91/510/EEC: Council Decision of 23 September 1991 providing a medium-term loan to Algeria

COUNCIL DECISION  of 23 September 1991  providing a medium-term loan to Algeria  (91/510/EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES
,
Having regard to the Treaty establishing the European Economic Community, and in particular Article 235 thereof,
Having regard to the proposal from the Commission (1),
Having regard to the opinion of the European Parliament (2),
Whereas Algeria has undertaken since 1989 political and economic reforms and has decided to adopt pluralism and a market economy model;
Whereas the Community and Algeria traditionally have close economic, political and cultural links, which have been further developed within the framework of the 1978 Cooperation Agreement and related Protocols and Agreements;
Whereas the Algerian authorities have adopted for 1991 an economic and financial programme designed to accelerate market-related reforms and the liberalization of imports and foreign exchange arrangements with the aim of achieving convertibility for the  national currency by early 1992;
Whereas this programme is supported by the International Monetary Fund (IMF) which has recently approved a stand-by credit authorizing drawings of up to SDR 300 million, and by the World Bank which has recently approved a US $ 350 million structural  adjustment loan;
Whereas in spite of the financing which would be provided by the IMF, the World Bank and other multilateral and bilateral official creditors, Algeria will be facing during 1991 and 1992 exceptional balance-of-payments financing needs reflecting heavy  external debt servicing payments related to short-term borrowing and a bunching of repayments on medium-term external debt;
Whereas the Algerian authorities have requested complementary financial assistance from the Community in order to safeguard Algeria's credit-worthiness, strengthen its reserve position and facilitate the introduction of convertibility;
Whereas the success of Algeria's economic and financial programme will depend crucially on the agreement with the commercial bank creditors on a refinancing arrangement designed to improve the profile of the external debt service and repayments;
Whereas the grant by the Community of a medium-term loan to Algeria will assist the balance of payments, strengthen the country's reserve position and support the economic and political reform process;
Whereas the Community loan should be managed by the Commission;
Whereas the implementation of the abovementioned measures will help to achieve the Community's aims; whereas the Treaty does not provide, for the measures in question, powers other than those of Article 235;
Whereas the question of the risks associated with guarantees from the general budget of the European Communities will be examined in the context of the renewal in 1992 of the Interinstitutional Agreement on budgetary discipline and improvement of the  budgetary procedure,