1999/733/EC: Council Decision of 8 November 1999 providing supplementary macro-financial assistance to the former Yugoslav Republic of Macedonia

COUNCIL DECISION
of 8 November 1999
providing supplementary macro-financial assistance to the former Yugoslav Republic of Macedonia
(1999/733/EC)
THE COUNCIL OF THE EUROPEAN UNION
,
Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof,
Having regard to the proposal of the Commission(1),
Having regard to the opinion of the European Parliament(2),
Whereas:
(1) The Commission consulted the Economic and Financial Committee before submitting its proposal;
(2) The former Yugoslav Republic of Macedonia is undertaking fundamental economic reforms and is making substantial efforts to establish a well-functioning market economy with a view to increasing employment and living standards;
(3) The former Yugoslav Republic of Macedonia has suffered very large economic costs as a direct consequence of the conflict in Kosovo and has made, despite severe social and economic strains, exceptional efforts to host a high number of refugees;
(4) The former Yugoslav Republic of Macedonia and the European Community have signed a Cooperation Agreement(3) which entered into force on 1 January 1998;
(5) The Council, on 26 April 1999, has welcomed the prospect of a feasibility study towards upgrading the contractual relations between the European Community and the former Yugoslav Republic of Macedonia;
(6) The former Yugoslav Republic of Macedonia has reached a preliminary agreement with the International Monetary Fund (IMF) on an arrangement under the Compensatory and Contingency Financing Facility and discussions are well advanced between the two parties on a stand-by arrangement (SBA) in support of the authorities' adjustment and reform programme;
(7) The World Bank is preparing a new Financial and Enterprise Structural Adjustment Loan, which envisages substantial adjustment and investment financing in support of the former Yugoslav Republic of Macedonia's reform efforts in the enterprise and financial sectors;
(8) The authorities of the former Yugoslav Republic of Macedonia have requested financial assistance from the international financial institutions, the Community and other bilateral donors; over and above the estimated financing which could be provided by the IMF and the World Bank, an important residual financing gap remains to be covered in 1999 and 2000 in order to strengthen the country's reserve position and support the policy objectives attached to the government's reform programme;
(9) Financial assistance from the Community in the form of a combination of a long-term loan and a straight grant to the former Yugoslav Republic of Macedonia is an appropriate measure to support the balance of payments and help ease the country's external financial constraints in the current exceptionally difficult circumstances, comforting the implementation of structural reforms and helping to alleviate the social consequences of the economic disruptions caused by the conflict in Kosovo;
(10) The inclusion of a grant component in this assistance is without prejudice to the powers of the budgetary authority;
(11) This assistance should be managed by the Commission in accordance with the principles of sound financial management;
(12) The Treaty does not provide, for the adoption of this Decision, powers other than those of Article 308,