Decision (EU) 2020/701 on providing Macro-Financial Assistance to enlargement and neighbourhood partners in the context of the COVID-19 pandemic crisis

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Series Details L 165, Pages 31-37
Publication Date 27/05/2020
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Summary:

Decision (EU) 2020/701 - formally adopted by the Council of the European Union and the European Parliament on 25 May 2020 - which allocates a €3 billion Macro-Financial Assistance (MFA) package to ten enlargement and neighbourhood countries aiming at helping them to limit the economic impact of the COVID-19 (coronavirus) pandemic.

Further information:

Macro-Financial Assistance is part of the European Union's wider engagement with neighbouring and enlargement countries and is intended as an EU crisis response instrument. It is available to those partners experiencing severe balance-of-payments problems with policy conditionality. To benefit from an MFA, countries should meet certain political pre-conditions, and should also benefit from an IMF financial assistance programme.

This particular proposal - which followed a preliminary assessment of financing needs - provides for the MFA funds to be distributed as follows:

  • Albania - €180 million
  • Bosnia and Herzegovina - €250 million
  • Georgia - €150 million
  • Jordan - €200 million
  • Kosovo - €100 million
  • Moldova - €100 million
  • Montenegro - €60 million
  • North Macedonia - €160 million
  • Tunisia - €600 million
  • Ukraine - €1.2 billion.

The funds are to made available for 12 months in the form of loans on favourable terms to help these countries cover their immediate, urgent financing needs. Together with the IMF support, the funds can contribute to enhancing macroeconomic stability and providing space to allow a more effective allocation of resources.

The proposal was put forward by the European Commission on 22 April 2020, adding to its overall approach for supporting partners across the world. The European Parliament's plenary endorsed the initiative on 15 May, followed by the Council of the European Union on 20 May. The Act was signed by the co-legislators on 25 May, and it was published in the Official Journal on 27 May 2020.

The European Commission signed on 16 July 2020 a Memorandum of Understanding (MoU) with North Macedonia for the disbursement of the first package of financial support in this framework. A MoU was signed with Ukraine on 23 July for support in limiting the economic fallout of the pandemic. On 11 August, the Commission announced that similar agreements had also been agreed with Albania, Georgia, Jordan and Montenegro. The MoU with Kosovo and Moldova had by then been already signed. Negotiations with Bosnia & Herzegovina and Tunisia were underway.

Source Link http://data.europa.eu/eli/dec/2020/701/oj
Related Link(s)
Commentary and Analysis
EPRS: At a Glance, May 2020: Macro-financial assistance to enlargement and neighbourhood partners in the coronavirus crisis https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_ATA(2020)649422

News
Reuters, 23/07/2020: Ukraine signs 1.2 billion euro EU loan agreement - PM https://uk.reuters.com/article/idUKKCN24O1LQ
EurActiv, 23/07/2020: Ukraine reassures EU as Brussels and Kyiv sign loan package https://www.euractiv.com/section/europe-s-east/news/ukraine-reassures-eu-as-brussels-and-kyiv-sign-loan-package/

Official
EUR-LEX: COM(2020)163: Proposal for a Decision on providing Macro-Financial Assistance to enlargement and neighbourhood partners in the context of the COVID-19 pandemic crisis https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2020:163:FIN
EUR-LEX: SWD(2020)63: Staff Working Document accompanying the Initiative https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2020:63:FIN
European Parliament: Legislative Observatory: Procedure File for Proposal on Macro-Financial Assistance to enlargement and neighbourhood partners in the context of the COVID-19 pandemic crisis https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2020/0065(COD)
European Parliament: Legislative Train Schedule: Coronavirus - Macro-Financial Assistance to Enlargement and Neighbourhood Partners in the Context of the COVID-19 Pandemic Crisis https://www.europarl.europa.eu/legislative-train/theme-coronavirus-and-eu-action/file-coronavirus-macro-financial-assistance-to-partners-in-the-coronavirus-crisis/05-2020
European Commission: Press Release, 22/04/2020: Coronavirus: Commission proposes €3 billion macro-financial assistance package to support ten neighbouring countries https://ec.europa.eu/commission/presscorner/detail/en/ip_20_716
Council of the European Union: Press Release, 05/05/2020: COVID-19: Council greenlights €3 billion assistance package to support neighbouring partners https://www.consilium.europa.eu/en/press/press-releases/2020/05/05/covid-19-council-greenlights-3-billion-assistance-package-to-support-neighbouring-countries/
European Parliament: Press Release, 15/05/2020: Partner countries get €3bn in loans to prop up economies affected by pandemic https://www.europarl.europa.eu/news/en/press-room/20200511IPR78816/
Council of the European Union: Press Release, 20/05/2020: COVID-19: Council adopts €3 billion assistance package to support neighbouring partners https://www.consilium.europa.eu/en/press/press-releases/2020/05/20/covid-19-council-adopts-3-billion-assistance-package-to-support-neighbouring-partners/
European Commission: Press Release, 16/07/2020: Coronavirus: Macro-financial assistance agreement provides for €80 million disbursement to North Macedonia https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1343
European Commission: Press Release, 23/07/2020: Coronavirus: Macro-financial assistance agreement signed with Ukraine to limit fallout of pandemic https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1392
European Commission: Press statement by Executive Vice-President Valdis Dombrovskis announcing €1.2 billion of macro-financial assistance to Ukraine (23 July 2020) https://ec.europa.eu/commission/presscorner/detail/en/statement_20_1401
European Commission: Press Release, 11/08/2020: Coronavirus: Eight macro-financial assistance programmes agreed to support enlargement and neighbourhood partners https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1457

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