91/310/EEC: Council Decision of 24 June 1991 providing further medium-term financial assistance for Hungary

• Articles: 5

Article 1

1. The Community shall grant to Hungary a medium-term loan facility of a maximum amount of ECU 180 million in principal, with a maximum average duration of seven years, with a view to ensuring a sustainable balance-of-payments situation and strengthening the reserve position.

2. To this end, the Commission is empowered to borrow, on behalf of the Community, the necessary resources that will be placed at the disposal of Hungary in the form of a loan.

3. This loan will be managed by the Commission in full consultation with the Monetary Committee and in a manner consistent with any Agreement reached between the IMF and Hungary.

Article 2

1. The Commission is empowered to negotiate with the Hungarian authorities, after consultation with the Monetary Committee, the economic policy conditions attached to the loan. These conditions shall be consistent with any agreement as referred to in Article 1 (3) and with arrangements made by the Group of 24.

2. The Commission shall verify at regular intervals, in collaboration with the Monetary Committee and in close coordination with the Group of 24 and the IMF, that the economic policy in Hungary is in accordance with the objectives of this loan and that its conditions are being fulfilled.

Article 3

1. The loan shall be made available to Hungary in two instalments. The first instalment shall be released as soon as an Extended Arrangement has been concluded between Hungary and the IMF and the second instalment after a period of at least two quarters, subject to Article 2 (2).

2. The funds shall be paid to the National Bank of Hungary.

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 risk, or in any other commercial risk.

2. The Commission shall take the necessary steps, if Hungary so decides, to include in the loan conditions, and also to exercise, an early repayment clause.

3. At the request of Hungary, and where circumstances permit an improvement in the interest rate on the loans, the Commission may refinance all or part of its initial borrowings or restructure the corresponding financial conditions. Refinancing 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 duration 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.

4. All related costs incurred by the Community in concluding and carrying out the operation under this Decision shall be borne by Hungary.

5. The Monetary 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, on the implementation of this Decision. Done at Luxembourg, 24 June 1991. For the Council

The President

J.-C. JUNCKER

(1) OJ No C 97, 13. 4. 1991, p. 8. (2) OJ No C 158, 17. 6. 1991. (3) OJ No L 58, 7. 3. 1990, p. 7.