Decision No 778/2013/EU of the European Parliament and of the Council of 12 August 2013 providing further macro-financial assistance to Georgia

• CELEX: Decision No 778/2013/EU
• Articles: 8

Article 1

1.   The Union shall make macro-financial assistance available to Georgia of a maximum amount of EUR 46 million, with a view to supporting Georgia’s economic stabilisation and covering its balance of payments needs, as identified in the current IMF programme. Of that maximum amount, up to EUR 23 million shall be provided in the form of grants and up to EUR 23 million in the form of loans. The release of the Union’s macro-financial assistance shall be subject to the approval of the 2013 Union budget by the budgetary authority.

2.   The Commission shall be empowered to borrow the necessary resources on behalf of the Union in order to finance the loan component of the Union’s macro-financial assistance. The loan shall have a maximum maturity of 15 years.

3.   The release of the Union’s macro-financial assistance shall be managed by the Commission in a manner consistent with the agreements or understandings reached between the IMF and Georgia and with the key principles and objectives of economic reform set out in the EU-Georgia Partnership and Cooperation Agreement. The Commission shall regularly inform the European Parliament and the Economic and Financial Committee of developments in the management of the Union’s macro-financial assistance and provide them with relevant documents.

4.   The Union’s macro-financial assistance shall be made available for a period of two years and six months starting from the first day after the entry into force of the Memorandum of Understanding referred to in Article 2(1).

Article 2

1.   The Commission shall adopt, in accordance with the advisory procedure referred to in Article 6(2), a Memorandum of Understanding containing the economic policy and financial conditions to which the Union’s macro-financial assistance is subject, including a time-frame for the fulfilment of those conditions. The economic policy and financial conditions set out in the Memorandum of Understanding shall be consistent with the agreements or understandings referred to in Article 1(3). Those conditions shall aim, in particular, at strengthening the efficiency, transparency and accountability of the Union’s macro-financial assistance, including public finance management systems in Georgia. Progress in attaining those objectives shall be regularly monitored by the Commission. The detailed financial terms of the Union’s macro-financial assistance shall be laid down in the Grant Agreement and the Loan Agreement to be agreed between the Commission and the Georgian authorities.

2.   During the implementation of the Union’s macro-financial assistance, the Commission shall monitor the soundness of Georgia’s financial arrangements, the administrative procedures and the internal and external control mechanisms which are relevant to such assistance, as well as Georgia’s adherence to the agreed timeframe.

3.   The Commission shall verify at regular intervals that Georgia’s economic policies are in accordance with the objectives of the Union’s macro-financial assistance and that the agreed economic policy conditions are being satisfactorily fulfilled. To that end, the Commission shall coordinate closely with the IMF and the World Bank, and, where required, with the Economic and Financial Committee.

Article 3

1.   Subject to the conditions set out in paragraph 2, the Union’s macro-financial assistance shall be made available by the Commission in two instalments, each of them consisting of a grant and a loan element. The size of each instalment shall be laid down in the Memorandum of Understanding.

2.   The Commission shall decide on the release of the instalments subject to the satisfactory fulfilment of the economic policy and financial conditions agreed in the Memorandum of Understanding. The disbursement of the second instalment shall take place no earlier than three months after the release of the first instalment.

3.   The Union’s funds shall be paid to the National Bank of Georgia. Subject to provisions to be agreed in the Memorandum of Understanding, including a confirmation of residual budgetary financing needs, the Union’s funds may be transferred to the Treasury of Georgia as the final beneficiary.

Article 4

1.   The borrowing and lending operations relating to the loan component of the Union’s macro-financial assistance shall be carried out in euro using the same value date and shall not expose the Union to any transformation of maturities, to any exchange or interest rate risks, or to any other commercial risk.

2.   The Commission shall take the necessary steps, if Georgia so requests, to ensure that an early repayment clause is included in the loan terms and conditions and that it is matched by a corresponding clause in the terms and conditions of the Commission’s borrowing operations.

3.   Where circumstances permit an improvement of the interest rate of the loan and if Georgia so requests, the Commission may refinance all or part of its initial loan or may 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 maturity of the loan concerned or increasing the amount of capital outstanding at the date of the refinancing or restructuring.

4.   All costs incurred by the Union which relate to the borrowing and lending operations under this Decision shall be borne by Georgia.

5.   The Commission shall keep the European Parliament and the Economic and Financial Committee informed of developments in the operations referred to in paragraphs 2 and 3.

Article 5

The Union’s macro-financial assistance shall be implemented in accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union  ( 4 ) and its implementing rules  ( 5 ) . In particular, the Memorandum of Understanding, the Loan Agreement and the Grant Agreement to be agreed with the Georgian authorities shall provide for specific measures in relation to the prevention of, and the fight against, fraud, corruption and any other irregularities affecting the Union’s macro-financial assistance. In order to ensure greater transparency in the management and disbursement of funds, the Memorandum of Understanding, the Loan Agreement and the Grant Agreement shall also provide for checks, including on-the-spot checks and inspections, to be carried out by the Commission, including the European Anti-Fraud Office. Those documents shall also provide for audits, including where appropriate on-the-spot audits, by the Court of Auditors.

Article 6

1.   The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011.

2.   Where reference is made to this paragraph, Article 4 of Regulation (EU) No 182/2011 shall apply.

Article 7

1.   By 30 June of each year, the Commission shall submit to the European Parliament and to the Council a report on the implementation of this Decision in the preceding year, including an evaluation thereof. The report shall indicate the connection between the economic policy and financial conditions laid down in the Memorandum of Understanding, Georgia’s ongoing economic and fiscal performance and the Commission’s decisions to release the instalments of the Union’s macro-financial assistance.

2.   No later than two years after the expiry of the availability period referred to in Article 1(4), the Commission shall submit to the European Parliament and to the Council an ex post evaluation report.

Article 8

This Decision shall enter into force on the day of its publication in the Official Journal of the European Union .