Proposal for a Decision providing further macro-financial assistance to the Hashemite Kingdom of Jordan

Summary:

Legislative initiative published by the European Commission in September 2019 setting out the allocation of further macro-financial assistance (MFA) to Jordan in order to support the country's efforts in preserving macroeconomic stability and enhancing growth prospects.

Further information:

The Jordanian economy was affected by regional unrest, which took a toll on external receipts and strained public finances. While appropriate policy response and internal support helped the country to preserve macroeconomic stability, Jordan's economy remained vulnerable to external shocks.

Jordan was already subject to two MFA programmes from the European Union - first programme (MFA-I) was completed in October 2015 and the second programme (MFA-II) was completed in July 2019. On that same month, the country's government addressed an official request to the European Commission for additional macro-financial assistance from the EU in the amount of €500 million in three instalments.

In light of this request, the European Commission put forward on 6 September 2019 a proposal for a third MFA programme (MFA-III). The objective of the proposed MFA is to help the country cover part of its additional external financial needs in 2020-2021. In addition, the assistance provided by the European Union (EU) would provide incentives to step up Jordan’s reform efforts through a Memorandum of Understanding (MoU), to be agreed with the Jordanian authorities, setting out an appropriate package of measures supporting economic adjustment and structural reforms.

The Council of the European Union and the European Parliament agreed to the third MFA programme on 17 December 2019.

Official

EUR-Lex: SWD(2019)324: Ex-ante evaluation statement https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2019:324:FIN

European Parliament: Legislative Observatory: Procedure File for Proposal on Further macro-financial assistance to Jordan https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2019/0192(OLP)

European Commission: Press Release, 19/12/2019: Commission welcomes agreement on €500 million Macro-Financial Assistance programme for Jordan https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6833

Council of the European Union: Press Release, 19/12/2019: Jordan: EU approves further assistance of €500 million in loans https://www.consilium.europa.eu/en/press/press-releases/2019/12/19/jordan-eu-approves-further-assistance-of-500-million-in-loans/

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