Proposal for a Council Decision providing supplementary macro-financial assistance to Romania
C 307 E/40 EN Official Journal of the European Communities 26. 10. 1999 Proposal for a Council Decision providing supplementary macro-financial assistance to Romania (1999/C 307 E/09) COM(1999) 405 final - 1999/0167(CNS) (Submitted by the Commission on 29 July 1999) THE COUNCIL OF THE EUROPEAN UNION, objectives programme; attached to the government’s reform Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof, Having regard to the proposal of the Commission, (8) Whereas a Community long-term loan to Romania is an appropriate measure to help ease the country’s external financial constraints, supporting the balance of payments and strengthening the reserve position; Having regard to the opinion of the European Parliament, (9) Whereas the Community loan should be managed by the Commission; (1) Whereas the Commission consulted the Economic and Financial Committee before submitting its proposal; (10) Whereas the Treaty does not provide, for the adoption of this Decision, powers other than those of Article 308, (2) Whereas Romania is undertaking fundamental economic reforms and is making substantial efforts to establish a well-functioning market economy; HAS DECIDED AS FOLLOWS: (3) Whereas Romania and the European Union have signed on a Europe Agreement establishing a relationship of association; (4) Whereas the European Council its meeting in Luxembourg in December 1997 decided to launch an accession process comprising Romania along with the other Central and East European applicant countries and Cyprus; at (5) Whereas Romania has reached an agreement with the stand-by authorities’ International Monetary (SBA) arrangement adjustment and reform programme; Fund (IMF) on a in support of the (6) Whereas the World Bank has approved a new Private substantial Sector Adjustment Loan, which envisages adjustment and investment financing in support of Romania’s reform efforts in the enterprise and financial sectors; (7) Whereas the authorities of Romania have requested financial assistance from the international financial insti- the Community and other bilateral donors; tutions, 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 during the programme period in order to strengthen the the policy reserve position and support country’s Article 1 1. The Community shall make available to Romania a long-term loan facility of a maximum principal amount of EUR 200 million with a maximum maturity of ten years, with a view to ensuring a sustainable balance of payments situation and comforting the implementation of the necessary structural reforms. 2. 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 Romania in the form of a loan. 3. The loan referred to in paragraph 2 shall be managed by the Commission in close consultation with the Economic and Financial Committee and in a manner consistent with any agreement reached between the IMF and Romania. Article 2 1. The Commission shall be empowered to agree with the authorities of Romania, after consultation with the Economic the economic policy conditions and Financial Committee, attached to the loan. These conditions shall be consistent with the agreements referred to in Article 1(3). 2. The Commission shall verify at regular intervals, in colla- boration with the Economic and Financial Committee and in the economic policy in co-ordination with the IMF, Romania is in accordance with the objectives of this loan and that its conditions are being fulfilled. that 26. 10. 1999 EN Official Journal of the European Communities C 307 E/41 Article 3 1. The loan shall be made available to Romania in two instalments. Subject to Article 2, the first instalment is to be released on the basis of a satisfactory track record of Romania’s macroeconomic programme in the context of the SBA agreed with the IMF. Subject to Article 2, 2. the second instalment shall be released on the basis of a satisfactory continuation of Romania’s adjustment and reform programme and not before one quarter after the release of the first instalment. 3. The funds shall be paid to the National Bank of Romania. Article 4 1. The borrowing and lending operations referred to in Article 1 shall be carried out using the same value date and must not involve the Community in the transformation of maturities, in any exchange or interest rate risks, or in any other commercial risk. The Commission shall 2. Romania so requests, take the necessary steps, if to ensure that an early repayment clause is included in the loan terms and conditions and that it may be exercised. At 3. the request of Romania, and where circumstances permit an improvement in the interest rate on the loan, the Commission may refinance all or part of its initial borrowings or restructure the corresponding financial conditions. Refi- nancing or restructuring operations shall be carried out in accordance with the conditions set out in paragraph 1 and shall not have the effect of extending the average maturity of the borrowing concerned or increasing the amount, expressed at the current exchange rate, of capital outstanding at the date of the refinancing or restructuring. All related costs 4. concluding and carrying out Decision shall be borne by Romania. incurred by the Community the operation under in this 5. The Economic and Financial Committee shall be kept informed of developments in the operations referred to in paragraphs 2 and 3 at least once a year. Article 5 At least once a year the Commission shall address to the European Parliament and to the Council a report, which will include an evaluation of the implementation of this Decision. C 307 E/42 EN Official Journal of the European Communities 26. 10. 1999 BUDGETARY RESOURCES NECESSARY FOR THE PROVISIONING OF THE GUARANTEE FUND IN 1999 AND MARGIN UNDER THE RESERVE FOR LOANS AND LOAN GUARANTEES IN FAVOUR OF THIRD COUNTRIES ANNEX (EUR million) Operations Basis of the calculation (1) Provisioning of the Fund (2) Reserve Margin Operations decided EIB/New mandates (4) - CEEC - ALA - South Africa - MED - FYROM - Bosnia EIB/Old protocols (4) - Syria Macro-financial assistance - Albania III - Bosnia I Operations proposed - EIB/Turkey (5) - EIB/Croatia (6) Macro-financial assistance - Bulgaria IV (7) - Romania IV (7) 872,9 218,1 143,5 351,4 38,5 42,0 - 30 20 20 105 35 100 200 122,2 30,5 20,1 49,2 5,4 5,9 - 4,2 2,8 2,8 14,7 4,9 14,0 28,0 346,0 (3) 223,8 193,3 173,2 124,0 118,6 112,7 116,9 114,1 111,3 96,6 91,7 77,7 49,7 (1) The provisioning basis is calculated by applying the relevant guarantee cover rate, namely 70 % (EIB loans new mandates), 75 % (EIB loans old protocols) or 100 % (macro-financial assistance loan). (2) In accordance with the provisioning rules in Council Regulation (EC, Euratom) No 2728/94 of 31 October 1994, the Fund having reached its target amount on 31 December 1997, the provisioning rate has been reduced to 14 %. (3) Amount of the Reserve for loans and loan guarantees in favour of third countries for 1999 under the financial perspective. (4) Annual amounts of loans scheduled to be signed in 1999 and correction of amounts already provisioned in the Fund to take account of actual signings at the end of 1998: Transfer 5/99 to the Guarantee Fund. (5) Proposal for a Council Regulation on a special financial cooperation measure for Turkey (COM(95) 389/3). (6) EC/Croatia cooperation agreement (SEC(95) 180/final). (7) Commission proposal