| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2016) 431 final (29.6.16) |
| Publication Date | 29/06/2016 |
| Content Type | Policy-making |
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Since early 2011, the Jordanian economy has been significantly affected by the ongoing regional unrest, notably in neighbouring Iraq and Syria. Combined with a weaker global environment, this regional unrest has taken a heavy toll on external receipts and has strained public finances. The Syrian conflict has impacted Jordan not only by disrupting trade with and through Syria but also by causing an inflow of around 1.3 million of Syrian refugees into Jordan that has increased pressure on Jordan's fiscal position, public services and infrastructure. In 2012, Jordan and the IMF agreed on a first adjustment programme, which was supported by a three-year Stand-By Arrangement (SBA) in the amount of $2 billion. This programme was successfully completed in August 2015. The IMF programme was complemented by a first Macro-Financial Assistance from the European Union (the EU) in the amount of €180 million (MFA-I), which was adopted by the European Parliament and the Council in December 2013 and was disbursed in two tranches of €100 million and €80 million in February 2015 and in October 2015, respectively. While the country made progress with macroeconomic stabilisation and reform under the first programme supported by the IMF, the EU and other donors, the persistence of the conflicts in neighbouring Syria and Iraq continued to disrupt Jordan's foreign trade and undermine investor and tourist confidence, with the economic situation deteriorating again in 2015. In this context, the Jordanian government has called for increased support from the international community to address the economic consequences of the Syrian crisis, and in particular the presence of a large number of Syrian refugees in Jordan. On 3 March 2016, through a letter from the Ministry of Planning and International Cooperation to the Commissioner for Economic and Financial Affairs Taxation and Customs, the Jordanian authorities formalised their request for a new MFA from the EU. The new proposed MFA operation will be part of the so-called EU-Jordan Compact (annexed to EU-Jordan partnership priorities), a document that the EU and Jordan are discussing and that would contain precise commitments on both sides (including financial assistance from the EU) aimed at addressing a number of policy priorities. |
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| Source Link | Link to Main Source http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2016:431:FIN |
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| Countries / Regions | Europe, Middle East |
