EC proposes €750 million macro-financial assistance for Western Balkan countries

European Commission; Photo: European Union

BRUSSELS – The Commission has adopted a proposal for a €3 billion macro-financial assistance (MFA) package to ten enlargement and neighbourhood partners to help them to limit the economic fallout of the coronavirus pandemic. Out of the proposed sum, €750 million will go to the Western Balkan countries.

The proposal, following a preliminary assessment of financing needs, provides €180 million for Albania, €250 million for Bosnia and Herzegovina, €100 million for Kosovo, €60 million for Montenegro and €160 million for North Macedonia.

Other €2.25 billion will be allocated to Jordan, Tunisia, Moldova, Georgia and Ukraine.

According to the European Commission, Serbia was notified of the about the possibility of funding, but decided not to apply for IMF’s urgent liquidity assistance, a precondition for receiving MFA, N1 reports.

The MFA funds will be made available for 12 months in the form of loans on highly favourable terms to help these countries cover their immediate, urgent financing needs. Together with the International Monetary Fund’s support, the funds can contribute to enhancing macroeconomic stability and creating space to allow resources to be allocated towards protecting citizens and mitigating the coronavirus pandemic’s negative socio-economic consequences. This instrument also remains available for other eligible countries experiencing balance-of-payments difficulties.

The proposal comes on top of the ‘Team Europe’ strategy, the EU’s response to support partner countries’ efforts in tackling the coronavirus pandemic. According to the press release, it represents an important demonstration of the EU’s solidarity with these countries at a time of unprecedented crisis.

“Supporting our neighbours is essential during this time of crisis to keep the entire region stable. As part of the EU’s global response to the coronavirus pandemic, we need to help our neighbouring countries to cushion the worst of its economic impact. These ‘crisis MFA programmes’ will assist 10 countries in ensuring macro-economic stability and protecting their people and companies during the crisis”, said Valdis Dombrovskis, Executive Vice-President of the European Commission for An Economy that Works for People.

According to the Commissioner for Economy Paolo Gentiloni, European solidarity must not stop at the borders of the Union.

“Because in this global crisis, we stand or fall together. Today the European Commission is taking a decisive step to help ten of our neighbours in their fight against the Coronavirus. I call on the European Parliament and the Council to swiftly agree this important package”, he said.

The Commission’s proposal is subject to adoption by the European Parliament and the Council of the EU. Given the urgent need for this support, the Commission counts on the cooperation of the co-legislators to ensure swift adoption of the proposal, the press release reads.

Following the adoption of the proposal, the Commission stands ready to disburse the first instalment as swiftly as possible after the adoption of the MFA decision and upon the agreement on a Memorandum of Understanding with each partner country. The second instalment could be disbursed in the fourth quarter of 2020 or in the first half of 2021, provided that the policy measures attached to it have been implemented in a timely manner.