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

BUDGETARY ASSESSMENT

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))

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 GDP in the first semester of 2023, driven by persistent deficits in trade in goods and 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 severe deterioration of external accounts and Jordan's strategic importance for regional stability justify this support package;

1. Notes that the Commission proposal of EUR 500 million in MFA requires EUR 45 million in provisioning under the External Action Guarantee from NDICI-Global Europe;

2. Notes that the assistance will be disbursed in three instalments between 2024 and 2027, with release strictly linked to progress with implementation of both the IMF 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 that require monitoring;

5. Acknowledges that the IMF assessed Jordan's public debt level as sustainable in its January 2024 report, while noting that debt sustainability risks remain significant;

6. Recalls that previous MFA operations to 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; stresses that a pre-condition for granting the Union's macro-financial assistance is that Jordan respects effective democratic mechanisms and guarantees respect for human rights;

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

9. Calls for proper monitoring and regular reporting to the European Parliament and 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.