Council Decision of 19 October 1992 providing further medium-term financial assistance for Bulgaria

• Articles: 5

Article 1

1. The Community shall grant to Bulgaria a medium-term loan facility of a maximum amount of ECU 110 million in principal, with a maximum 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 Bulgaria in the form of a loan.

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

Article 2

1. The Commission is empowered to negotiate with the Bulgarian 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) and with arrangements made by G-24.

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

Article 3

1. The loan shall be made available to Bulgaria in two instalments. The first instalment shall be released as soon as:

- the Bulgarian authorities have taken the necessary steps to allow the release of the amounts committed by non-Community G-24 countries in the context of the 1991 balance-of-payments support package;

- an agreement in principle has been reached between Bulgaria and its commercial bank creditors on a set of guidelines regarding a future debt restructuring package for that country.

2. Subject to a satisfactory outcome in the verification of the fulfilment of the economic policy conditions referred to in Article 2 (2), the second instalment shall be released when decisive progress has been made towards a comprehensive medium-term debt restructuring agreement between Bulgaria and its commercial bank creditors. Such payment may not take place before the second quarter of 1993.

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

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

3. At the request of Bulgaria, and where circumstances permit a reduction 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 Bulgaria.

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, 19 October 1992. For the Council

The President

J. COPE

(1) OJ No C 164, 1. 7. 1992, p. 32. (2) Opinion delivered on 18 September 1992 (not yet published in the Official Journal). (3) OJ No L 174, 3. 7. 1991, p. 36.