14.8.2013 Official Journal of the European Union L 218/15 DECISIONS DECISION No 778/2013/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 12 August 2013 providing further macro-financial assistance to Georgia THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 212(2) thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments, Acting in accordance with the ordinary legislative procedure, in the light of the joint text approved by the Conciliation Committee on 26 June 2013 (1), Whereas: (1)  Relations between Georgia and the European Union are developing within the framework of the European Neigh- bourhood Policy. In 2006, the Community and Georgia agreed on a European Neighbourhood Policy Action Plan identifying medium-term  priorities in EU-Georgia relations. In 2010, the Union and Georgia launched the negotiations of an Association Agreement that is expected to replace the existing EU-Georgia Partnership and Cooperation Agreement (%). The framework of EU- Georgia relations is further enhanced by the newly launched Eastern Partnership. (20 The extraordinary European Council meeting on 1 September 2008 confirmed the Union’s willingness to strengthen EU-Georgia relations in the aftermath of the armed conflict in August 2008 between Georgia and the Russian Federation. (3)  The Georgian economy has been affected by the inter- national financial crisis since the third quarter of 2008, with declining output, falling fiscal revenues and rising external financing needs. (4 At the International Donors’ Conference held on 22 October 2008, the international community pledged (1) Position of the European Parliament of 10 May 2011 (O] C 377 E, 7.12.2012, p. 211) and position of the Council at first reading of 10 May 2012 (O] C 291 E, 27.9.2012, p. 1). Position of the European Parliament of 11 December 2012 (not yet published in the Official Journal). Legislative resolution of the European Parliament of 4 July 2013 (not yet published in the Official Journal) and decision of the Council of 9 July 2013. Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and Georgia, of the other part (O] L 205, 4.8.1999, p. 3). — ) (10) support to Georgia’s economic recovery in line with the Joint Needs Assessment carried out by the United Nations and the World Bank. The Union announced that it would provide up to EUR 500 million as financial assistance to Georgia. Georgian economic adjustment and recovery is supported by financial assistance from the International Monetary Fund (IMF). In September 2008, the Georgian authorities agreed with the IMF on a Stand-By Arrangement of USD 750 million to support the Georgian economy in making the necessary adjustments in the light of the financial crisis. Following a further deterioration of Georgia’s economic situation and a necessary revision of the underlying economic assumptions of the IMF programme as well as Georgia’'s greater external financing needs, an agreement was reached between Georgia and the IMF for a loan increase of USD 424 million under the Stand-By Arrangement, which was approved in August 2009 by the IMF Board. The Union allocated, for 2010-2012, under the European Neighbourhood and Partnership Instrument (ENPI), budget support grants to Georgia of, on average, EUR 24 million per year. In view of Georgia’s deteriorating economic situation and outlook, it has requested Union macro-financial assistance. Given that there is still a residual financing gap in Georgia’s balance of payments, macro-financial assistance is considered an appropriate response to Georgia's request under the current exceptional circumstances to support economic stabilisation in conjunction with the current IMF programme. The Union macro-financial assistance to be provided to Georgia (‘the Union’s macro-financial assistance’) should not merely supplement programmes and resources from the IMF and the World Bank, but should ensure the added value of Union involvement. The Commission should ensure that the Union’s macro- financial assistance is legally and substantially in line with the measures taken within the different areas of external action and other relevant Union policies.