25. 11. 97 Official Journal of the European Communities L 322/37 COUNCIL DECISION of 17 November 1997 providing exceptional financial assistance for Armenia and Georgia (97/787/EC) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof, Having regard to the proposal from the Commission (!), Having regard to the opinion of the European Par- liament (%), Whereas the Commission has consulted the Monetary Committee before submitting its proposal; Whereas Armenia and Georgia are undertaking funda- mental political and economic reforms and are making substantial efforts to implement a market economy model; Whereas trade, commercial and economic links will develop between the Community, Armenia and Georgia within the framework of their respective Partnership and Cooperation Agreements signed on 22 April 1996; Whereas Armenia and Georgia agreed with the Inter- national Monetary Fund (IMF) in 1994 on a first set of stabilization and policy reform measures which was supported by the IMF’s Systemic Transformation Facility; whereas the IMF Board approved in June 1995 stand-by arrangements in support of further ambitious stabilization and structural adjustment reforms for the period July 1995 to June 1996; Whereas the IMF board approved in February 1996 a three-year enhanced structural adjustment facility (ESAF) on concessional terms for Armenia and Georgia, in re- placement of the current stand-by arrangements; Whereas the Armenian and Georgian authorities have formally undertaken to service fully all their outstanding financial obligations towards the Community; Whereas those authorities have requested exceptional financial support from the Community; Whereas Armenia and Georgia are low-income countries and are facing particularly critical economic and social circumstances; and whereas these countries are eligible for highly concessional loans from the World Bank and the IMF; Whereas concessional financial assistance from the Community in the form of long-term loans and straight () OJ C 95, 24. 3. 1997, p. 64. C 304, 6. 10. 1997, p. 39. grants is an appropriate measure to help the beneficiary countries at this critical juncture; Whereas this assistance, both the loan and the grant component, is highly exceptional and therefore in no way constitutes a precedent for the future; Whereas the inclusion of a grant component in this as- sistance is without prejudice to the powers of the bud- getary authority; Whereas this assistance should be managed by the Commission; Whereas the Treaty does not provide, for the adoption of this Decision, powers other than those of Article 235, HAS DECIDED AS FOLLOWS: Article 1 1. The Community shall make available to Armenia and Georgia exceptional financial assistance, in the form of long-term loans and straight grants. 2. The total loan component of this assistance shall amount to a maximum of ECU 170 million, with a maximum maturity of 15 years and a grace period of 10 years. To this end, the Commission is empowered to borrow, on behalf of the European Community, the necessary resources that will be placed at the disposal of the beneficiary countries in the form of loans. 3. The grant component of this assistance shall consist of an amount of ECU 10 million for 1997 and of ECU 17 million annually for the 1998-2002 period. The annual grants shall be made available insofar as the net debtor position of the beneficiary countries towards the Com- munity has been reduced by at least a similar amount. 4.  The financial assistance provided for in paragraphs 2 and 3 will only be disbursed to the beneficiary countries on condition that: (a) those countries have fully settled all existing obliga- tions towards the Community; (b) those countries are satisfactorily implementing a comprehensive adjustment and reform programme in the context of an IMF programme. 5. The Community financial assistance shall be managed by the Commission, in close consultation with the Monetary Committee, taking into account existing and future agreements to be reached between the IMF and the beneficiary countries.