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-PA-766591
Committee on Budgets · Rapporteur: Johan Van Overtveldt
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The Committee on Budgets assesses the Commission 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 provisioning, will be disbursed in three instalments between 2024 and 2027, and is the fourth MFA operation since 2014.¶¶¶ It stresses pre-conditions, monitoring, and reporting, and recalls the risk of diluting the instrument's emergency nature.¶¶¶
Committee position. The Committee on Budgets concludes that the proposal is compatible with the EU's budgetary framework and financial rules.¶
Key points
- Jordan faces significant external financing needs with a current account deficit of 7.1% of GDP in the first semester of 2023 and public debt at 88.7% of GDP in 2023.¶
- Jordan's domestic tax revenue is only 16% of GDP, raising concerns about fiscal sustainability.¶
- The severe deterioration of external accounts and Jordan's strategic importance justify the support package.¶
- The Commission proposal of EUR 500 million in MFA requires EUR 45 million in provisioning under the External Action Guarantee from NDICI-Global Europe.¶
- Assistance will be disbursed in three instalments between 2024 and 2027, linked to progress with the IMF programme and additional policy measures.¶
- This is the fourth MFA operation for Jordan since 2014, bringing total MFA support to EUR 1.58 billion.¶
- The loan structure includes a grace period and spreads repayments over a long period, creating extended contingent liabilities that require monitoring.¶
- The IMF assessed Jordan's public debt as sustainable in January 2024, but risks remain significant.¶
- Previous MFA operations to Jordan have a positive track record in repayment.¶
- A pre-condition for assistance is Jordan's respect for effective democratic mechanisms and human rights; regular verification of compliance is stressed.¶¶
- Proper monitoring and regular reporting to Parliament and Council on assistance developments and conditions are called for.¶
- Increasing use of MFA for structural challenges risks diluting its emergency nature.¶