EU approves 80 million euros in macro-financial assistance to Jordan

AMMAN – The European Commission, on behalf of the European Union (EU), has decided to disburse 80 million euros to Jordan in the form of a loan. 

The commission announced Friday that this is the second and final tranche of a 180 million-euro Macro-Financial Assistance (MFA) programme for the Kingdom as adopted by the European Parliament and the EU Council of Ministers on December 18, 2013. 

The first disbursement under this programme, amounting to 100 million euros, took place on February 10, 2015, said a statement posted on the website of the commission.

“Jordan is an important partner for the European Union and we are committed to helping the Jordanian people cope with the knock-on effects of the severe crises the Middle East is experiencing. Today’s decision is a further concrete sign of our solidarity. We are living up to our promise to support Jordan’s economic reforms to boost growth and job creation,” said commissioner Pierre Moscovici, responsible for economic and financial affairs, taxation and customs.  

This assistance comes in addition to other forms of EU support to Jordan that includes regular cooperation in Jordan’s reform efforts in areas such as energy policy, employment and private sector development, as well as the more than 300 million euros provided since the beginning of the Syrian crisis to help the country address its related humanitarian, development and security needs.

Macro-Financial Assistance is an exceptional EU crisis-response instrument available to EU neighbouring partner countries experiencing severe balance of payment problems. It is complementary to the assistance provided by the International Monetary Fund.

The MFA programme for Jordan is intended to strengthen the country’s foreign exchange reserve position and to alleviate its balance of payments and budgetary needs stemming from negative shocks caused by regional instability, including the interruption of gas supplies from Egypt and the Syrian crisis. 

The MFA programme is also intended to support reforms which aim at strengthening public finance management and the tax system, increasing social inclusiveness, improving the investment climate, enhancing energy efficiency and promoting economic integration with the EU. The memorandum of understanding with Jordan and the Loan Facility Agreement related to this assistance were signed in Brussels on March 18, 2014.

MFA loans are financed through EU borrowing on capital markets. The funds are then on-lent with similar terms to the beneficiary countries.

In addition to MFA, EU bilateral cooperation with Jordan (including 110 million euros of financial assistance in 2014) in the framework of the European Neighbourhood Policy is tackling a broad range of sectors, ranging from public finance management, technical and vocational education and training to the promotion of sustainable management of energy and natural resources, according to the statement.

The EC said that in response to the Syrian crisis, Jordan has received over 300 million euros in humanitarian and longer-term development assistance since 2012. 

“This provides for the most pressing needs and to help Jordan meet the burden of providing education for Syrian refugee children in the Jordanian state schooling system.”

In February 2015, the EC presented the first comprehensive strategy on tackling the crises in Syria and Iraq, bringing together initiatives that will mobilise 1 billion euros in funding for the next two years.