21.12.2007 Official Journal of the European Union L 337/111 COUNCIL DECISION of 10 December 2007 providing Community macro-financial assistance to Lebanon (2007/860/EC) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof, (6) Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament, After consulting the Economic and Financial Committee, July-August 2006 military conflict and a projected dete- rioration of the balance of payments in 2007. The Lebanese authorities have requested financial assistance on a concessional basis from the International Financial Institutions, the Community and other bilateral donors. Over and above the financing from the IMF and the World Bank, a substantial residual financing gap remains to be covered to relieve the country’s balance of payments, public finances and public debt and support the policy objectives attached to the authorities’ reform efforts. (7)  Lebanon is one of the most indebted countries in the world facing a heavy debt overhang. In these circum- Whereas: stances, the Community assistance to Lebanon should be made available in the form of a combination of a grant and loan, as an appropriate measure to help the (1)~ On 4 January 2007 the authorities of Lebanon adopted a beneficiary country at this critical juncture. comprehensive programme of socio-economic reforms, which simultaneously embraces fiscal, structural and social measures, - setting medium-term priorities for ® In order to ensure efficient protection of the government action. Community’s financial interests linked to the present financial assistance, it is necessary to provide for appro- priate measures by Lebanon related to the prevention of, (2)  Lebanon, on the one hand, and the European and to the fight against, fraud, corruption and any other Community and its Member States on the other hand, irregularities linked to this assistance, as well as for have signed an Association Agreement (), which entered controls by the Commission and audits by the Court into force on 1 April 2006. of Auditors. (3)  The authorities of Lebanon are committed to economic (9  The release of the Community financial assistance is stabilisaFion and structural reforms, supported by the without prejudice to the powers of the budgetary International Monetary Fund (IMF) through a authority. programme under the Emergency Post-Conflict Arrangement (EPCA) which was approved on 9 April 2007. (10)  This assistance should be managed by the Commission in consultation ~with the Economic and Financial (4)  Relations between Lebanon and the European Union are Committee, developing within the framework of the European Neigh- bourhood Policy, which is expected to lead to deeper economic integration. The EU and Lebanon have HAS DECIDED AS FOLLOWS: agreed on a European Neighbourhood Policy Action Plan identifying medium-term priorities in EU-Lebanon relations and related policies. Article 1 1. The Community shall make available to Lebanon financial (5)  Lebanon faces substantial financing needs arising from assistance amounting to a maximum of EUR 80 million, with a the mounting financial constraints of the public sector, view to supporting Lebanon’s domestic efforts of post-war including a high level of public debt, aggravated by the reconstruction and sustainable economic recovery, and in this way, alleviating the financial constraints on the implementation (") OJ L 143, 30.5.2006, p. 2. of the government’s economic programme.