What changed

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a decision of the European Parliament and of the Council on providing macro-financial assistance to the Hashemite Kingdom of Jordan

(COM(2024)0159 – C90146/2024 – 2024/0086(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2024)0159),

– having regard to Article 294(2) and Article 212 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90146/2024),

having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to Rule 60 of its Rules of Procedure,

– having regard to the budgetary assessment by the Committee on Budgets,

– having regard to the opinion of the Committee on Foreign Affairs,

– having regard to the report of the Committee on International Trade (A10-0038/2025),

1. Adopts its position at first reading, taking over the Commission proposal;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

EXPLANATORY STATEMENT

In an increasingly challenging global economic context, Jordan faces persistent structural challenges compounded by significant external shocks. While the country has maintained moderate growth of around 2% in recent years, this level remains insufficient to address fundamental economic needs: reducing high unemployment (22.9% in 2022) and alleviating a substantial public debt burden (88.7% of GDP in 2023).

These domestic challenges are further exacerbated by heightened regional tensions, including the war between Israel and Gaza and ongoing instability in Syria, which are disrupting trade, straining public resources and jeopardizing key sectors such as tourism. Therefore, Jordan is facing a series of unfavorable factors with economic, political, social and demographic consequences, and must receive appropriate and rapid support as a reliable and stable partner of the EU. Moreover, the migratory pressure is very high in the Kingdom with 1.3 million refugees from Syria out of total of 3.8 million of refugees. It means 1/3 of the Kingdom population are refugees.

To support Jordan's economic stability and cover the country's residual financing needs over the operation's availability period, the Commission proposes a macro-financial assistance (MFA) operation of up to €500 million in loans, despite the Jordan’s request for €700 million.

This assistance is designed to address pressing economic challenges, including high public debt, a structurally elevated budget deficit (5.1% of GDP in 2023), and a persistent external deficits (average of around 6.5% of GDP over the last five years). It also aims to mitigate the fiscal constraints exacerbated by recent crises, such as the COVID-19 pandemic and regional instability.

The political and economic conditions necessary for granting the proposed MFA are fulfilled, as confirmed by the Commission’s evaluation of Jordan’s current situation. The loan will be provided under the External Action Guarantee with a provisioning at a rate of 9%, which will be programmed under the NDICI-GE, for a total amount of EUR 45 million. To ensure risk coverage, the EU will provision 9% of the total amount, or €45 million, under the External Action Guarantee.

The MFA will have a validity period of two and a half years following the entry into force of the Memorandum of Understanding (MoU). The disbursement of funds will occur in three tranches, contingent upon the full and timely implementation of the agreed-upon economic policies outlined in the MoU. These policies include ambitious reforms in key areas such as public governance, fiscal management, and anti-corruption efforts, ensuring that the assistance supports Jordan’s long-term economic resilience.

This assistance complements the ongoing IMF program approved in January 2024, which provides $1.2 billion over four years, and aligns with support from other international partners, including substantial U.S. grants. It also builds on Jordan’s track record with macro-financial assistance, being the fourth MFA operation since 2014, totaling €1.08 billion to date. These successive programs underscore the EU’s ongoing commitment to strengthening Jordan’s institutional capacity and promoting economic stability.

By addressing Jordan’s immediate financing needs and supporting reforms in key areas, the MFA reinforces the country’s economic resilience while contributing to regional stability. Subordinated to clear economic policy conditions, this assistance ensures accountability and progress. The full and timely implementation of these policies will remain a prerequisite for the disbursement of each tranche, ensuring that Jordan continues to meet its reform commitments.

Jordan is a key partner in the region, able to engage in dialogue with the various geopolitical players in the Middle East. It is important to give Jordan due consideration and not to take its support for granted. It is therefore important to build a global and strategic partnership with Jordan, alongside and in addition to this MFA, in order to quickly lay the foundations for tomorrow's collaboration.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur declares that she received input from the following entities or persons in the preparation of the report, prior to the adoption thereof in committee:

The list above is drawn up under the exclusive responsibility of the rapporteur.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur declares that she has submitted to the concerned natural persons the European Parliament's Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.

4.2.2025

BUDGETARY ASSESSMENT OF THE COMMITTEE ON BUDGETS

for the Committee on International Trade

on the proposal for a decision of the European Parliament and of the Council on providing macro-financial assistance to the Hashemite Kingdom of Jordan

(COM(2024)0159 – C90146/2024 – 2024/0086(COD))

Rapporteur for budgetary assessment: Johan Van Overtveldt

The Committee on Budgets has carried out a budgetary assessment of the proposal under Rule 58 of the Rules of Procedure and has reached the following conclusions:

A. whereas Jordan continues to face significant external financing needs and economic challenges, with a current account deficit of 7.1 % of gross domestic product (GDP) in the first half of 2023, driven by persistent deficits in trade in goods; whereas Jordan’s public debt burden remains high at 88.7 % of GDP in 2023, raising concerns about long-term fiscal sustainability;

B. whereas Jordan’s narrow revenue base, with domestic tax revenue at only 16 % of GDP, raises concerns about long-term fiscal sustainability and capacity to service external debts;

C. whereas the policy measures associated with macro-financial assistance (MFA) cover selected provisions related to the Association Agreement and the EU-Jordan Partnership Priorities 2021-2027;

D. whereas significant structural challenges hinder economic growth, with deficiencies in the business environment, access to finance, labour market flexibility and public administration; whereas unemployment remains high, especially among women, youth and university graduates, with women’s labour force participation at just 14 % in 2023, among the lowest globally; whereas the EU-Jordan Partnership Priorities 2021-2027 aim to address these issues by fostering decent work, innovation, skills development and comprehensive social protection systems;

E. whereas the EU-Jordan Partnership Priorities 2021-2027 highlight cooperation in inter-religious and intercultural dialogue and the protection of cultural heritage as drivers of peace and sustainable development; whereas these efforts can include safeguarding historical manuscripts and archives, contributing to inclusive dialogue and mutual understanding;

F. whereas Jordan’s economy has suffered significantly from protracted conflicts and crises in the region, notably in neighbouring Syria, and most recently in Israel/Gaza and the Red Sea; whereas these pose further risks to Jordan’s economic outlook, particularly affecting tourism and trade, with disruptions to exports and vessel traffic;

G. whereas the severe deterioration of external accounts and Jordan’s strategic importance for regional stability justify this support package;

H. whereas the conflicts in Gaza and the wider region have been exacerbating socioeconomic challenges in Jordan given its geographical position;

1. Notes that the Commission proposal of EUR 500 million in MFA requires EUR 45 million in provisioning under the External Action Guarantee from the Neighbourhood, Development and International Cooperation Instrument – Global Europe; points out that the evolving financial and economic realities in Jordan might require a revision of the proposed amount of MFA, consequently having an effect on provisioning;

2. Notes that the assistance will be disbursed in three instalments between 2024 and 2027, with release strictly linked to the progress of the implementation of both the International Monetary Fund programme and additional policy measures;

3. Recalls that this represents the fourth MFA operation for Jordan since 2014, bringing total MFA support to EUR 1.58 billion, demonstrating the EU’s sustained commitment to supporting Jordan’s economic stability;

4. Acknowledges that the loan structure includes a grace period and spreads repayments over a long period, creating extended contingent liabilities for the EU budget that require monitoring over multiple financial frameworks;

5. Acknowledges that the International Monetary Fund assessed Jordan’s public debt level as sustainable in its report of January 2024, while noting that debt sustainability risks remain significant;

6. Recalls that previous MFA operations for Jordan have demonstrated positive track records in terms of repayment;

7. Emphasises that the MFA underpins Jordan’s continued commitment to values shared with the Union, including democracy, rule of law, good governance and respect for human rights; highlights that these commitments are key to ensuring effective reforms and long-term stability; stresses that a precondition for granting the Union’s macro-financial assistance is that Jordan respects effective democratic mechanisms – including a multi-party parliamentary system – and guarantees respect for human rights;

8. Stresses the importance of the regular verification of Jordan’s compliance with the preconditions, ongoing conditionality and objectives to protect the EU’s financial interests and ensure the implementation of the MFA in accordance with the regulation;

9. Calls for proper monitoring and regular reporting to Parliament and the Council on developments relating to the assistance as well as the continuous monitoring of conditions and objectives;

10. Recalls that while MFA is meant to be an exceptional crisis response instrument, its increasing use to address structural economic challenges in partner countries risks diluting its emergency nature;

11. Concludes that the proposal for a decision on providing macro-financial assistance to Jordan is compatible with the EU’s budgetary framework and financial rules.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR FOR BUDGETARY ASSESSMENT HAS RECEIVED INPUT

The Chair in his capacity as rapporteur for budgetary assessment declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

PROCEDURE – COMMITTEE ASKED FOR BUDGETARY ASSESSMENT

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR BUDGETARY ASSESSMENT

31.1.2025

OPINION OF THE COMMITTEE ON FOREIGN AFFAIRS

for the Committee on International Trade

on the proposal for a decision of the European Parliament and of the Council on providing macro-financial assistance to the Hashemite Kingdom of Jordan

(COM(2024)0159 – C90146/2024 – 2024/0086(COD))

Rapporteur for opinion: Malik Azmani

AMENDMENTS

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR FOR THE OPINION HAS RECEIVED INPUT

PROCEDURE – COMMITTEE ASKED FOR OPINION

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

PROCEDURE – COMMITTEE RESPONSIBLE

FINAL VOTE BY ROLL CALL BY THE COMMITTEE RESPONSIBLE