“Well just a few words to thank you very much for these interventions and for your broad support for our proposal. We hope indeed given the nature of the instrument that is meant to swiftly support countries in needs that we can proceed fast. As I said our objective will be to be able as much as possible to interlink the ongoing operation with this proposed operation so we would be keen for this to be considered swiftly indeed. And let me thank you very much again for your interventions and for your broad overall positive assessment from what I heard at least from these interventions. Thanks.”
European Globalisation Adjustment Fund · EU Development & Humanitarian Aid · Funding for EU Neighbourhood
“So thank you very much dear colleagues so indeed so I'll make a short presentation so as as as you know the commission made a proposal on the fifth of August for an additional macro financial assistance program to Jordan for an amount of five hundred million. Okay thank you very much. So this proposal was actually, we did already a small presentation at the end of September during the Mass Rate Monitoring Group and of course today we are happy here to make a further presentation. So as you have seen on the fifth of August, we made this proposal together with including a staff working document that explained the background and rationale for our proposal and the features of the envisaged operation. So precisely to dwell a little bit on the context and the rationale for this proposal where it comes at a time where we still have uncertainty and instability across the Middle East with a number of regional conflicts or tensions that put pressure on Jordan and underscore its vulnerability. So we consider it's very important to have new assistance to strengthen the resilience of the country. Of course the recent developments in the region give some reasons for hope for some stabilization but the situation remains highly fragile. So in terms of the economic situation, Jordan is a country that shows some modest resilience with a growth that is still of around two point five percent last year. This marks some resilience but at the same time it remains subdued compared with peers and insufficient to address very important structural vulnerabilities of the countries and also in a context where risks are tilted to the downside whether we talk about regional risks or global risks as well. To say a few more words about the country, so it's a country where unemployment remains very high especially among certain groups: young people, women, university graduates. It's a country also with important fiscal and external imbalances. In terms of fiscal deficits, it remains wide, about five percent of GDP. The public debt ratio is also around ninety percent of GDP. The current account deficit widened last year although this year we have signs that it's improved slightly and this is very much linked to a weak export base, high reliance on tourism revenues that have been hit by the, as I said, the uncertainty in the region and dependence on imports of energy and food products that has an overall negative impact on the external situation on the country. As I said, we have this context of tensions in the Middle East. The country also hosts still a significant number of refugees. They have started to return for significant amounts but latest UNHCR numbers confirm that there is still a very high presence of Syrian refugees in the country. And lastly, as I said, there are also important global uncertainties in order notably related to trade policies that represent an additional challenge for the country. So in this context, in this difficult and uncertain environment, it's clearly, we believe, in the EU interest to help Jordan address its vulnerabilities. It has a pivotal role for the stability of the region. This financial assistance is also important to support the reform agenda of Jordan. It has fairly recently adopted what is called the Modernization Vision in twenty-two which touches upon the economy but also importantly public administration reform and the country is currently in the process of updating its new executive work program for the years to come. So these macro financial assistance also support its important reform agenda. So now turning to the features of this new operation. So first let me say a few words about the preconditions. As you know for macro financial assistance, two important preconditions need to be met for the Commission to be in a position to propose such a program. So first, the country needs to have an ongoing disbursing IMF program and it is the case for Jordan. It has in fact two programs in place: an Extended Fund Facility that was adopted by the board already in January twenty-four and under which Jordan's performance is considered as strong. There has been already three reviews completed and a fourth one that is ongoing. There was a resubmission of the IMF in the country that was concluded with a staff level agreement and it will go to the board in December. The country also benefits from Resilience and Sustainability Facility arrangement that was approved more recently in June twenty-five to support reforms addressing climate related and pandemic preparedness risks that is running in parallel to the EFF and also with a favorable conclusion recently from the IMF mission in terms of the political precondition also important aspects. So as you will have seen from our proposal, it is confirmed as being, they are confirmed as being fulfilled. This assessment was prepared by our colleagues from the External Action Service. So now moving to the proposal itself. As I said, it's a proposal for a similar amount, five hundred million, to the one that is currently ongoing. It comes amid a request that we received from Jordan authorities last January for this complementary MFA. The objective, I said, is to address the important external financing needs of the country but also support the country addressing the root causes in terms of structural vulnerabilities and supporting the reform agenda of Jordan. Let me also recall that this comes in a context where the EU signed a strategic and comprehensive partnership in Jordan in January of this year. So in terms of how much the support would contribute to address the financing needs of the country, it should be noted that according to our analysis which is based on the IMF numbers and follow an established methodology, we estimate that the residual external financing gap of the country amounts to three point nine billion US dollars for the years twenty-five to twenty-seven. So this MFA operation would contribute to less than fifteen percent of this residual amount gap. So this is fully in line with our fair burden sharing principle that defines how we set MFA operations. The current MFA would, whether proposed MFA sorry, would run in parallel to the ongoing MFA operations. So the idea is that they would be complementary to each other, would build on each other and ideally we would like to be able to fully interlink the disbursements going ahead. In terms of conditionality, so areas of conditionality is very important. As you know, that MFA is a performance based instrument. So what we foresee to include reforms in the key pillars that are already the ones supporting the ongoing operations. So meaning to support public finance management measures in particular to strengthen public revenue mobilization but also on the expenditure side, governance and fight against corruption related measures. Also conditions in the area of social and labor market policies. As I said, this is important to address the vulnerabilities of the country and also to support the business environment, the green transition and utilities. So you will have seen all these four different pillars are already present in our ongoing operation. You can see a memorandum of for the MFA operation four which we signed also in the summer and that is available on our website. So with these few words I will stop here. Thank you very much for your attention and looking forward to your questions or reaction. Thanks.”
Debt relief for developing countries · EU-Jordan relations · EU Development & Humanitarian Aid