CELEX: 52013PC0242
Language: en
Date: 2013-04-29
Title: Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL providing macro-financial assistance to the Hashemite Kingdom of Jordan

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		52013PC0242
		
			Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL providing macro-financial assistance to the Hashemite Kingdom of Jordan /* COM/2013/0242 final - 2013/0128 (COD) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
·      Grounds for and objectives of the proposal 
Since early
2011, Jordan's economy has been significantly affected by the domestic events
related to the Arab Spring and the ongoing regional unrest, notably in
neighbouring Egypt and Syria. Combined with a weaker global environment, the
political transition of Jordan has taken a heavy toll on external receipts and
has strained public finances. Lower tourism and FDI inflows, higher
international energy prices and the repeated disruptions to the flow of natural
gas from Egypt, which forced Jordan to replace gas imports from Egypt with more expensive fuels for electricity generation, have put a drag on growth and
have resulted in a marked deterioration in the balance of payments and fiscal
position. Jordan has also been affected by the intensification of the Syria crisis, notably through the inflow of refugees and its fiscal implications. While Jordan has so far managed to date to maintain macroeconomic stability, including through
substantial fiscal consolidation efforts and financial support from foreign
donors, there are significant balance of payments and financing needs. 
Under the
pressure of a sharp drop of international reserves in the first half of 2012, the
Jordanian authorities have agreed on a USD 2 bn (800% of quota),
36-month Stand-By Arrangement (SBA) with the IMF, approved in August
2012. 
In view of the
worsening economic situation and outlook, the Jordanian government requested
Macro-Financial Assistance (MFA) from the EU in the amount of EUR
200 mn in December 2012. The Commission intends to submit to the European
Parliament and the Council a proposal for MFA to the benefit of the Hashemite
Kingdom of Jordan amounting to a maximum of EUR 180 mn in the form of a medium
term loan. The proposed legal base is Article 212 of the TFEU. 
The EU's MFA
would contribute towards covering Jordan's residual external financing needs in
2013 and 2014, in the context of the IMF programme. The MFA would help Jordan address the lingering economic consequences of the Arab Spring and the external
shocks of its energy sector. It would reduce the economy's short-term
balance of payments and fiscal vulnerabilities, while supporting the adjustment
and reform programmes agreed with the IMF and the World Bank, as well as the
reforms agreed under the EU's budgetary support operations (including the Good
Governance and Development Contract operation of EUR 40 mn financed by
the Support for Partnership Reform and Inclusive Growth
(SPRING) programme).
The proposed assistance would promote
policy measures to improve public financial management and tax reform while
strengthening the social safety net (including through a better targeting of
the cash transfers system put in place last November to compensate households
for the reform of the energy subsidy system); measures to improve the
regulatory framework and climate for investment; and reforms to reduce
unemployment and encourage participation in the labour market, notably among
women. 
The proposed
MFA is consistent with the political and financial pledges made by the EU to
the Jordanian authorities at the EU-Jordan Task Force meeting in February 2012.
It is also in line with the aims of the new partnership for the South Mediterranean region proposed at the G8 Deauville summit and the orientations of the
new European Neighbourhood Policy. In the same vein, it would signal to the
other countries in the region that the EU is ready to support countries like Jordan, embarking on political reforms, in moments of economic difficulties.
In this
context, the Commission considers that the political and economic
pre-conditions for a MFA operation of the proposed amount and nature are
satisfied.
·      General context
Jordan has faced worsening economic conditions since 2011 due to the
regional and political turmoil associated with the Arab Spring and the weaker
regional and global economic environment. These
circumstances negatively affected two of the main external drivers of economic
growth, namely tourism receipts and foreign direct investment (FDI). In
addition, the frequent interruption of gas supplies from Egypt has forced the government to replace gas with more expensive oil imports, which has
increased the import bill significantly[1].
These adverse external shocks have contributed to create large fiscal and
external imbalances. 
In this
context, and following a period of robust economic growth averaging 6.5% during
2000-2009, partly reflecting a propitious external environment, GDP growth dropped sharply to 2.6% in 2011. GDP growth picked up
moderately to 2.9% in the first half of 2012, following
a recovery of tourism receipts and despite the weak performance of the mining
and construction sectors. In 2013, GDP growth is projected to be supported by increased FDIs in the energy and banking sectors but remain relatively low (at about 3%).
Consumer price inflation increased moderately in the course of 2012, reaching an average of
4.8%, compared to 4.5% in 2011, as the impact of domestic fuel and electricity
tariff increases was partially offset by that of weaker domestic demand.
Inflation is expected to rise further to 6.1% on average in 2013, partly as a
result of the foreseen energy price adjustments. Since mid-2011, monetary
policy has been tightened in order to preserve the attractiveness of
JOD-denominated assets. The current fixed exchange rate
policy (peg to the USD) has helped anchor inflation expectations.
The external position has worsened markedly
since the beginning of 2011 due to the aforementioned shocks. The current account deficit (including grants) reached 12% of GDP in
2011 (19% of GDP excluding grants), up from 7.1% of GDP in 2010 (11.3% of GDP
excluding grants), partly due to a 16.6% increase in the import bill. By the
end of 2012, it had widened further to 17% of GDP (20.6% of GDP excluding grants), despite a 15.3% increase in tourism receipts (broadly attributed to tourist
flows from Arab countries) and a 3.5% increase of
remittances. The projection is, however, that the current account deficit
excluding grants will narrow down to 12.1% in 2013 in view of stronger export
growth and a gradual normalisation of gas supplies from Egypt. The shortfall in FDI in 2011-2012 further deteriorated the
external position. Financing needs for 2011-12 were largely met through foreign
assistance, in particular form the Gulf Cooperation Council (GCC) countries and
the Bretton Woods institutions, and the mobilisation of international reserves,
which fell by 14% (to USD 10.7 billion) in 2011 and more dramatically
throughout 2012, to reach USD 5.2 billion (just above 3
months of imports) by the end of the year.
Public finances have been under strain due
to the social expenditure packages adopted in 2011, the budgetary impact of the
increase in energy import prices and the economic slowdown. The budget deficit
excluding grants increased from 7.7% of GDP in 2010 to 11.7% in 2011, while
public debt had risen to 70.7% of GDP by end-2011 (from 67.1% of GDP at
end-2010). Although the 2012
budget adopted in February envisaged a large fiscal adjustment compared to
2011, by mid-year it had become clear that this could no longer be possible,
reflecting much higher than assumed fuel subsidies, a higher wage bill due to
the reform of the civil service, higher pension and health outlays, and
spending on housing and medical assistance for Syrian refugees[2]. To
mitigate debt sustainability and possible shortfalls in external flows, the
government decided in May 2012 to take additional fiscal measures, amounting to
3.4% of GDP. The aim was to lower the overall deficit
in 2012 by approximately 1.5 percentage points of GDP (to 10.7% of GDP,
excluding grants). 
On the expenditure
side, fiscal consolidation measures (amounting to 2.9% of GDP) included: the
removal of subsidies on gasoline octane 95, jet fuel and heavy fuel oil; a 13%
decrease in the subsidy for gasoline octane 90; a 6% increase in the price of
diesel; as well cuts in capital spending and current expenditure. On the revenue side, the consolidation effort amounted to 0.4% of
GDP and included, inter alia, the introduction of a
sales tax on cellular phones and air conditions; the increase in the taxes on
cars, air tickets and alcoholic and tobacco products; and the removal of
certain tax exemptions. 
In early September
2012, the government took the decision to introduce a 6% tax on diesel and to
remove subsidies from gasoline octane 90. However, this decision, which is a
structural benchmark of the IMF programme, was initially suspended by the King.
The liberalization of gasoline octane 90 finally took place in mid-November
(together with the lifting of subsidies on diesel, kerosene, and household gas
prices), in full alignment with the price adjustment structural benchmark set
by the IMF program. Although these measures led to serious social protests in
mid-November, the government maintained the fuel price adjustments. 
As underlined at the Joint Dialogue on
Economic Reforms conducted by the Commission with the Jordanian authorities
last October, Jordan has made significant progress in a number of key reform
areas. This includes the adjustment of energy prices, plans to diversify the
energy supply, measures to raise women's participation in the labour force,
schemes to support SMEs access to finance, and the submission to parliament of
legislative proposals on income taxation, PPPs and social security reform. However,
substantial structural reform challenges have yet to be addressed. Moreover,
many legislative proposals remain stuck in parliament and the dissolution of
the parliament and organisation of parliamentary elections held at end-January
2013 further delayed their adoption. 
On 3 August 2012, the IMF Board approved,
as noted, a USD 2 bn (800% of quota) 36-month Stand-By Arrangement (SBA) for Jordan. The programme is relatively frontloaded, with 300% of quota (out of the total of
800%) paid out in the first two tranches (the second tranche is to be disbursed
upon completion of the first programme review). The program envisages a package
of measures aimed at strengthening growth while reducing vulnerability to
exogenous shocks, notably by reforming the energy subsidies system, bringing
NEPCO back to cost recovery and promoting energy supply diversification. The
program further foresees consolidating the fiscal sector through an effective
rationalization of the tax system, improved tax administration and cuts in
expenditure. For 2013, substantial additional fiscal adjustment measures are
planned, including increases in diesel and kerosene prices, reductions in tax
exemptions and, possibly, increases in excise taxes, with the aim of cutting
the fiscal deficit excluding grants to 9.3% of GDP for that year (5.5%
including grants). 
Based on the latest available IMF
projections, the external financing gap for the IMF programme period
(2013-2015) is estimated at USD 5.9 billion, essentially reflecting a sizeable
(although declining overtime) current account deficit and the need to rebuild
official foreign exchange reserves With reserves already at a critically low
level at the end of 2012 (just above the minimum benchmark of 3 months of
imports, as noted), and Jordan's balance of payments remaining very vulnerable
to external shocks, notably further disruptions in gas supplies from Egypt and
political developments in the region, the IMF programme aims at a considerable
replenishment of official reserves. Net of disbursements under the SBA and the
World Bank's Development Policy Loan (DPL), Jordan faces a residual external
financing gap of USD 4.1 billion over these three years to be covered by other
donors (GCC countries, US, EU, France, and Japan). The proposed MFA from the EU would correspond to about 4.4% of the
residual external financing gap.
·      Existing provisions in the area of the proposal
None
·      Consistency with the other policies and objectives of the Union
The EU has for long had an interest to
engage with Jordan, acknowledging Jordan's stabilizing role in the region as well as its mutual economic and
financial links. The contractual relations between the
EU and Jordan are framed by the Association Agreement in
May 2002, which liberalizes trade between the two parties and foresees the
strengthening of our bilateral political dialogue and economic cooperation.
Bilateral relations have been further reinforced under the EU's European
Neighbourhood Policy (ENP), including through the adoption of a five-year ENP
Action Plan in 2005, replaced by a new 5-year Action Plan in 2010, which
identifies key reform measures in both the political and economic spheres and
promotes Jordan's regulatory convergence with the EU. Moreover, Jordan is the first Mediterranean partner country with whom the EU has concluded technical
negotiations leading to an "Advanced Status". It is also a member of
the Union for the Mediterranean. Economic ties with the EU are also important. In 2011, the EU was Jordan's first source of imports (20.1%),
although it was only the seventh destination of Jordan's exports. And the EU has offered to Jordan, as noted, the negotiation of DCFTA with
the goal to increase Jordan's integration into the EU single market. 
In sum, while Jordan's road to full
democracy is not without difficulties and significant uncertainties remain, the
country has taken significant steps towards political and
economic reform and there is also a strong framework of
bilateral relations between the EU and Jordan.
Since the Arab Spring began, the EU has
declared on various occasions its commitment to support Jordan in its economic and political reform process. Indeed, the EU’s commitment to support
 Jordan’s political and economic reform was the main message of the first
EU-Jordan Task Force held in Amman in February 2012. 
The MFA proposal is consistent with the
EU's commitment to support Jordan's economic and political transition. It is
also consistent with the guidelines for the MFA, as provided by the Council
conclusions of 2002 on MFA and the accompanying letter of the Council President
to the Commission President. In particular, and as explained in more detail in
the Staff Working Document accompanying the Commission's proposal, the proposal
is consistent with the following principles: exceptional character, political
preconditions, complementarity, conditionality and financial discipline. 
The Commission will continue to monitor and
assess during the life of the MFA operation satisfaction of these criteria,
including the assessment, in close liaison with the European External Action
Service, of the political preconditions.
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
·      Consultation of interested parties
MFA is provided as an integral part of the
international support to the economic stabilisation and recovery programme of Jordan. In the preparation of this proposal for MFA, the Commission services have consulted
with the International Monetary Fund and the World Bank, which have already put
in place sizeable financing programs. The Commission consulted the EU Member
States in the Economic and Financial Committee before submitting its proposal
for MFA. The Commission has also been in regular contact with the Jordanian
authorities.
·      Collection and use of expertise
An Operational Assessment verifying the
quality and reliability of Jordan's public financial circuits and
administrative procedures will be carried out by the Commission with the
assistance of external experts.
·      Impact assessment
The 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, as agreed with the IMF. It will notably help improve the
efficiency and transparency of public finance management; promote fiscal
reforms to increase tax collections and improve the progressivity of the tax
system; support existing efforts to strengthen the social safety net; promote
labour market reforms (to reduce unemployment and raise participation rates,
notably among women); and facilitate the adoption of measures to improve the
regulatory framework for trade and investment.
3.           LEGAL ELEMENTS OF THE PROPOSAL
·      Summary of the proposed action
The European Union shall make MFA available
to Jordan for a total maximum amount of EUR 180 million, provided in the form
of a medium term loan. The assistance will contribute to cover Jordan's residual external financing needs in 2013-14, as identified by the Commission
based on the estimates of the IMF. 
The assistance is planned to be disbursed
in two loan instalments and to allow some frontloading given the urgency of the
financing needs. The disbursement of the first instalment is expected to take
place in the second half of 2013. The second instalment, conditional on a
number of policy measures, could be disbursed in the first half of 2014. 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. 
As usual with the MFA instrument, the
disbursements would be conditional on successful programme reviews under the
IMF's financial arrangement (the SBA). In addition, the Commission and the
Jordanian authorities would agree on specific structural reform measures in a
Memorandum of Understanding. The Commission will target structural reforms
aimed at improving the overall macroeconomic management and the conditions for
sustainable growth (e.g. targeting the transparency and efficiency of public
finance management; fiscal reforms; reforms to strengthen the social safety
net; labour market reforms; and reforms to improve the regulatory framework for
trade and investment).
The decision to disburse the full MFA in the form of loans is
justified by Jordan's level of development (as measured by its per-capita
income) and debt indicators. It is also consistent with the treatment given to Jordan by the World Bank and the IMF. Indeed, Jordan is not eligible for concessional financing from
either the IDA or the IMF's Poverty Reduction and Growth Trust fund.
·      Legal basis
The
legal basis for this proposal is Article 212 of the TFEU. 
·      Subsidiarity principle
The proposal falls under the mixed
competence of the EU. The subsidiarity principle applies to the extent that the
objectives of restoring short-term macroeconomic stability in Jordan cannot be sufficiently achieved by the Member States alone and can therefore 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 principle
The proposal complies with the
proportionality principle: it confines itself to the minimum required in order
to achieve the objectives of short-term macro economic 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 SBA Arrangement, the amount of
the assistance corresponds to 4.4% of the residual financing gap for the period
2013-2015. This is consistent with standard rules on burden-sharing for MFA
operations. Given the assistance pledged to Jordan by other bilateral and
multilateral donors and creditors, it is deemed an appropriate level of
burden-sharing for the EU.
·      Choice of instruments
Other instruments would not be adequate
because, in the absence of a framework regulation for Macro-Financial
Assistance, ad hoc European Parliament and Council decisions under Article 212
TFEU are the only available legal instrument for this assistance.
Project finance or technical assistance
would not be suitable or sufficient to address these macroeconomic objectives.
The key value added of the MFA in comparison to other EU instruments would be
to alleviate the external financial constraint and to help create a stable
macroeconomic framework, including by promoting a sustainable balance of
payments and budgetary situation, and an appropriate framework for structural
reforms. By helping to put in place an appropriate overall framework for macroeconomic
and structural policies, MFA can increase the effectiveness of the actions
financed in Jordan under other, more narrowly focused EU financial instruments.

4.           BUDGETARY IMPLICATION
The planned assistance would be
provided in the form of a loan and should be financed through a borrowing
operation that the Commission will conduct on behalf of the EU. The budgetary
costs of the assistance will correspond to the provisioning, at a rate of 9%,
of the amounts disbursed in the guarantee fund for external lending of the EU,
from budget line 01 04 01 14 ("the provisioning of the Guarantee
Fund"). Assuming that the first loan disbursement will be made in 2013 for
the amount of EUR 100 million and the second loan disbursement in 2014 for the
amount of EUR 80 million, and according to the rules governing the guarantee
fund mechanism, the provisioning will take place in the 2015-16 budgets.
5.           OPTIONAL ELEMENTS
·      Review/revision/sunset clause
The proposal includes a sunset clause. The
proposed MFA would be made available for two years, starting from the first day
after the entry into force of the Memorandum of Understanding.
2013/0128 (COD)
Proposal for a
DECISION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL
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
thereof,
Having regard to
the proposal from the European Commission[3],

After transmission
of the draft legislative act to the national parliaments,
Acting in
accordance with the ordinary legislative procedure[4],
Whereas:
(1)       Relations between the European
Union ('the Union') and the Hashemite Kingdom of Jordan ('Jordan') are
developing within the framework of the European Neighbourhood Policy (ENP). An Association Agreement between
the European Communities and their Member States, of the one part, and Jordan, of the other part, entered into force in May 2002.
Bilateral political dialogue and economic cooperation have been further
developed within the framework of ENP Action Plans, of which the most recent
covers the period 2010-2015. In 2010, the Union granted Jordan ''Advanced Status"
partnership, implying expanded areas of
cooperation between both parties.
(2)       Jordan's economy has been
significantly affected by domestic events related to the events in the Southern
Mediterranean since the end of 2010, known as the "Arab Spring", and by
the ongoing regional unrest, notably in neighbouring Egypt and Syria. Combined with a weaker global environment, the repeated disruptions to the flow of
natural gas from Egypt, which have forced Jordan to replace gas imports from Egypt with more expensive fuels for electricity generation, and the important inflow of refugees
from Syria have resulted in important external and budgetary financial gaps.
(3)       Since the Arab Spring
began, the Union has declared on various occasions its commitment to support Jordan in its economic and political reform process. This commitment was reaffirmed in the
conclusions of the 10th meeting of the Association Council between the Union
and Jordan in December 2012. 
(4)       Jordan has embarked on a
series of political reforms, most notably leading to the adoption by the
Jordanian Parliament in September 2011 of over 40 constitutional amendments,
representing a significant step towards a fully-fledged democratic system. Political
and economic support from the Union to Jordan's reform process is consistent
with the Union's policy towards the Southern Mediterannean region, as set
out in the context of the ENP.
(5)       In August 2012, the
Jordanian authorities and the International Monetary Fund (IMF)
agreed on a three-year Stand-By-Arrangement of SDR 1,364
million in support of Jordan's economic adjustment and reform programme. 
(6)       The
Union has made available EUR 293 million in grants for the period 2011-13
under its regular cooperation programme in support of Jordan's political and economic reform
agenda. In addition, EUR 70 million has been allocated to Jordan in 2012 under the "Support for partnership, reforms and inclusive growth" (SPRING)
programme, and EUR 10 million in Union humanitarian aid to support Syrian
refugees.
(7)       In December 2012, Jordan requested macro-financial assistance from the Union in view of the worsening
economic situation and outlook.
(8)       Given that, after taking
into account macroeconomic support from the IMF and the World Bank, a residual
financing gap remains in Jordan's balance of payments, and given the vulnerability
of Jordan's external financial position to exogenous shocks, which requires
maintaining an appropriate level of the foreign exchange reserves, macro-financial
assistance is considered an appropriate response to Jordan's request under the
current exceptional circumstances. The Union macro-financial
assistance to Jordan (''the Union 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.
(9)       The Union macro-financial
assistance should not merely supplement programmes and resources from the IMF
and the World Bank, but should also ensure the added value of Union's
involvement. The Commission should ensure that the Union macro-financial
assistance is legally and substantially in line with the measures taken within
the different areas of external action and other relevant Union policies.
(10)     The specific objectives of
the Union macro-financial assistance should be to strengthen
efficiency, transparency and accountability of the public finance management
systems in Jordan and to promote structural reforms aimed
at supporting sustainable and inclusive growth, employment creation and fiscal
consolidation. These objectives should be regularly monitored by the
Commission.
(11)     The conditions underlying
the provision of the Union macro-financial assistance should reflect the key
principles and objectives of the Union’s policy towards Jordan. 
(12)     In order to ensure
efficient protection of the financial interests of the Union linked
to this macro-financial assistance, it is necessary that Jordan adopt appropriate measures relating to the prevention of, and the fight against,
fraud, corruption and any other irregularities in relation to the assistance.
It is also necessary to provide for appropriate controls by the Commission and appropriate
audits by the European Court of Auditors.
(13)     The release of the Union
macro-financial assistance should be without
prejudice to the powers of the budgetary authority. 
(14)     The assistance should be
managed by the Commission. In order to ensure that the European Parliament and
the Economic and Financial Committee 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 relevant documents.
(15)     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 Council of 16 February 2011 laying down the rules and general principles
concerning mechanisms for control by Member States of the Commission's exercise
of implementing powers[5].
The fact that the assistance is of a substantial amount and, therefore, has a
potentially important impact, justifies the use of the examination procedure,
in line with Article 2(2) of Regulation (EU) No 182/2011.
HAVE ADOPTED THIS DECISION:
Article 1
1.           The Union shall make
available to Jordan macro-financial
assistance of a maximum amount of EUR 180
million, with a view to supporting Jordan's economic stabilisation and reforms. The assistance shall contribute
to covering Jordan's balance of payments needs as identified in the current IMF
programme. 
2.           The full amount of the
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 in order to onlend them to Jordan. The loans shall have a maximum
maturity of 15 years.
3.           The release of the Union macro-financial
assistance shall be managed by the Commission in a manner consistent with the
agreements or understandings reached between the IMF and Jordan and with the key principles and
objectives of economic reforms set out in the EU-Jordan
Association Agreement and the EU-Jordan Action Plan for 2010-2015 agreed under
the European Neighbourhood Policy. The Commission shall regularly inform the European Parliament and
the Economic and Financial Committee of developments in the management of the Union
macro-financial assistance
and provide them with relevant documents.
4.           The Union macro-financial
assistance shall be made available for a period of two
years from the first day after the entry into force of the Memorandum of
Understanding referred to in Article 2(1).
Article 2
1.           The Commission, acting in
accordance with the examination procedure referred to in Article 6(2), shall be
empowered to agree with the authorities of Jordan on the economic policy and
financial conditions attached to the Union macro-financial assistance, to be
laid down in a Memorandum of Understanding which shall include a timeframe for
their fulfilment (hereafter the 'Memorandum of Understanding'). The
economic policy and financial conditions shall be consistent with the
agreements or understandings referred to in Article 1(3).
Those conditions shall aim, in particular, at strengthening the efficiency, transparency
and accountability of
public finance management systems in Jordan,
including for the use of the Union macro-financial assistance. Progress in attaining these objectives shall be regularly
monitored by the Commission. 
2.           The
detailed financial terms of the assistance shall be laid down in a Loan
Agreement to be agreed between the Commission and the authorities of Jordan. 
3.           During the implementation
of the Union macro-financial assistance, the Commission
shall monitor the soundness of Jordan's financial arrangements, the administrative procedures and the
internal and external control mechanisms which are relevant to the
assistance, as well as the adherence to the agreed timeframe.
4.           The Commission shall
verify at regular intervals that the economic policies of Jordan are in accordance with the objectives of
the Union macro-financial assistance and that the agreed economic policy
conditions are being satisfactorily fulfilled. In doing so, the Commission
shall coordinate closely with the IMF and the World Bank, and, when required,
with the Economic and Financial Committee.
Article 3
1.           Subject to the conditions set out
in paragraph 2, the Union financial assistance shall be made
available by the Commission to Jordan in two loan instalments. The size of each instalment shall be laid
down in the Memorandum of Understanding. 
2.           The Commission shall
decide on the release of the instalments subject to a satisfactory implementation
of the IMF programme and the fulfilment of the economic policy and
financial conditions agreed in the Memorandum of Understanding.
The disbursement of the second instalment shall not take place earlier than
three months after the release of the first instalment.
3.           The Union funds shall be
paid to the Central Bank of Jordan. Subject to
provisions to be agreed in the Memorandum of Understanding, including a
confirmation of residual budgetary financing needs, the Union funds may be paid to the Jordanian Ministry of Finance as the final beneficiary.
Article 4
1.           The borrowing and lending
operations related to the Union macro-financial assistance
shall be carried out in euro using the same value date and shall not expose
the Union to any risk related to transformation of maturities, any
exchange or interest rate risk, or any other commercial risk.
2.           Upon request by Jordan, the Commission shall
take the necessary steps to ensure that an early repayment clause is included
in the loan terms and conditions. The early repayment clause shall be matched
by a corresponding clause in the terms and conditions of the Commission's
borrowing operations. 
3.           Upon request by Jordan and where
circumstances permit an improvement of the interest rate of the loan, the
Commission may refinance all or part of its initial loan or restructure the
corresponding financial conditions. Refinancing or restructuring operations
shall be carried out in accordance with the conditions set out in paragraph 1
and shall not have the effect of extending the average maturity of the loan
concerned or increasing the amount of capital outstanding at the date of the
refinancing or restructuring.
4.           All costs incurred by the Union
in
relation to the borrowing and lending operations under this
Decision shall be borne by Jordan. 
5.           The Commission
shall inform the European Parliament and the Economic and
Financial Committee of developments in the operations referred to in paragraphs
2 and 3.
Article 5
1.           The Union macro-financial
assistance shall be implemented in accordance with Regulation (EU, Euratom) No
966/2012 of the European Parliament and of the Council of 25 October 2012 on
the financial rules applicable to the general budget of the Union and repealing
Council Regulation (EC, Euratom) No 1605/2002[6]
and its rules of application[7].

2.           The Memorandum of
Understanding and the Loan Agreement to be agreed with the authorities of Jordan shall provide for
appropriate measures in relation to the prevention of, and the fight against,
fraud, corruption and any other irregularities in
relation to the assistance. In order to
ensure greater transparency in the management and disbursement of funds, the
Memorandum of Understanding and the Loan Agreement shall
also provide for controls, including on-the-spot checks and inspections, to be
carried out by the Commission, including the European Anti-Fraud Office. Those
documents shall in addition provide for
audits, including where appropriate on-the-spot audits, by the Court of
Auditors.
Article 6
1.           The Commission shall be
assisted by a committee. That committee shall be a committee within the meaning
of Regulation (EU) No 182/2011.
2.           Where reference is made to
this paragraph, Article 5 of Regulation (EU) No 182/2011 shall
apply.
Article 7
1.           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 thereof. The report shall indicate the connection between the
economic policy conditions laid down in the Memorandum of Understanding, Jordan’s on-going economic and fiscal performance
and the Commission’s decisions to release the instalments of the Union
macro-financial assistance. 
2.           Not
later than two years after the expiry of the availability period referred to in
Article 1(4), the Commission shall submit to the European Parliament and to the
Council an ex post evaluation report.
Article 8
This Decision shall enter into force on the
3rd day folloiwng publication in the Official Journal of the
European Union.
Done at Brussels, 
For the European Parliament                       For
the Council
The President                                                 The
President
LEGISLATIVE FINANCIAL STATEMENT
1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE 
              1.1.    Title of the proposal/initiative 
              1.2.    Policy
area(s) concerned in the ABM/ABB structure
              1.3.    Nature
of the proposal/initiative 
              1.4.    Objectives

              1.5.    Grounds
for the proposal/initiative 
              1.6.    Duration
and financial impact 
              1.7.    Management
mode(s) envisaged 
2.           MANAGEMENT MEASURES
              2.1.    Monitoring
and reporting rules 
              2.2.    Management
and control system 
              2.3.    Measures
to prevent fraud and irregularities 
3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE 
              3.1.    Heading(s)
of the multiannual financial framework and expenditure budget line(s) affected 
              3.2.    Estimated
impact on expenditure 
              3.3.    Estimated impact on revenue
LEGISLATIVE FINANCIAL STATEMENT
1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE 
1.1.        Title of the
proposal/initiative 
Macro-financial assistance to the Hashemite
Kingdom of Jordan
1.2.        Policy area(s) concerned
in the ABM/ABB structure[8] 
Policy area:    Title 01 – Economic and
Financial Affairs
Activity:          03 – International economic
and financial affairs
1.3.        Nature of the
proposal/initiative 
X The proposal/initiative relates to a new action 
1.4.        Objectives
1.4.1.     The Commission's multiannual
strategic objective(s) targeted by the proposal/initiative 
"To promote prosperity beyond the EU"
The major area of DG ECFIN related activity
pertains to: 
1. Fostering the implementation of the European
Neighbourhood Policy by deepening economic analysis and strengthening policy
dialogue and advice on the economic aspects of the Action Plans.
2. Developing, monitoring and implementing
macro-financial assistance for partner third countries, in co-operation with
the relevant international financial institutions. 
1.4.2.     Specific objective(s) and
ABM/ABB activity(ies) concerned
Specific objective No 3: "Providing macro-financial assistance to third countries in
resolving their balance of payment crises and restoring external debt
sustainability"
ABM/ABB activity(ies) concerned: International Economic and Financial Relations, global governance. 
1.4.3.     Expected result(s) and
impact
The proposed assistance consists of an EU loan
of EUR 180 million to the Hashemite Kingdom of Jordan ('Jordan'), with a view
to contributing to a more sustainable balance of payments situation. The assistance,
to be disbursed in two instalments, will help the country overcome the economic
and social hardships endured as a result of the domestic and regional unrest.
It will also promote structural reforms aimed at raising sustainable economic
growth and improving public finance management. 
1.4.4.     Indicators of results and
impact 
The authorities will be required to report on a
set of 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 second instalment 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 that will be carried
out in preparation of this operation. The EU Delegation in Jordan will also provide regular reporting on issues relevant for the monitoring of the
assistance. The Commission services will remain in close contact with the IMF
and the World Bank to benefit from their insights from their on-going
activities in Jordan. 
An annual report to the Council and European
Parliament is foreseen in the proposed legislative decision, comprising 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 implementation period.
1.5.        Grounds for the proposal/initiative

1.5.1.     Requirement(s) to be met in
the short or long term 
The disbursement of the assistance will be
conditional upon a satisfactory track record in the implementation of the
Stand-By Arrangement (SBA) between Jordan and the IMF. In addition, the
Commission shall agree with the Jordanian authorities on specific policy
conditions, listed in a Memorandum of Understanding, to be met before the
second instalment is released by the Commission. 
1.5.2.     Added value of EU
involvement
By helping the country overcome the economic
shock caused by the domestic and regional unrest, the proposed MFA will
contribute to promoting macroeconomic stability, economic reforms and political
progress in the country. By complementing the resources made available by the
international financial institutions, the EU and other donors, it will contribute
to the overall effectiveness of the package of financial support agreed by the
international donor community in the aftermath of the crisis. 
The proposed programme will also strengthen the
government's reform commitment and its aspiration towards closer relations with
the EU. This result will be achieved, inter alia, through appropriate
conditionality for the disbursement of the assistance. In a larger context, the
programme will signal to the other countries in the region that the EU is ready
to support countries embarking on a clear path towards political reforms in times
of economic difficulties.
1.5.3.     Lessons learned from
similar experiences in the past
Since 2004, a total of fifteen ex-post
evaluations have been carried out on macro-financial assistance operations.
These evaluations 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
recipient country. In most cases, MFA operations had a positive effect on the
balance of payments of the beneficiary country and helped to relax their
budgetary constraints. They also led to a somewhat higher economic growth.
1.5.4.     Compatibility and possible
synergy with other appropriate instruments
The EU is among the major donors of Jordan. The EU has made available EUR 293 mn in grants for the
period 2011-13 under its regular cooperation, in support of Jordan's political and economic reform agenda. In
addition, EUR 70 mn has been allocated to Jordan in 2011 under the SPRING
programme, and EUR 10 mn from Humanitarian Aid to support Syrian refugees.
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 structural reforms. MFA does not
provide a regular financial support nor is meant to support the economic and
social development of the recipient countries. The MFA is to be discontinued as
soon as the country's external financial situation has been brought back into a
sustainable path. Afterwards, regular EU cooperation assistance instruments are
meant to take over.
MFA is also meant to be complementary to
interventions by the international financial institutions, in particular the
adjustment and reform programme supported by the IMF's SBA and the Development
Policy Loan of the World Bank.
1.6.        Duration and financial
impact 
X Proposal/initiative of limited
duration 
X Proposal/initiative in effect for 2 years
from the entry into force of the Memorandum of Understanding, as stated in
Article (1.4) of the Decision 
X Financial impact from 2013 to 2016 
1.7.        Management mode(s)
envisaged[9] 
X Centralised direct management by the
Commission 
2.           MANAGEMENT MEASURES 
2.1.        Monitoring and reporting
rules 
This assistance is of macroeconomic nature and
its design is consistent with the IMF-supported economic programme. The
monitoring of the action by the Commission services will take place on the
basis of progress in the implementation of the SBA and specific reform measures
to be agreed with the Jordanian authorities in a Memorandum of Understanding
(see also point 1.4.4). 
2.2.        Management and control
system 
2.2.1.     Risk(s) identified 
There are fiduciary, policy and political risks
related to the proposed MFA operation. 
There is a risk that the macro-financial
assistance, which is not dedicated to specific expenses, could be used in a
fraudulent way. In general terms, this risk is related to factors such as the
quality of management systems in the central bank and the ministry of finance and
the appropriatedness of internal and external audit capabilities. 
Another key risk to the operation stems from
the regional economic and political uncertainty, notably in Syria, which has direct implications for the Jordanian economy. On the domestic front, the
main risk is instability related to difficulties in the political and economic
reform process. The full implementation of the stabilisation and reform
measures supported by the international community, including the proposed MFA
operation, might be undermined by social dissatisfaction. 
Jordan also remains
vulnerable to possible new disruptions in the supply of imported natural gas
from Egypt. Finally, there are risks stemming from a possible weakening of the
European and global economic environment and an increase in international
energy and food prices. 
2.2.2.     Control method(s) envisaged

The macro-financial assistance will be liable
to verification, control and auditing procedures under the responsibility of
the Commission, including the European Antifraud Office (OLAF), and by the
European Court of Auditors. 
2.2.3.     Costs and benefits of
controls and probable non-compliance rate
The basic costs for the Commission related to
the methods of verification and control, as well as the cost of the Operational
Assessment of financial and administrative circuits conducted prior to the
operation, are described in Table 3.2.1. In addition, there are costs for the
European Court of Auditors and of possible interventions of the OLAF. The
Operational Assessment not only helps assess risks of misuse of the funds but,
as a collateral benefit, it provides useful information on the necessary
reforms in the area of public finance management, which are reflected in the
policy conditionality of the operation. Regarding the probable non-compliance
rate, the risk of non-compliance (in the form of non-repayment of the loan or misuse
of the funds) is judged to be low, based on the experience with the MFA
instrument since its creation. 
2.3.        Measures to prevent fraud
and irregularities 
To mitigate the risks of fraudulent use several
measures will be taken: 
First, the proposed legal basis for
macro-financial assistance to Jordan includes a provision on fraud prevention
measures. These measures will be elaborated further in the Memorandum of Understanding
and the Loan Agreement, envisaging 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, mainly in the area of public finance management, with a view
to strengthening efficiency, transparency and accountability. 
Second, before the agreement on the Memorandum
of Understanding is reached, the Commission services, with the support of duly
mandated external experts, will carry out an Operational Assessment of the
financial circuits and administrative procedures at the Ministry of Finance and
the Central Bank of Jordan, in order to fulfil the requirements of the
Financial Regulation applicable to the General Budget of the European
Communities. This review will determine
whether the framework for sound financial management of macro-financial
assistance is sufficiently effective in Jordan by covering areas such as
management structure and organisation, management and control of funds,
security of IT systems, internal and external audit capacity as well as the
independence of the central bank. In the light of this assessment, specific
mechanisms applying to the management of the funds by the beneficiaries may be
introduced in agreement with the national authorities. Also, the assistance
will be paid to a dedicated account at the Central Bank of Jordan.
Finally, the assistance will be liable to
verification, control and auditing procedures under the responsibility of the
Commission, including OLAF, and the European Court of Auditors.
3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE 
3.1.        Heading(s) of the
multiannual financial framework and expenditure budget line(s) affected 
·      Existing budget lines
01 03 02: Macro-financial assistance
01 04 01 14 – Provisioning of the Guarantee
Fund
In order of
multiannual financial framework headings and budget lines.
 Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution 
 Number [Description………………...……….] || Diff./non-diff. ([10])   || from EFTA countries[11]   || from candidate countries[12]   || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation 
 4 || 01 03 02 Macro-financial assistance || Diff. || NO || NO || NO || NO 
 4 || 01 04 01 14 Provisioning of the Guarantee Fund || Diff. || NO || NO || NO || NO 
01 04 01 04 –
European Union guarantee for EU loans raised for macro-financial assistance to
third countries: The Guarantee Fund for external actions has to be provisioned
according to the Fund Regulation, as amended. In line with this Regulation,
loans are based on the outstanding amount at the end of a year. The
provisioning amount is calculated at the beginning of the year "n" as
the difference between the target amount and the Fund's net assets at the end
of the year "n-1". This provisioning amount is introduced in the year
"n" to the "n+1" preliminary budget and effectively paid in
one transaction at the beginning of the year "n+1" from "the
provisioning of the Guarantee Fund" (budget line 01 04 01 14). As a
result, 9% (maximum of EUR 16.2 million) of the effectively disbursed amount
will be considered in the target amount at the end of the year "n-1"
for the calculation of the provisioning of the Fund.
The budget entry ("p.m.") reflecting the budget guarantee
for the loan will be activated only in the case of an effective call on the
guarantee. It is not expected that the budget guarantee be called.
¨¨New budget
lines requested: not applicable.
3.2.        Estimated impact on
expenditure 
3.2.1.     Summary of estimated impact
on expenditure 
EUR million (to three decimal places)
 Heading of multiannual financial framework: || 4 ||   || [Heading: The EU as a global partner] 
 DG: <ECFIN> ||   ||   || Year 2013[13] || Year 2014 || Year 2015 || Year 2016 || TOTAL 
  Operational appropriations ||   ||   ||   ||   ||   
 Budget line 01 04 01 14 Provisioning of the Guarantee Fund || Commitments || (1a) ||   ||   || 9 || 7.2 || 16.2 
 Payments || (2a) ||   ||   || 9 || 7.2 || 16.2 
 Appropriations of an administrative nature financed from the envelope of specific programmes[14] (operational assessment and ex-post evaluation) ||   ||   ||   ||   ||   
 Budget line 01 03 02 || Commitments || (3) || 0.05 ||   || 0.15 ||   || 0.20 
   || Payments || (3a) || 0.05 ||   || 0.05 || 0.10 || 0.20 
 TOTAL appropriations for DG ECFIN || Commitments || =1+1a +3 || 0.05 ||   || 9.15 || 7.2 || 16.4 
 Payments || =2+2a +3 || 0.05 ||   || 9.05 || 7.3 || 16.4 
  TOTAL operational appropriations || Commitments || (4) || 0.05 ||   || 9.15 || 7.2 || 16.4 
 Payments || (5) || 0.05 ||   || 9.05 || 7.3 || 16.4 
  TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) ||   ||   ||   ||   ||   
 TOTAL appropriations under HEADING 4 of the multiannual financial framework || Commitments || =4+ 6 || 0.05 ||   || 9.15 || 7.2 || 16.4 
 Payments || =5+ 6 || 0.05 ||   || 9.05 || 7.3 || 16.4 
If more than one heading is affected by the proposal /
initiative:
EUR million (to three decimal places)
 Heading of multiannual financial framework: || 5 ||   || ‘Administrative expenditure’ 
   ||   ||   || Year 2013 || Year 2014 || Year 2015 || Year 2016 || TOTAL 
 DG: <…….> || 
  Human resources || 0.040 || 0.028 || 0.021 || 0.016 || 0.105 
  Other administrative expenditure || 0.025 || 0.015 ||   ||   || 0.040 
 TOTAL DG ECFIN || Appropriations || 0.065 || 0.043 || 0.021 || 0.016 || 0.145 
 TOTAL appropriations for HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 0.065 || 0.043 || 0.021 || 0.016 || 0.145 
EUR million (to three decimal places)
   ||   ||   || Year 2013[15] || Year 2014 || Year 2015 || Year 2016 || TOTAL 
 TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 0.115 || 0.043 || 9.171 || 7.216 || 16.545 
 Payments || 0.115 || 0.043 || 9.071 || 7.316 || 16.545 
3.2.2.     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:
Commitment appropriations in EUR million (to three
decimal places)
 Indicate objectives and outputs   ò ||   ||   || Year 2013 || Year 2014 || Year 2015 || Year 2016 || TOTAL || 
 ||
 Type[16]   || Average cost || Number || Cost || Number || Cost || Number || Cost || Number || Cost || Total number || Total cost ||
 SPECIFIC OBJECTIVE NO 3[17] ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || 
 - Output 1 || Operational assessment ||   || 1 || 0.05 ||   ||   ||   ||   ||   ||   || 1 || 0.05 ||
 - Output 2 || Ex-post evaluation ||   ||   ||   ||   ||   || 1 || 0.15 ||   ||   || 1 || 0.15 ||
 - Output 3 || Provisioning of the Guarantee Fund ||   ||   ||   ||   ||   || 1 || 9 || 1 || 7.2 || 2 || 16.2 ||
 Subtotal for specific objective No 1 || 1 || 0.05 ||   ||   || 2 || 10.5 || 1 || 7.2 || 4 || 17.75 || 
 TOTAL COST || 1 || 0.05 ||   ||   || 2 || 10.5 || 1 || 7.2 || 4 || 17.75 || 
3.2.3.     Estimated impact on
appropriations of an administrative nature
3.2.3.1.  Summary 
–     
¨  The proposal/initiative does not require the use of appropriations
of an administrative nature 
–     
X The proposal/initiative requires the use of
appropriations of an administrative nature, as explained below:
EUR million (to
three decimal places)
   || Year 2013[18]   || Year 2014 || Year 2015 || Year 2016 || Enter as many years as necessary to show the duration of the impact (see point 1.6) || TOTAL 
 HEADING 5 of the multiannual financial framework ||   ||   ||   ||   ||   ||   ||   ||   
 Human resources || 0.040 || 0.028 || 0.021 || 0.016 ||   ||   ||   || 0.105 
 Other administrative expenditure || 0.025 || 0.015 ||   ||   ||   ||   ||   || 0.040 
 Subtotal HEADING 5 of the multiannual financial framework || 0.065 || 0.043 || 0.021 || 0.016 ||   ||   ||   || 0.145 
 Outside HEADING 5[19] of the multiannual financial framework   ||   ||   ||   ||   ||   ||   ||   ||   
 Human resources ||   ||   ||   ||   ||   ||   ||   ||   
 Other expenditure of an administrative nature ||   ||   ||   ||   ||   ||   ||   ||   
 Subtotal outside HEADING 5 of the multiannual financial framework ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL || 0.065 || 0.043 || 0.021 || 0.016 ||   ||   ||   || 0.145 
The administrative
appropriations required will be met by the appropriations of the DG which are
already assigned to management of the action and/or which 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.
3.2.3.2.   Estimated
requirements of human resources 
–     
¨  The proposal/initiative does not require the use of human
resources. 
–     
X The proposal/initiative requires the use of
human resources, as explained below:
Estimate to be expressed in full time
equivalent units
   || Year 2013 || Year 2014 || Year 2015 || Year 2016 || Enter as many years as necessary to show the duration of the impact (see point 1.6) 
  Establishment plan posts (officials and temporary agents) || 
 01 01 01 01 (Headquarters and Commission’s Representation Offices) || 0.15 || 0.12 || 0.08 || 0.05 ||   ||   ||   
 XX 01 01 02 (Delegations) ||   ||   ||   ||   ||   ||   ||   
 XX 01 05 01 (Indirect research) ||   ||   ||   ||   ||   ||   ||   
 10 01 05 01 (Direct research) ||   ||   ||   ||   ||   ||   ||   
  External personnel (in Full Time Equivalent unit: FTE)[20]   
 XX 01 02 01 (CA, INT, SNE from the "global envelope") || 0.25 || 0.16 || 0.14 || 0.12 ||   ||   ||   
 XX 01 02 02 (CA, INT, JED, LA and SNE in the delegations) ||   ||   ||   ||   ||   ||   ||   
 XX 01 04 yy[21]   || - at Headquarters ||   ||   ||   ||   ||   ||   ||   
 - in delegations ||   ||   ||   ||   ||   ||   ||   
 XX 01 05 02 (CA, SNE, INT - Indirect research)   ||   ||   ||   ||   ||   ||   ||   
 10 01 05 02 (CA, SNE, INT - Direct research) ||   ||   ||   ||   ||   ||   ||   
 Other budget lines (specify) ||   ||   ||   ||   ||   ||   ||   
 TOTAL || 0.40 || 0.28 || 0.22 || 0.17 ||   ||   ||   
XX is the policy area or budget title
concerned.
The human resources
required will be met by staff from the DG who 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.
Description of tasks
to be carried out:
 Officials and temporary staff || Supervise and manage the operation, agree on the Loan Agreement review reports, lead missions and assess progress with conditionality compliance. 
 External staff || A seconded National Expert in Unit ECFIN D2 will be directly involved in preparing the Memorandum of Understanding, liaising with the authorities and the IFIs, liaising with external experts for the operational assessment and ex-post evaluation, conducting review missions, preparing Commission staff reports and Commission procedures related to the management of the assistance. 
3.2.4.     Compatibility with the
current multiannual financial framework 
–     
X Proposal/initiative is compatible the current
multiannual financial framework.
3.2.5.     Third-party contributions 
–     
X The proposal/initiative does not provide for
co-financing by third parties. 
3.3.        Estimated impact on
revenue 
X       Proposal/initiative has no financial
impact on revenue.
[1]               Although in mid-January Jordan's Egyptian gas supplies temporarily returned to normal levels after nearly two years
of reduced supply (240 million cubic feet per day compared to an average of 40 mcf
for most of 2012), they have recently dropped again to one-third of their
normal levels, prompting fresh concerns over the security of the country’s
primary energy source. Moreover, the renegotiation of the gas supply contract
with Egypt has approximately tripled its price.
[2]               Jordan is being seriously affected by the on-going Syrian refugee crisis.
With the biggest influx of Syrian refugees (about 180,000 by January 2013) and
the fastest growing refugee camp (about 1,000 Syrians crossing Jordanian
borders every day), Jordan has been the most affected country in the region at a time the economy is already grappling with severe shortages of
water and electricity. Since the outbreak of the Syrian conflict, the budgetary
cost of hosting Syrian refugees is estimated to have exceeded
EUR 600 mn (about 3% of the Kingdom’s GDP).
[3]               OJ C […], […], p. […].
[4]               Position of the European Parliament of … 2012 and
Decision of the Council of … 2012.
[5]               OJ L 55, 28.2.2011, p. 13.
[6]               OJ L 298, 26.10.2012, p. 1.
[7]               OJ L 362, 31.12.2012, p. 1.
[8]               ABM: Activity-Based Management – ABB: Activity-Based
Budgeting.
[9]               Details of management modes and references to the
Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html
[10]             Diff. = Differentiated appropriations / Non-Diff. =
Non-differentiated appropriations.
[11]             EFTA: European Free Trade Association. 
[12]             Candidate countries and, where applicable, potential
candidate countries from the Western Balkans.
[13]             Year N is the year in which implementation of the
proposal/initiative starts.
[14]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former ‘BA’ lines), indirect research, direct research.
[15]             Year N is the year in which implementation of the
proposal/initiative starts.
[16]             Outputs are products and services to be supplied (e.g.:
number of student exchanges financed, number of km of roads built, etc.).
[17]             As described in point 1.4.2. ‘Specific objective(s)…’ 
[18]             Year N is the year in which implementation of the
proposal/initiative starts.
[19]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former ‘BA’ lines), indirect research, direct research.
[20]             CA= Contract Agent; LA = Local Agent; SNE = Seconded
National Expert; INT = agency staff (‘Intérimaire’); JED= ‘Jeune Expert en
Délégation’ (Young Experts in Delegations). 
[21]             Sub-ceiling for external staff covered by operational
appropriations (former "BA" lines).