2024 on the financial rules applicable to the general budget of the Union (OJ L, 2024/2509, 26.9.2024, 
ELI: http://data.europa.eu/eli/reg/2024/2509/oj, ELI: http://data.europa.eu/eli/reg/2024/2509/oj). 

4. 

1. 

2. 

3. 

4. 

5. 

1. 

16 

EN 

7 

  EN 

 
 
funds on the capital markets or from financial institutions in accordance with Article 
223 of Regulation (EU, Euratom) 2024/2509.  

The  Commission  shall  enter  into  a  loan  agreement  with  Jordan  in  respect  of  the 
amount referred to  in  Article 1.  The loan agreement  shall lay down the availability 
period and the detailed terms of the support under the macro-financial assistance in 
the  form  of  loans,  including  in  relation  to  the  internal  control  systems.  The  loans 
shall  be  granted  at  terms  that  allow  Jordan  to  repay  the  loan  over  a  long  period, 
including  a  possible  grace  period.  The  maximum  duration  of  each  disbursement  of 
the loans shall be 35 years from the date of disbursment.  

The  Commission  shall  inform  the  European  Parliament  and  the  Council  of 
developments in the operations referred to in paragraphs 1 and 2. 

Article 6 

The  Union’s  macro-financial  assistance  shall  be  implemented  in  accordance  with 
Regulation (EU, Euratom) 2024/250917. 

The  Union’s  macro-financial  assistance  shall  be 
management. 

implemented  under  direct 

the 

implementation  of 

the 
Before 
Commission  shall  assess,  by  means  of  an  operational  assessment,  the  soundness  of 
Jordan’s financial arrangements, the administrative procedures, and the internal and 
external control mechanisms which are relevant to the assistance. 

the  Union’s  macro-financial  assistance, 

Article 7 

The  Commission  shall  be  assisted  by  a  committee.  That  committee  shall  be  a 
committee within the meaning of Regulation (EU) No 182/2011. 

Where  reference  is  made  to  this  paragraph,  Article  5  of  Regulation  (EU)  No 
182/2011 shall apply. 

Article 8 

By  30 June  of  each  year,  the  Commission  shall submit  to  the  European  Parliament 
and to the Council a report on the implementation of this Decision in the preceding 
year, including an evaluation of that implementation. The report shall: 

(a) 

(b) 

(c) 

examine  the  progress  made  in  implementing  the  Union’s  macro-financial 
assistance to Jordan; 

assess  the  economic  situation  and  prospects  of  Jordan,  as  well  as  progress 
made in implementing the economic policy and financial conditions referred to 
in Article 3(1); 

indicate the connection  between the economic policy conditions  laid down in 
the  Memorandum  of  Understanding,  Jordan’s  ongoing  economic  and  fiscal 
performance and the Commission’s decisions to release the instalments of the 
Union’s macro-financial assistance. 

2. 

3. 

1. 

2. 

3. 

1. 

2. 

1. 

17 

EN 

8 

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2. 

Not  later  than  two  years  after  the  expiry  of  the  availability  period  referred  to  in 
Article  1(6),  the  Commission  shall  submit  to  the  European  Parliament  and  to  the 
Council  an  ex-post  evaluation  report,  assessing  the  results  and  efficiency  of  the 
completed  Union’s  macro-financial  assistance  and  the  extent  to  which  it  has 
contributed to the aims of the assistance. 

Article 9 

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

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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9 

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LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT 

1. 

1.1. 

1.2. 

1.3. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3 

Title of the proposal/initiative ...................................................................................... 3 

Policy area(s) concerned .............................................................................................. 3 

Objective(s) .................................................................................................................. 3 

1.3.1.  General objective(s) ..................................................................................................... 3 

1.3.2.  Specific objective(s) ..................................................................................................... 3 

1.3.3.  Expected result(s) and impact ...................................................................................... 3 

1.3.4. 

Indicators of performance ............................................................................................ 3 

1.4. 

1.5. 

The proposal/initiative relates to: ................................................................................. 4 

Grounds for the proposal/initiative .............................................................................. 4 

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative ............................................................ 4 

1.5.2.  Added value of EU involvement (it may result from different factors, e.g. 

coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this section 'added value of EU involvement' is the value resulting 
from EU action, that is additional to the value that would have been otherwise 
created by Member States alone. ................................................................................. 4 

1.5.3.  Lessons learned from similar experiences in the past .................................................. 4 

1.5.4.  Compatibility with the multiannual financial framework and possible synergies with 
other appropriate instruments ....................................................................................... 5 

1.5.5.  Assessment of the different available financing options, including scope for 

redeployment ................................................................................................................ 5 

1.6. 

1.7. 

2. 

2.1. 

2.2. 

2.2.1. 

2.2.2. 

Duration of the proposal/initiative and of its financial impact .................................... 6 

Method(s) of budget implementation planned ............................................................. 6 

MANAGEMENT MEASURES................................................................................... 8 

Monitoring and reporting rules .................................................................................... 8 

Management and control system(s) ............................................................................. 8 

Justification of the budget implementation method(s), the funding implementation 
mechanism(s), the payment modalities and the control strategy proposed .................. 8 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them............................................................................................................ 8 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio between 

the control costs  and the value of the related funds managed), and assessment of the 
expected levels of risk of error (at payment & at closure) ........................................... 8 

2.3. 

3. 

3.1. 

Measures to prevent fraud and irregularities ................................................................ 9 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE ............ 10 

Heading(s) of the multiannual financial framework and expenditure budget line(s) 
affected ....................................................................................................................... 10 

EN 

10 

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3.2. 

Estimated financial impact of the proposal on appropriations ................................... 12 

3.2.1.  Summary of estimated impact on operational appropriations.................................... 12 

3.2.1.1.  Appropriations from voted budget ............................................................................. 12 

3.2.1.2.  Appropriations from external assigned revenues ....................................................... 17 

3.2.2.  Estimated output funded from operational appropriations......................................... 22 

3.2.3.  Summary of estimated impact on administrative appropriations ............................... 24 

3.2.3.1. Appropriations from voted budget .............................................................................. 24 

3.2.3.2.  Appropriations from external assigned revenues ....................................................... 24 

3.2.3.3.  Total appropriations ................................................................................................... 24 

3.2.4.  Estimated requirements of human resources.............................................................. 25 

3.2.4.1.  Financed from voted budget....................................................................................... 25 

3.2.4.2.  Financed from external assigned revenues ................................................................ 26 

3.2.4.3.  Total requirements of human resources ..................................................................... 26 

3.2.5.  Overview of estimated impact on digital technology-related investments ................ 28 

3.2.6.  Compatibility with the current multiannual financial framework.............................. 28 

3.2.7.  Third-party contributions ........................................................................................... 28 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

Estimated impact on revenue ..................................................................................... 29 

DIGITAL DIMENSIONS .......................................................................................... 29 

Requirements of digital relevance .............................................................................. 30 

Data ............................................................................................................................ 30 

Digital solutions ......................................................................................................... 31 

Interoperability assessment ........................................................................................ 31 

Measures to support digital implementation .............................................................. 32 

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1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative 

Proposal for a Decision of the European Parliament and of the Council on providing 
macro-financial assistance to the Hashemite Kingdom of Jordan 

1.2. 

Policy area(s) concerned  

Policy area:   Economic and Financial Affairs 

Activity:  

International economic and financial affairs 

1.3. 

Objective(s) 

1.3.1.  General objective(s) 

The  Commission's  multiannual 
proposal/initiative 

“An Economy that works for people” 

“A stronger Europe in the world” 

1.3.2. 

Specific objective(s) 

strategic  objective(s) 

targeted  by 

the 

Supporting  macro-financial  stability  and  promoting  growth-enhancing  reforms 
outside the EU, including through regular economic dialogues with key partners and 
by providing macro-financial assistance. 

1.3.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

(1)  Contribute to covering the external financing needs of Jordan in the context of 
a  significant  deterioration  of  their  external  accounts  brought  by  recent  geopolitical 
developments.  

(2)  Alleviate the partner’s budgetary financing needs. 

(3)  Support the fiscal consolidation effort and external stabilisation in the context 
of the IMF programme. 

(4)  Support  structural  reforms  aimed  at  improving  the  overall  macroeconomic 
management,  strengthening  economic  governance  and  transparency,  and  improving 
conditions for sustainable growth 

1.3.4. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

The authorities of Jordan will be required to report on a set of economic indicators to 
the Commission services on a regular basis and provide a comprehensive report on 
the  compliance  with  the  agreed  policy  conditions  ahead  of  the  disbursement  of  the 
instalments of the assistance.  

The  Commission  services  will  continue  to  monitor  public  finance  management, 
following  the  operational  assessment  of  the  financial  circuits  and  administrative 
procedures  in  Jordan.  The  EU  Delegation  will  also  provide  regular  reporting  on 
issues  relevant  for  the  monitoring  of  the  assistance.  The  Commission  services  will 

EN 

12 

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remain  in  close  contact  with  the  IMF  and  the  World  Bank  to  benefit  from  their 
insights from their ongoing activities in the respective partner. 

An annual report to the Council and European Parliament is foreseen in the proposed 
legislative decision, including an assessment of the implementation of this operation. 
An  independent  ex-post  evaluation  of  the  assistance  will  be  carried  out  within  two 
years after the expiry of the availability period. 

1.4. 

The proposal/initiative relates to:  

X a new action  
 a new action following a pilot project / preparatory action18  

 the extension of an existing action  

 a merger or redirection of one or more actions towards another/a new action 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

The  disbursement  of  the  assistance  will  be  conditional  on  the  fulfilment  of  the 
political  preconditions  and  a  satisfactory  track  record  in  the  implementation  of  the 
ongoing economic programme between Jordan and the IMF, which was approved by 
the  Board  on  10  January  2024.  In  addition,  the  Commission  shall  agree  with  the 
authorities  of  Jordan  on  specific  policy  conditions,  listed  in  a  Memorandum  of 
Understanding.  

The assistance is planned to be disbursed in three instalments. The disbursements are 
expected to take place between 2026 and 2028.  

Specific  provisions  on  the  prevention  of  fraud  and  other  irregularities,  consistent  with  the 
Financial Regulation, are applicable.1.5.2. Added  value  of  EU  involvement  (it  may 
result  from  different  factors,  e.g.  coordination  gains,  legal  certainty,  greater 
effectiveness or complementarities). For the purposes of this section 'added value of 
EU involvement' is the value resulting from EU action, that is additional to the value 
that would have been otherwise created by Member States alone. 

The instrument of macro-financial assistance is a policy-based instrument directed to 
alleviate  short-  and  medium-term  external  financial  needs.  In  the  context  of  the 
ongoing regional crisis, MFA will help to provide economic and fiscal policy space 
for the authorities to mount an effective economic response to the crisis by helping 
the  partner  country  overcome  the  economic  difficulties  amplified  by  the  recent 
geopolitical  developments  and  in  particular  the  war  in  the  Middle  East  and  the 
consequent  Red  Sea  crisis.  The  proposed  MFA  will  contribute  to  promoting 
macroeconomic and political stability in the partner country. MFA will complement 
the  resources  made  available  by  international  financial  institutions,  bilateral  donors 
and  other  EU  financial  institutions.  In  doing  so,  it  will  contribute  to  the  overall 
effectiveness  of  the  financial  support  provided  by  the  international  community,  as 
well as of other EU financial assistance, including budget support operations. 

18 

As referred to in Article 58(2), point (a) or (b) of the Financial Regulation. 

EN 

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Furthermore, by providing long-term financing in highly concessional terms, usually 
at more favorable terms   than the rest of international or bilateral donors, the MFA 
programme is  expected to help  the government  to execute its budget  without fiscal 
deviations and to contribute to debt sustainability. 

In  addition  to  the  financial  impact  of  the  MFA,  the  proposed  programme  will 
strengthen the government’s reform commitment. This result will be achieved, inter 
alia, through appropriate conditionality for the disbursement of the assistance.  

1.5.3.  Lessons learned from similar experiences in the past 

Macro-financial  assistance  operations  in  partner  countries  are  subject  to  ex-post 
evaluation.  Evaluations  conducted  thus  far  (on  completed  MFA  programmes) 
conclude  that  MFA  operations  do  contribute,  albeit  sometimes  modestly  and 
indirectly,  to  the  improvement  of  the  external  sustainability,  the  macroeconomic 
stability  and  the  achievement  of  structural  reforms  in  the  partner  country.  In  most 
cases,  MFA  operations  had  a  positive  effect  on  the  balance  of  payments  of  the 
partner  country  and  helped  to  relax  their  budgetary  constraints.  They  also  led  to 
somewhat higher economic growth.  

1.5.4.  Compatibility with the multiannual financial framework and possible synergies with 

other appropriate instruments 

Compatibility with the Multiannual Financial Framework 

In the 2021-2027 Multiannual Financial Framework, the provisioning of MFA loans 
is covered by the External Action Guarantee within Global Europe (Neighbourhood, 
Development and International Cooperation Instrument).  

Possible synergies with other appropriate instruments 

The EU is among the major donors to Jordan, supporting its economic, structural and 
institutional reforms as well as civil society. In this context, MFA complements other 
EU  external  actions  or  instruments  used  to  support  Jordan.  The  policy  measures 
associated with MFA cover selected provisions related to the Association Agreement 
and the EU Jordan Partnership Priorities. 

The key value added of the MFA in comparison to other EU instruments would be to 
help create a stable macroeconomic framework, including by promoting a sustainable 
balance-of-payments  and  budgetary  situation,  and  an  appropriate  framework  for 
advancing structural reforms. MFA does not provide regular financial support and is 
to  be  discontinued  as  soon  as  the  country's  external  financial  situation  has  been 
brought back onto a sustainable path. 

MFA would also  be complementary to  interventions envisaged by the international 
community,  in  particular  the  adjustment  and  reform  programmes  supported  by  the 
IMF and the World Bank.  

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

By  using  loans,  this  MFA  operation  increases  the  effectiveness  of  the  EU  budget 
through the leverage effect and provides for the best cost-efficient option.  

The  Commission  is  empowered  to  borrow  funds  from  capital  markets  on  behalf  of 
both  the  European  Union  and  Euratom  using  the  guarantee  of  the  EU  budget.  The 

EN 

14 

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aim is to obtain funds from the market at the best available rates thanks to the EU’s 
triple A rating.  

1.6. 

Duration of the proposal/initiative and of its financial impact 

X limited duration  

–  in  effect  for  2.5  years  from  the  entry  into  force  of  the  Memorandum  of 

Understanding, as stated in Article (1.4) of the proposal for a Decision.  

–  Financial  impact  in  2027  both  for  commitment  appropriations  and  payment 

appropriations.  

1.7.  Method(s) of budget implementation planned  

X Direct management by the Commission 

X by its departments, including by its staff in the Union delegations;  

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

The  actions  to  be  financed  under  this  Decision  will  be  implemented  under  direct 
management  by  the  Commission  from  headquarters  and  with  support  of  the  Union 
delegations.  

This assistance is of macroeconomic nature and its design is consistent with the IMF-
supported programme. The monitoring of the action by the Commission services will 
take  place  on  the  basis  of  progress  in  the  implementation  of  the  IMF  arrangement 
and the implementation of specific reform measures to be agreed with the authorities 
of  the  partners  in  a  Memorandum  of  Understanding  with  a  frequency  that  is 
consistent with the number of instalments (See also point 1.3.4). 

2.2.  Management and control system(s)  

2.2.1. 

Justification  of  the  budget  implementation  method(s),  the  funding  implementation 
mechanism(s), the payment modalities and the control strategy proposed 

The  actions  to  be  financed  under  this  Decision  will  be  implemented  under  direct 
management  by  the  Commission  from  headquarters  and  with  support  of  the  Union 
delegations.  

MFA disbursements are dependent on successful reviews, and tied to the fulfilment 
of  conditionality  attached  to  each  operation.  The  implementation  of  conditions  is 
closely  monitored  by  the  Commission,  in  close  coordination  with  the  Union 
delegations. 

2.2.2. 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

Risks identified 

There  are  fiduciary,  policy  and  political  risks  related  to  the  proposed  MFA 
operations.  

There  is  a  risk  that  the  MFA  could  be  used  in  a  fraudulent  way.  As  MFA  is  not 
designated to specific expenses (contrary to project financing, for example), this risk 
is  related  to  factors  such  as  the  general  quality  of  management  systems  in  the 
partner’s  Central  Bank  and  the  Ministry  of  Finance,  administrative  procedures, 

EN 

15 

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control and oversight functions, the security of IT systems and the appropriateness of 
internal and external audit capabilities. 

A  second  risk  stems  from  the  possibility  that  the  partner  will  fail  to  service  the 
financial liabilities towards the EU stemming from the proposed MFA loans (default 
or  credit  risk),  which  could  be  caused  for  example  by  a  significant  additional 
deterioration of the balance of payments and fiscal position of the partner. 

Internal control systems 

The  macro-financial  assistance  will  be  liable  to  verification,  control  and  auditing 
procedures under the responsibility of the Commission, including the European Anti-
Fraud Office (OLAF), and by the European Court of Auditors as foreseen by Article 
129 of the Financial Regulation. 

Ex-ante:  Commission  assessment  of  management  and  control  system  in  the 
beneficiary country. For each beneficiary country, an ex-ante operational assessment 
of the financial circuits and control environment is carried out by the Commission, if 
necessary,  with  technical  support  from  consultants.  An  analysis  of  accounting 
procedures, segregation of duties and internal/external audit of the Central Bank and 
the Ministry of Finance are carried out to ensure a reasonable level of assurance for 
sound  financial  management.  Should  weaknesses  be  identified,  they  are  translated 
into  conditions,  which  have  to  be  implemented  before  the  disbursement  of  the 
assistance. Also, when needed, specific arrangements for payments (e.g. ring-fenced 
accounts) are put in place. 

During  implementation:  Commission  checks  of  periodic  partner  declarations.  The 
payment is subject to (1) monitoring by DG ECFIN staff, in close coordination with 
the  EU  delegations  and  with  the  external  stakeholders,  like  the  IMF,  of  the 
implementation of the agreed conditionalities, and (2) the normal control procedure 
provided  for  by  the  financial  circuit  (model  2)  used  in  DG  ECFIN,  including  the 
verification  by  the  financial  unit  of  the  fulfilment  of  conditions  attached  to  the 
disbursement of the assistance mentioned above. The disbursement relating to MFA 
operations may be subject to additional independent ex-post (documentary and/or on-
the-spot)  verifications  by  officials  of  the  ex-post  control  team  of  the  DG.  Such 
verifications  may  also  be  initiated  at  the  request  of  the  responsible  AOSD. 
Interruptions  and  suspensions  of  payments,  financial  corrections  (implemented  by 
Commission), and recoveries may be practised where needed (it has not occurred so 
far), and are explicitly foreseen in the financing agreements with the partners. 

2.2.3.  Estimation  and  justification  of  the  cost-effectiveness  of  the  controls  (ratio  between 
the control costs  and the value of the related funds managed), and assessment of the 
expected levels of risk of error (at payment & at closure) 

The control systems in place, such as the ex-ante operational assessments or the ex-
post assessments, ensured an effective error rate for the MFA payments of 0%. There 
are no known  cases of  fraud, corruption or illegal  activity. MFA operations have  a 
clear  intervention  logic,  one  that  allows  the  Commission  to  evaluate  their  impact. 
The  controls  enable  the  confirmation  of  assurance  and  of  attainment  of  policy 
objectives and priorities. 

2.3.  Measures to prevent fraud and irregularities  

To mitigate the risks of fraudulent use several measures have been and will be taken:  

EN 

16 

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First,  the  Loan  Agreement  will  comprise  a  set  of  provisions  on  inspection,  fraud 
prevention, audits and recovery of funds in case of fraud or corruption. It is further 
envisaged  that  a  number  of  specific  policy  conditions  will  be  attached  to  the 
assistance,  including  in  the  area  of  public  finance  management,  with  a  view  to 
strengthening  efficiency,  transparency  and  accountability.  Also,  the  assistance  will 
be paid to a specific account of the central bank of the partner. 

Finally, the assistance will be liable to verification, control and auditing procedures 
under  the  responsibility  of  the  Commission,  including  the  European  Anti-Fraud 
Office (OLAF), and the European Court of Auditors as foreseen by Article 129 of the 
Financial Regulation. 

3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

•  Existing budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of 
expenditure 

Contribution  

Heading of 
multiannual 
financial 
framework 

Number  

Diff./Non-
diff.19 

from 
EFTA 
countries
20 

from 
candidate 
countries 
and 
potential 
candidates
21 

From 
other 
third 
countries 

other assigned 
revenue 

14.02.01.70  NDICI  —  Global  Europe  — 
Provisioning  of  the  common  provisioning 
fund [MFA loans – EAG]  

Diff. 

NO 

NO 

NO 

NO 

•  New budget lines requested – not applicable 

19 
20 
21 

Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidates from the Western Balkans. 

EN 

17 

  EN 

 
 
 
3.2. 

Estimated financial impact of the proposal on appropriations  

3.2.1. 

Summary of estimated impact on operational appropriations  

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

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

3.2.1.1.  Appropriations from voted budget 

Heading of multiannual financial framework  

6 

Heading 6 - 'Neighbourhood and the World' 

DG ECFIN 

Operational appropriations  
Budget line 
14.02.01.70 NDICI — Global Europe — Provisioning of the common provisioning fund [MFA loans 
– EAG] 

Commitments 

Payments 

(1a) 

(2a) 

Appropriations of an administrative nature financed from the envelope of specific programmes  

EUR million (to three decimal places) 

Ye
ar 
20
24 

Ye
ar 
20
25 

Year 

2026 

Ye
ar 
20
27 

TOTA
L MFF 
2021-
2027 

   45  

   45  

45 

45 

Budget line 
14.20.03.01 

TOTAL appropriations 
for DG ECFIN 

Commitments 
and 
payments   

(3) 

Commitments 

=1a+1b+3 

Payments 

=2a+2b+3 

0.1

45.
1 
45.
1 

0.1 

45.1 

45.1 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

TOTAL 

operational 

appropriations  

Commitments 

(4) 

45 

45 

EN 

18 

EN 

 
 
 
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
 
 
 
 
 
 
  
 
 
 
45 

0.1 

45.1 

45.1 

Year 

2027 

45 

0.1 

45.1 

45.1 

TOTAL MFF 
2021-2027 

Year 

2024 

Year 

2025 

Year 

2026 

Payments 

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

TOTAL appropriations under HEADING  6  Commitments 

of the multiannual financial framework 

Payments 

•  TOTAL  operational  appropriations 
operational headings) 

(all 

Commitments 

Payments 

•  TOTAL  appropriations  of  an  administrative  nature  financed 
from  the  envelope  for  specific  programmes  (all  operational 
headings) 

TOTAL appropriations Under          

Heading 1 to 6 

Commitments 

of the multiannual financial framework 
(Reference amount) 

Payments 

(5) 

(6) 

=4+6 

=5+6 

(4) 

(5) 

(6) 

=4+6 

=5+6 

Heading of multiannual financial  framework  

7 

‘Administrative expenditure’ 

DG: <…….> 

 Human resources  
 Other administrative expenditure  
TOTAL DG <…….> 

Appropriations  

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 
MFF 2021-
2027 

EN 

19 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DG: <…….> 

 Human resources  
 Other administrative expenditure  
TOTAL DG <…….> 

Appropriations  

TOTAL appropriations under HEADING 7 of the multiannual financial 
framework  

(Total 
commitments 
= Total 
payments) 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 
MFF 2021-
2027 

TOTAL appropriations under HEADINGS 1 to 7 

Commitments 

of the multiannual financial framework  

Payments 

TOTAL operational appropriations 

Commitments 

Payments 

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

TOTAL appropriations under 
HEADING 6 

Commitments 

of the multiannual financial framework 

Payments 

(4) 

(5) 

(6) 

=4+6 

=5+6 

EUR million (to three decimal places) 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

45 

45 

0.1 

45.1 

45.1 

45 

45 

0.1 

45.1 

45.1 

EN 

20 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
  
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.2.  Estimated output funded from operational appropriations (not to be completed for decentralised agencies) 

Commitment appropriations in EUR million (to three decimal places) 

Year  
2025 

Year  
2026 

Year  
2027 

TOTAL 

Indicate objectives and 
outputs  

 

Type22 

Average cost 

o
N

Cost 

o
N

Cost 

o
N

Cost 

Total No 

Total cost 

SPECIFIC OBJECTIVE No 123… 

- Output 1 

Provisioning of the 
External Action 
Guarantee 

- Output 2 

Ex-post evaluation 

Subtotal for specific objective No 1 

SPECIFIC OBJECTIVE No 2 ... 

- Output 

Subtotal for specific objective No 2 

1 

45 

1 

2 

0.1 

45.1 

1 

1 

2 

45.1 

0.1 

45.1 

TOTALS 

2 

45.1 

2 

45.1 

22 
23 

Outputs are products and services to be supplied (e.g. number of student exchanges financed, number of km of roads built, etc.). 
As described in Section 1.3.2. ‘Specific objective(s)’  

EN 

21 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.3. 

Summary of estimated impact on administrative appropriations  

–  X The  proposal/initiative  does  not  require  the  use  of  appropriations  of  an 

administrative nature  

–    The proposal/initiative requires the use of appropriations of an administrative 

nature, as explained below 

3.2.3.1. Appropriations from voted budget 

VOTED APPROPRIATIONS 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 
2021 - 2027 

HEADING 7 

Human resources  

Other administrative expenditure  

Subtotal HEADING 7 

Outside HEADING 7 

Human resources  

Other expenditure of an administrative nature 

Subtotal outside HEADING 7 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

TOTAL 

0.000 

0.000 

0.000 

0.000 

0.000 

The  appropriations  required  for  human  resources  and  other  expenditure  of  an  administrative  nature 
will  be  met  by  appropriations  from  the  DG  that  are  already  assigned  to  management  of  the  action 
and/or  have  been  redeployed  within  the  DG,  together,  if  necessary,  with  any  additional  allocation 
which may be granted to the managing DG under the annual allocation procedure and in the light of 
budgetary constraints. 

3.2.4.  Estimated requirements of human resources  

–  X  The proposal/initiative does not require the use of human resources  

–    The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below 

3.2.4.1.  Financed from voted budget 

Estimate to be expressed in full-time equivalent units (FTEs) 

VOTED APPROPRIATIONS 

20 01 02 01 (Headquarters and Commission’s Representation Offices) 

20 01 02 03 (EU Delegations) 

01 01 01 01 (Indirect research) 

01 01 01 11 (Direct research) 

Other budget lines (specify) 

20 02 01 (AC, END from the ‘global envelope’) 

20 02 03 (AC, AL, END and JPD in the EU Delegations) 

Admin. Support line 
[XX.01.YY.YY] 

- at Headquarters 

- in EU Delegations  

01 01 01 02 (AC, END - Indirect research) 

Year 

2025 

Year 

2026 

Year 

2027 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

EN 

22 

  EN 

 
  
 
 01 01 01 12 (AC, END - Direct research) 

Other budget lines (specify) - Heading 7 

Other budget lines (specify) - Outside Heading 7 

TOTAL 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

The staff required to implement the proposal (in FTEs):  

To be covered by 
current staff 
available in the 
Commission 
services  

Exceptional additional staff* 

To be financed 
under Heading 7 
or Research 

To be financed 
from BA line 

To be financed 
from fees 

N/A 

Establishment 
plan posts 

4 

staff 
External 
(CA, SNEs, INT) 

Description of tasks to be carried out by: 

Officials and temporary staff 

External staff 

3.2.6.  Compatibility with the current multiannual financial framework  

The proposal/initiative: 

–  X  can be fully financed through redeployment within the relevant heading of the 

multiannual financial framework (MFF) 

–    requires use of the unallocated margin under the relevant heading of the MFF 

and/or use of the special instruments as defined in the MFF Regulation 

–    requires a revision of the MFF 

3.2.7.  Third-party contributions  

The proposal/initiative: 

–  X  does not provide for co-financing by third parties 

–    provides for the co-financing by third parties estimated below: 

Appropriations in EUR million (to three decimal places) 

Year  
2024 

Year  
2025 

Year  
2026 

Year  
2027 

Total 

Specify the co-financing body  

TOTAL appropriations co-
financed  

EN 

23 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.3. 

Estimated impact on revenue  

–  X  The proposal/initiative has no financial impact on revenue. 

–    The proposal/initiative has the following financial impact: 

–   on own resources  

–   on other revenue 

–   please indicate, if the revenue is assigned to expenditure lines 

Appropriations 
available for the 
current financial 
year 

     EUR million (to three decimal places) 

Impact of the proposal/initiative24 

Year 2024 

Year 2025  Year 2026 

Year 2027 

Budget revenue line: 

Article …………. 

4. 

DIGITAL DIMENSIONS 

Not applicable to this policy initiative. 

4.1. 

Requirements of digital relevance 

N/A 

4.2. 

Data 

N/A 

4.3. 

Digital solutions 

N/A 

4.4. 

Interoperability assessment 

N/A 

4.5.  Measures to support digital implementation 

N/A 

24 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 20% for collection costs. 

EN 

24 

  EN