91/510/EEC: Council Decision of 23 September 1991 providing a medium-term loan to Algeria

• Articles: 5

Article 1

1. The Community shall grant to Algeria a medium-term loan facility of a maximum amount of ECU 400 million in principal, with a maximum duration of seven years, with a view to ensuring a sustainable balance-of-payments situation, strengthening the reserve position, and facilitating the introduction of convertibility for the national currency.

2. To this end, the Commission is empowered to borrow, on behalf of the European Economic Community, the necessary resources that will be placed at the disposal of Algeria 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 Agreements reached between the IMF and the World Bank, and Algeria.

Article 2

1. The Commission is empowered to negotiate with the Algerian authorities, after consultation with the Monetary Committee, the economic policy conditions 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 collaboration with the Monetary Committee and in close coordination with the IMF and the World Bank, that the economic policy in Algeria 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 Algeria in two instalments. The first instalment shall be released on the basis:

- of the IMF 'Standby Arrangement' and the World Bank structural adjustment loan agreed in June 1991 with Algeria,

- of an arrangement between Algeria and its commercial bank creditors on improving the country's future debt servicing and repayment profile through new loans and/or new refinancing agreements.

2. The second instalment shall be released after a period of at least two quarters subject to the provisions of Article 2 (2).

3. The funds shall be paid to the National Bank of Algeria.

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 Algeria so decides, to include in the loan conditions, and also to exercise, an early repayment clause.

3. At the request of Algeria, 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 Algeria.

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 Brussels, 23 September 1991. For the Council

The President

P. BUKMAN

(1) OJ No C 192, 23. 7. 1991, p. 23. (2) OJ No C 240, 16. 9. 1991, p. 245.