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

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

BUDG-AD-766591

Committee on Budgets · Rapporteur: Johan Van Overtveldt

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The Committee on Budgets assessed the Commission's proposal for macro-financial assistance to Jordan and concludes it is compatible with the EU's budgetary framework. It notes the EUR 500 million assistance requires EUR 45 million in provisioning, will be disbursed in three instalments between 2024 and 2027, and stresses monitoring and compliance with preconditions.

Committee position. The Committee on Budgets concludes that the proposal is compatible with the EU's budgetary framework and financial rules, while noting concerns and calling for monitoring.

Key points

  1. Jordan faces significant external financing needs, with a current account deficit of 7.1% of GDP in the first half of 2023 and public debt at 88.7% of GDP in 2023.
  2. Domestic tax revenue is only 16% of GDP, and women's labour force participation is just 14% in 2023, highlighting structural challenges.
  3. The proposal of EUR 500 million in macro-financial assistance requires EUR 45 million in provisioning under the External Action Guarantee.
  4. Assistance will be disbursed in three instalments between 2024 and 2027, linked to progress on the IMF programme and additional policy measures.
  5. This is the fourth MFA operation for Jordan since 2014, bringing total support to EUR 1.58 billion.
  6. The loan structure includes a grace period and long repayment, creating extended contingent liabilities for the EU budget.
  7. The IMF assessed Jordan's public debt as sustainable in January 2024, but risks remain significant.
  8. A precondition for assistance is Jordan's respect for effective democratic mechanisms and human rights.
  9. Calls for proper monitoring and regular reporting to Parliament and the Council on the assistance and conditions.
  10. Notes that increasing use of MFA for structural challenges risks diluting its emergency nature.

Who is affected

  • Jordan: receives macro-financial assistance subject to conditions and monitoring.
  • EU budget: bears provisioning costs and contingent liabilities from the loan.

Figures and deadlines

  • EUR 500 million in macro-financial assistance proposed.
  • EUR 45 million in provisioning required.
  • Three instalments between 2024 and 2027.
  • EUR 1.58 billion total MFA support since 2014.
  • 7.1% current account deficit of GDP in first half of 2023.
  • 88.7% public debt of GDP in 2023.
  • 16% domestic tax revenue of GDP.
  • 14% women's labour force participation in 2023.