1999/282/EC: Council Decision of 22 April 1999 providing macro-financial assistance to Albania

COUNCIL DECISION
of 22 April 1999
providing macro-financial assistance to Albania
(1999/282/EC)
THE COUNCIL OF THE EUROPEAN UNION
,
Having regard to the Treaty establishing the European Community,
Having regard to the proposal of the Commission(1),
Having regard to the opinion of the European Parliament(2),
(1) Whereas Albania has made substantial progress on the path to recovery from the effects of the economic and social crisis of early 1997; whereas it has successfully implemented an economic recovery programme to address the immediate effects of the crisis;
(2) Whereas trade, commercial and economic links between the Community and Albania are developing within the framework of the Agreement between the European Community and the Republic of Albania on trade and commercial and economic cooperation, signed at Brussels on 11 May 1992;
(3) Whereas Albania, which had been without a constitution since the fall of the communist regime, should have greater respect for human rights and strengthen the foundations of the rule of law as a result of the adoption of a new constitution on 22 November 1998;
(4) Whereas Albania should not deviate from pursuing the fundamental political and economic reforms undertaken to establish the rule of law and a full and complete democracy and to introduce a market economy which takes account of the need for social justice and environmental protection;
(5) Whereas Albania has agreed with the International Monetary Fund (IMF) on a comprehensive set of stabilisation and policy reform measures to be supported by a loan under the Enhanced Structural Adjustment Facility (ESAF);
(6) Whereas Albania has agreed with the World Bank on a set of measures supporting banking reform and employment promotion, which are backed by a highly concessional Rehabilitation Loan; whereas it is intended that a Structural Adjustment Credit will support further structural adjustment measures;
(7) Whereas Albania is undertaking fundamental reforms to promote economic reform and build institutions with a strong implementation capacity; whereas the focus of reforms will be strongly centred on institution-building, on public administration and judicial reforms, on the development of public finance structures and financial control procedures and a strong and performing banking sector strengthened by detailed legislation governing the prudential supervision of credit institutions, on the establishment of a functioning agricultural land market and accelerating enterprise privatisation; whereas the government is firmly committed to modernising customs services on the basis of new codes, to a speedy winding up of the pyramid scheme companies and to combating corruption and organised crime which jeopardise political stability and economic order;
(8) Whereas the authorities of Albania have requested financial assistance for the first year of the medium-term programme from the international financial institutions, the Group of 24 industrialised countries (G-24), and the Community; whereas, over and above the estimated financing which would be provided by the IMF and the World Bank, an important residual financing gap remains to be covered; whereas Paris Club rescheduling and undisbursed pledges made at the Donors' Conference in October 1997 should help cover part of the external financing needed during the first year of the medium-term programme;
(9) Whereas assistance from the Community will be instrumental in supporting Albania's institutional and structural reforms; whereas a Community long-term loan to Albania is an appropriate measure to help ease the country's external financial constraints, support the balance of payments and strengthen the reserve position;
(10) Whereas Albania is a low-income country eligible for highly concessional loans and facilities from the World Bank and the IMF; whereas the Community will provide under the first year of the medium-term programme EUR 19,5 million support to the budget in the form of grants through the PHARE special assistance and the Community food security programme; whereas in these circumstances, the proposal EUR 20 million loan allows overall Community macro-financial support under the first arrangement under the ESAF to reach an appropriate degree of concessionality;
(11) Whereas the Community loan should be managed by the Commission;
(12) Whereas the Treaty does not provide, for the adoption of this Decision, powers other than those of Article 235,