91/310/EEC: Council Decision of 24 June 1991 providing further medium-term financial assistance for Hungary

COUNCIL DECISION  of 24 June 1991  providing further medium-term financial assistance for Hungary  (91/310/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), submitted following consultation with the Monetary Committee,
Having regard to the opinion of the European Parliament (2),
Whereas Hungary is undertaking fundamental political and economic reforms and has decided to adopt a market economy model;
Whereas the said reforms are already under implementation with the financial support from the Community and will strengthen mutual confidence and bring Hungary closer to the Community;
Whereas Hungary and the Community have entered into negotiations for the conclusion of European Agreements establishing a relationship of association;
Whereas, by Decision 90/83/EEC (3), the Council decided to grant Hungary a medium-term loan facility of a maximum amount of ECU 870 million in order to permit that country to overcome the difficulties of structural adjustment of its economy;
Whereas, however, following the changes in the international environment, Hungary, like other Central and Eastern European countries is now facing additional external shocks which might jeopardize its financial stability and cause its balance of  payments to deteriorate sharply;
Whereas the Hungarian authorities have requested financial assistance from the International Monetary Fund (IMF), the Group of 24 industrial countries and the Community; whereas, over and above the estimated financing which could be provided by the IMF,  the World Bank and official bilateral creditors, a financial gap of some ECU 360 million remains to be covered in 1991, in order to prevent a further erosion of Hungary's reserve position and avoid an additional degree of import compression, which could  seriously jeopardize the achievement of the policy objectives underlying the Government's reform effort;
Whereas the Commission, as coordinator of assistance from the Group of 24 has invited them and other third countries to provide medium-term financial assistance to Hungary to support that country's balance of payments and strengthen its reserve  position;
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;
Whereas the Community loan should be managed by the Commission;
Whereas the Treaty does not provide, for the adoption of this Decision, powers other than those of Article 235,