2009/890/EC: Council Decision of 30 November 2009 providing macro-financial assistance to Armenia

5.12.2009 EN Official Journal of the European Union L 320/3
COUNCIL DECISION
of 30 November 2009
providing macro-financial assistance to Armenia
(2009/890/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 from the Commission,
Having regard to the Opinion of the European Parliament,
After consulting the Economic and Financial Committee,
Whereas:
(1) Relations between Armenia and the European Union (EU) are developing within the framework of the European Neighbourhood Policy. The EU and Armenia agreed on 14 November 2006 on a European Neighbourhood Policy Action Plan identifying medium-term priorities in EU-Armenia relations and related policies which are expected to lead to deeper economic integration. The framework of EU-Armenian relations is enhanced by the newly launched Eastern Partnership.
(2) The Armenian economy has been increasingly hit by the international financial crisis since the second half of 2008, with declining output, falling fiscal revenues and rising external financing needs.
(3) Armenia’s economic adjustment and recovery is supported by financial assistance of the International Monetary Fund (IMF). In March 2009, the Armenian authorities agreed with the IMF on a Stand-By Arrangement of USD 540 million to support the Armenian economy to achieve the necessary adjustment to the economic crisis.
(4) Following a further deterioration of the economic situation and a necessary revision of the programme’s underlying economic assumptions as well as higher external financing needs, an agreement was reached between Armenia and the IMF for an increase of IMF resources of USD 250 million, which was approved on 22 June 2009 by the IMF Board.
(5) The Community intends to provide in 2009 and 2010 European Neighbourhood and Partnership Instrument (ENPI) budget support grants of a total of EUR 32 million.
(6) Armenia has requested additional Community macro-financial assistance in view of the worsening economic situation and outlook.
(7) Given that a residual financing gap remains in the balance of payments in 2010, macro-financial assistance is considered an appropriate response to Armenia’s request under the current exceptional circumstances to support economic stabilisation in conjunction with the current IMF programme. The present financial assistance is also expected to contribute to alleviate budgetary financing needs.
(8) In order to ensure efficient protection of the Community’s financial interests linked to the present financial assistance, it is necessary to provide for appropriate measures by Armenia related to the prevention of, and the fight against, fraud, corruption and any other irregularities linked to this assistance, as well as for controls by the Commission and audits by the Court of Auditors.
(9) The release of the Community financial assistance is without prejudice to the powers of the budgetary authority.
(10) This assistance should be managed by the Commission, in consultation with the Economic and Financial Committee.
(11) The Treaty does not provide, for the adoption of this Decision, powers other than those of Article 308,