Article 1 
1. A Community medium-term financial assistance facility enabling loans to be granted to one or more Member States which are experiencing, or are seriously threatened with, difficulties in their balance of current payments or capital movements shall be established. Only Member States which have not adopted the euro may benefit from this Community facility. The outstanding amount of loans to be granted to Member States under this facility shall be limited to EUR 50 billion in principal. 2. To this end, in accordance with a decision adopted by the Council pursuant to Article 3 and after consulting the Economic and Financial Committee, the Commission shall be empowered on behalf of the European Community to contract borrowings on the capital markets or with financial institutions.
Article 2 
Where a Member State which has not adopted the euro proposes to call upon sources of financing outside the Community which are subject to economic policy conditions, it shall first consult the Commission and the other Member States in order to examine, among other things, the possibilities available under the Community medium-term financial assistance facility. Such consultations shall be held within the Economic and Financial Committee, in accordance with Article 119 of the Treaty.
Article 3 
1. The medium-term financial assistance facility may be implemented by the Council on the initiative of: (a) the Commission, acting pursuant to Article 119 of the Treaty in agreement with the Member State seeking Community financing; (b) a Member State experiencing, or seriously threatened with, difficulties as regards its balance of current payments or capital movements.
Article 3a 
The Commission and the Member State concerned shall conclude a Memorandum of Understanding setting out in detail the conditions laid down by the Council pursuant to Article 3. The Commission shall communicate the Memorandum of Understanding to the European Parliament and the Council.
Article 4 
In cases where restrictions on capital movements are introduced or reintroduced pursuant to Article 120 of the Treaty during the period of the financial assistance, its conditions and arrangements shall be re-examined pursuant to Article 119 of the Treaty.
Article 5 
The Commission shall take the necessary measures to verify at regular intervals, in collaboration with the Economic and Financial Committee that the economic policy of the Member State in receipt of a Community loan complies with the adjustment programme, any other conditions laid down by the Council pursuant to Article 3 and the Memorandum of Understanding referred to in Article 3a. To this end, the Member State shall make all the necessary information available to the Commission and fully cooperate with the latter. On the basis of the findings of such verification, the Commission, after the Economic and Financial Committee has delivered an opinion, shall decide on the release of further instalments. The Council shall decide on any adjustments to be made to the initial economic policy conditions.
Article 6 
Loans granted as medium-term financial assistance may be granted as consolidation of support made available by the European Central Bank under the very short-term financing facility.
Article 7 
1. The borrowing and lending operations referred to in Article 1 shall be carried out in euro. They shall use the same value date and shall not involve the Community in the transformation of maturities, in any interest rate risk, or in any other commercial risk. The characteristics of the successive instalments released by the Community under the financial assistance facility shall be negotiated between the Member State and the Commission. Where the Commission takes the view that the characteristics desired by the Member State will lead to Community financing that runs counter to the technical constraints imposed by financial markets or is such as to tarnish the reputation of the Community as a borrower on those same markets, it has the right to withhold its agreement and propose an alternative solution. Where a Member State receives a loan carrying an early repayment clause and decides to exercise this option, the Commission shall take the necessary steps. 2. At the request of the debtor Member State and where circumstances permit an improvement in the interest rate on the loan, the Commission may refinance all or part of its initial borrowings or restructure the corresponding financial conditions. Refinancing or restructuring operations shall be carried out in accordance with the conditions set out in paragraph 1 and shall not have the effect of extending the average duration of the borrowing concerned or increasing the amount of capital outstanding at the date of the refinancing or restructuring. 3. The costs incurred by the Community in concluding and carrying out each operation shall be borne by the beneficiary Member State. 4. The Economic and Financial Committee shall be kept informed of developments in the operations referred to in the first subparagraph of paragraph 2. 5. The Member State concerned shall open a special account with its National Central Bank for the management of the Community medium-term financial assistance received. It shall also transfer the principal and the interest due under the loan to an account with the European Central Bank seven TARGET2 ( 5 ) business days prior to the corresponding due date.
Article 8 
The Council shall adopt the decisions referred to in Articles 3 and 5, acting by qualified majority on a proposal from the Commission made after consulting the Economic and Financial Committee.
Article 9 
The European Central Bank shall make the necessary arrangements for the administration of the loans. The funds shall be paid only for the purposes indicated in Article 1.
Article 9a 
Without prejudice to Article 27 of the Statute of the European System of Central Banks and of the European Central Bank, the European Court of Auditors shall have the right to carry out, in the Member States receiving Community medium-term financial assistance, any financial controls or audits that it considers necessary in relation to the management of that assistance. The Commission, including the European Anti-Fraud Office, shall thus have the right to send its officials or duly authorised representatives to carry out, in Member States receiving Community medium-term financial assistance, any technical or financial controls or audits that it considers necessary in relation to that assistance.
Article 10 
Every three years the Council shall examine, on the basis of a report from the Commission and after the Economic and Financial Committee has delivered an opinion, whether the facility established still meets, in its principle, arrangements and ceiling, the need which led to its creation.
Article 12 
This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Communities .