CELEX: 51992PC0307
Language: en
Date: 1992-07-02
Title: Proposal for a COUNCIL DECISION providing long term financial assistance for Albania

25 . 7 . 92                          Official Journal of the European Communities                                  No C 188 / 5
                                                             II
                                                    (Preparatory Acts)
                                               COMMISSION
                  Proposal for a Council Decision providing long-term financial assistance for Albania
                                                      (92 / C 188 / 05)
                                                   COM(92) 307 final
                                      (Submitted by the Commission on 7 July 1992)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                          Whereas over and above the estimated financing which
                                                                  could be provided by the IMF, the World Bank and
                                                                  official bilateral creditors in the context of the 12-month
Having regard to the Treaty establishing the European             stand-by arrangement expected to be agreed between
Economic Community, and in particular Article 235                 Albania and the IMF, a financial gap of some US$ 165
thereof,                                                          million remains to be covered in order to avoid an
                                                                  additional degree of import compression which would
                                                                  jeopardize the achievement of the policy objectives
Having regard to the proposal from the Commission,                underlying the Government's reform effort ;
submitted following consultation with the Monetary
Committee ,
                                                                  Whereas the Commission, as coordinator of assistance
                                                                  from the Group of 24, has invited them to provide highly
Having regard to the opinion of the European                      concessional financial assistance to Albania in order to
Parliament,                                                       support that country's adjustment and reform efforts ;
Whereas Albania is undertaking fundamental political              Whereas the grant by the Community of a long-term
and economic reforms and has decided to adopt a                   highly subsidized loan to Albania is an appropriate
market economy model ;                                            measure to support that country's balance of payments
                                                                  and strengthen its reserve position ;
Whereas trade, commercial and economic links between
the Community and Albania are expected to develop                 Whereas the question of the risks associated with
within the framework of the            1992   Cooperation         guarantees from the general budget of the European
Agreement ;                                                       Communities will be examined in the context of the
                                                                  renewal in 1992 of the Interinstitutional Agreement of
Whereas financial assistance from the Community will be           budgetary discipline and improvement of the budgetary
                                                                  procedure ;
instrumental in supporting the adjustment and reform
efforts of Albania, will strengthen mutual confidence and
will bring Albania closer to the Community;                       Whereas the Community financial assistance should be
                                                                  managed by the Commission ;
Whereas Albania is a low-income country eligible to
highly concessional loans from the World Bank and the             Whereas the Treaty does not provide, for the adoption
IMF and whereas the Group of 24 agreed to consider
                                                                  of this Decision , powers other than those of Article 235 ,
complementary financial assistance through long-term
loans on concessional terms, as soon as the IMF has
reached an agreement on a stabilization and reform
                                                                  HAS DECIDED AL FOLLOWS :
programme with Albania ;
Whereas the Albanian authorities have requested                                              Article 1
financial assistance from the International Monetary
Fund (IMF), the Group of 24 industrial countries and               1 . The Community shall grant to Albania a long-term
the Community ;                                                   loan facility of a maximum amount of ECU 70 million in
 ---pagebreak--- No C 188 / 6                           Official Journal of the European Communities                                 25 . 7 . 92
principal, with a maximum duration of 10 years, with a           2.    The funds shall be paid to the National Bank of
view to ensuring a sustainable balance of payments               Albania .
situation and strengthening the reserve position.
                                                                                            Article 4
2 . To this end , the Commision is empowered to
borrow, on behalf of the Community, the necessary
resources that will be placed at the disposal of Albania in       1 . The borrowing and lending operations referred to
the form of a loan .                                             in Article 1 shall be carried out using the same value date
                                                                 and must not involve the Community in the transfor­
3 . This loan will be managed by the Commission in               mation of maturities, in any exchange or interest-rate
full consultation with the Monetary Committee and in a           risk, or in any other commercial risk.
manner consistent with any Agreement reached between
the IMF and Albania .                                            2.    The Commission shall take the necessary steps , if
                                                                 Albania so decides, to include in the loan conditions , and
4. All interest payments under the present loan facility         also to exercise, an early repayment clause .
shall be borne during the first five years by the general
budget of the European Communities. During the
remaining loan period, an interest rate subsidy of 6 %           3 . At the request of Albania, and where circumstances
per year shall be granted and financed by the general            permit an improvement in the interest rate on the loans,
budget of the European Communities .                             the Commission may refinance all or part of its initial
                                                                 borrowings or restructure the corresponding financial
                                                                 conditions. Refinancing or restructuring operations shall
                           Article 2                             be carried out in accordance with the conditions set out
                                                                 in paragraph 1 and shall not have the effect of extending
 1.    The Commission is empowered to negotiate with             the average duration of the borrowing concerned or
the Albanian authorities, after consultation with the            increasing the amount, expressed at the current exchange
Monetary Committee, the economic policy conditions               rate, of capital outstanding at the date of the refinancing
attached to the loan . These conditions shall be consistent
                                                                 or restructuring.
with any agreement as referred to in Article 1 (3) and
with arrangements made by the Group of 24 .
                                                                 4 . All related cost incurred by the Community in
2 . The Commission shall verify at regular intervals , in        concluding and carrying out the loan operation under
collaboration with the Monetary Committee and in close           this Decision shall be borne by Albania.
coordination with the Group of 24 and the IMF, that the
economic policy in Albania is in accordance with the              5 . The Monetary Committee shall be kept informed
objectives of this loan and that its conditions are being        of developments in the operations referred to in para­
fulfilled .
                                                                 graphs 2 and 3 at least once a year.
                           Article 3
                                                                                            Article 5
 1.    The loan shall be made available to Albania in two
instalments . The first instalment shall be released as soon     At least once a year the Commission shall address to the
as a 'stand-by arrangement' has been concluded between           European Parliament and to the Council a report, which
Albania and the IMF and the second instalment not                will include an evaluation , on the implementation of this
before the first quarter of 1993 , subject to Article 2 (2).      Decision .