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98 EN Official Journal of the European Communities C 302/5

(Preparatory Acts)

Proposal for a Council Decision providing macro-financial assistance to Albania

(98/C 302/05)

COM(1998) 507 final — 98/0273(CNS)

(Submitted by the Commission on 3 September 1998)

THE COUNCIL OF THE EUROPEAN UNION, Whereas Albania is undertaking fundamental reforms to
promote economic reform and build institutions with a
strong implementation capacity; whereas the focus of
Having regard to the Treaty establishing the European reforms will be strongly centred on institution-building,
Community, and in particular Article 235 thereof, on public administration and judicial reforms, on the
development of a strong and performing banking sector,
on the establishment of a functioning agricultural land
Having regard to the proposal of the Commission, market and accelerating enterprise privatisation; whereas
the Government is firmly committed to a speedy winding
up of the pyramid scheme companies and to combating
Having regard to the opinion of the European

Whereas the authorities of Albania have requested
Whereas the Commission has consulted the Monetary financial assistance for the first year of the medium-term
Committee before submitting its proposal; programme from the international financial institutions,
the Group of 24 industrialised countries (G-24), and the
Community; whereas over and above the estimated
Whereas Albania has made substantial progress on the financing which would be provided by the IMF and the
path to recovery from the effects of the economic and World Bank, an important residual financing gap
social crisis of early 1997; whereas it has successfully remains to be covered; whereas Paris Club rescheduling
implemented an economic recovery programme to and undisbursed pledges made at the Donors’
address the immediate effects of the crisis; Conference in October 1997 should help cover part of
the external financing needed during the first year of the
medium-term programme;
Whereas trade, commercial and economic links between
the Community and Albania are developing within the
framework of the Cooperation Agreement;
Whereas assistance from the Community shall be instru-
mental in supporting Albania’s institutional and
Whereas Albania has agreed with the International structural reforms; whereas a Community long-term loan
Monetary Fund (IMF) on a comprehensive set of stabili- to Albania is an appropriate measure to help ease the
sation and policy reform measures to be supported by a country’s external financial constraints, support the
loan under the Enhanced Structural Adjustment Facility balance of payments and strengthen the reserve position;

Whereas Albania has agreed with the World Bank on a Whereas Albania is a low-income country eligible to
set of measures supporting banking reform and highly concessional loans and facilities from the World
employment promotion, which are backed by a highly Bank and the IMF; whereas the Community will provide
concessional Rehabilitation Loan; whereas it is intended under the first year of the medium-term programme
that a Structural Adjustment Credit will support further ECU 19,5 million support to the budget in the form
structural adjustment measures; grants through the PHARE Special Assistance and the
C 302/6 EN Official Journal of the European Communities 1.10.98

Community Food Security programme; whereas, in these provisions of Article 2, the first instalment shall be
circumstances, the proposed ECU 20 million loan allows released on the basis of a successful completion of the
overall Community macro-financial support under the mid-term review of the first year of the programme
first arrangement under the ESAF to reach an appro- supported by a three-year ESAF arrangement between
priate degree of concessionality; the IMF and Albania.

Whereas the Community loan should be managed by the 2.ÚÙSubject to the provisions of Article 2, the second
Commission; instalment shall be released on the basis of a satisfactory
track record in the implementation of the ESAF
programme and not before one quarter after the
Whereas the Treaty does not provide, for the adoption disbursement of the first instalment.
of this decision, powers other than those of Article 235,

3.ÚÙThe funds shall be paid to the Central Bank of

Article 1
Article 4
1.ÚÙThe Community shall make available to Albania a
long-term loan facility of a maximum principal amount 1.ÚÙThe borrowing and lending operations referred to
of up to ECU 20 million with a maximum maturity of in Article 1 shall be carried out using the same value date
fifteen years, with a view to ensuring a sustainable and must not involve the Community in the trans-
balance of payments situation and consolidating the formation of maturities, in any exchange or interest rate
country’s reserve position. risks, or any other commercial risk.

2.ÚÙThe Commission shall take the necessary steps, if
2.ÚÙTo this end the Commission is empowered to
Albania so requests, to ensure that an early repayment
borrow, on behalf of the European Community, the
clause is included in the loan terms and conditions, and
necessary resources that will be placed at the disposal of
that it may be exercised.
Albania in the form of a loan.

3.ÚÙAt the request of Albania, and where circumstances
3.ÚÙThis loan will be managed by the Commission in permit an improvement in the interest rate on the loan,
close consultation with the Monetary Committee and in the Commission may refinance all or part of its initial
a manner consistent with any agreement reached borrowings or restructure the corresponding financial
between the IMF and Albania. 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
Article 2 the average maturity of the borrowing concerned or
1.ÚÙThe Commission is empowered to agree with the increasing the amount, expressed at the current exchange
authorities of Albania, after consultation with the rate, of capital outstanding at the date of the refinancing
Monetary Committee, the economic and institutional or restructuring.
policy conditions attached to the loan. These conditions
shall be consistent with the agreements referred to in 4.ÚÙAll related costs incurred by the Community in
Article 1(3). concluding and carrying out the operation under this
Decision shall be borne by Albania.
2.ÚÙThe Commission shall verify at regular intervals, in
collaboration with the Monetary Committee and in 5.ÚÙThe Monetary Committee shall be kept informed
coordination with the IMF, that the economic and insti- of developments in the operations referred to in
tutional policy in Albania is in accordance with the paragraphs 2 and 3 at least once a year.
objectives of this macro-financial assistance and that its
conditions are being fulfilled.
Article 5

Article 3 At least once a year the Commission shall address to the
European Parliament and to the Council a report, which
1.ÚÙThe macro-financial assistance shall be made will include an evaluation on the implementation of this
available to Albania in two instalments. Subject to the Decision.