Decision (EU) 2020/701 on providing macro‐financial assistance to enlargement and neighbourhood partners in the context of the COVID‐19 pandemic

What it is

to provide EUR 3 billion of macro-financial assistance (MFA) to ten enlargement and neighbourhood partner countries to help them limit the economic fallout of the COVID-19 outbreak. PROPOSED ACT: Decision of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure on an equal footing with the Council. BACKGROUND: the current crisis caused by the COVID-19 outbreak is having a very negative impact on the economic and financial stability of the regions affected by enlargement and the neighbourhood policy. Most, if not all, enlargement and neighbourhood partners are set for a recession this year. Depending on the spread of the virus, as well as of its economic consequences, there is also a clear and imminent risk related to social stability and security, with possible spill-overs within the region and beyond. The European Parliament adopted by 547 votes to 93, with 47 abstentions, a legislative resolution on the proposal for a decision of the European Parliament and of the Council on providing Macro-Financial Assistance to enlargement and neighbourhood partners in the context of the COVID-19 outbreak. Parliament adopted its position at first reading under the ordinary legislative procedure. As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act. The aim of the proposed decision is to provide EUR 3 billion of macro-financial assistance (MFA) in the form of loans to 10 enlargement and neighbourhood partner countries - Albania, Bosnia and Herzegovina, Georgia, Jordan, Kosovo, Moldova, Montenegro, Northern Macedonia, Tunisia, Ukraine - to help them mitigate the economic impact of the COVID-19 outbreak. Combined with the support provided by the International Monetary Fund (IMF), this financing shall help to cover part of the partners' external financing needs in 2020 and 2021 following a significant deterioration in their balance of payments caused by the ongoing COVID-19 crisis situation. The granting of EU MFA shall be subject to the precondition that the partner respects effective democratic mechanisms based on a multi-party parliamentary system, the rule of law and the existence of human rights guarantees. The EU’s MFA shall be subject to economic policy conditions to be laid down in a Memorandum of Understanding. These conditions must be consistent with the agreements or conventions concluded between the International Monetary Fund (IMF) and the partner, including the macroeconomic adjustment and structural reform programmes implemented by the partner with the support of the IMF. PURPOSE: to approve of EUR 3 billion of macro-financial assistance (MFA) to ten enlargement and neighbourhood partner countries to cope with the economic consequences of the COVID-19 pandemic. LEGISLATIVE ACT: Decision (EU) 2020/701 of the European Parliament and of the Council on providing macro ‐ financial assistance to enlargement and neighbourhood partners in the context of the COVID ‐ 19 pandemic. CONTENT: the Decision aims to provide EUR 3 billion in loans for macro-financial…

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