13.5.1999 Official Journal of the European Communities L 123/57 COUNCIL DECISION of 10 May 1999 providing macro-financial assistance to Bosnia and Herzegovina (1999/325/EC) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof, Having regard to the proposal of the Commission ('), Having regard to the opinion of the European Parlia- ment (%), ) Whereas the Commission consulted the Monetary Committee before submitting its proposal; Whereas Bosnia and Herzegovina is undertaking fundamental institutional and political reforms to establish common institutions and policies; whereas Bosnia and Herzegovina is making substantial efforts to promote economic reform and establish an open market economy, which is essen- tial order to create jobs, improve living conditions for the people and allow the return of refugees and displaced persons; Whereas within the Regional Approach defined by the Council, it is desirable to support efforts made to ensure a stable political and economic environ- ment in Bosnia and Herzegovina, with a view to evolving towards the development of a relationship of full cooperation with the Community; Whereas financial assistance of an exceptional nature from the Community should be instru- mental in supporting the implementation of common institutions and policies in Bosnia and Herzegovina consistent with the Dayton peace agreement, while strengthening mutual confidence and bringing Bosnia and Herzegovina closer to the Community; Whereas Bosnia and Herzegovina has agreed with the International Monetary Fund (IMF) on a comprehensive set of economic and institutional policy reform measures to be supported by a 12- month upper credit tranche Stand-By Arrangement (SBA); whereas the SBA will be followed or replaced by an Enhanced Structural Adjustment Facility (ESAF) () OJ C 396, 19.12.1998, p. 16. () Opinion delivered on 12 March 1999 (not yet published in the Official Journal). (6) (1) Whereas Bosnia and Herzegovina has agreed with the World Bank on a set of structural adjustment measures to be backed by two highly concessional structural adjustment loans and credits in the areas of public finance reform, and enterprise and banking privatisation; Whereas the authorities of Bosnia and Herzegovina have requested financial assistance from the inter- national financial institutions, the Community, and other bilateral donors; whereas, over and above the estimated financing which could be provided by the IMF and the World Bank, an important residual financing gap remains to be covered in the coming months in order to strengthen the coun- try’s reserve position and support the policy objec- tives attached to the authorities’ reform effort; Whereas an the fourth Donors’ Pledging Confer- ence on Bosnia and Herzegovina on 7 and 8 May 1998, the international community welcomed the agreements reached with the Bretton Woods insti- tutions and decided to support strongly the economic reform and reconstruction programmes of Bosnia and Herzegovina in the form of firm financial pledges; Whereas the authorities of Bosnia and Herzegovina have committed themselves to discharge fully all outstanding financial obligations of all public enti- ties of Bosnia and Herzegovina towards the Euro- pean Community and the European Investment Bank, and to accept the responsibility by way of guarantee of those obligations that are not yet due; Whereas the present exceptional Community macro-financial assistance to Bosnia and Herzego- vina aims to help ease the country’s external finan- cial constraints, supporting the balance of payments and strengthening the reserve position; Whereas Bosnia and Herzegovina being a low- income country eligible for highly concessional loans and facilities from the World Bank and the IMF, this macro-financial assistance requires substantial elements of concessionality;