Brussels, 8 April 2024
The European Commission has today adopted a proposal for a new Macro-Financial Assistance (MFA) operation to Jordan worth up to €500 million. This financial support is an important demonstration of the EU’s partnership and solidarity with Jordan. The proposed financial assistance aims to help Jordan cover part of its external financing needs, support the fiscal consolidation effort and support structural reform efforts, so that Jordan’s ambitious reform agenda can continue, promoting jobs, growth and investment.
Ursula von der Leyen, Commission President, said: “Today’s proposal is a clear sign of the EU’s continued solidarity with Jordan. With up to €500 million, we will support Jordan in these difficult times of geopolitical instability. And we will help ensure that Jordan’s transformative reforms for jobs, growth and investment can continue.”
The new operation builds on the three previous MFA programmes through which the EU has disbursed a total of €1.08 billion to Jordan since 2013. The final disbursement to Jordan under the last MFA operation took place in May 2023. Past MFA programmes have helped the country address its urgent financing needs, including in the context of the COVID-19 pandemic, supported overall macroeconomic stability and were a key driver of the implementation of transformative reforms.
MFA funds are made available in the form of long-term loans at concessional terms. The disbursement under this new operation is planned to take place in three instalments. Disbursements under the proposed MFA would be strictly conditional on the implementation of specific policy measures to be agreed between the EU and Jordan, and set out in a Memorandum of Understanding, as well as successful programme reviews under the IMF programme. The MoU could, in principle, include policy reforms addressing economic governance, including public finance management and tax administration; social and labour market policy; and governance and fight against fraud, corruption and money-laundering.
The Commission’s proposal for a fourth MFA with Jordan is subject to the approval of the European Parliament and the Council.
Background
MFA is part of the EU’s wider engagement with neighbouring countries and is intended as an exceptional EU crisis response instrument. It is available to enlargement and EU neighbourhood countries experiencing severe balance-of-payments problems. The implementation of the proposed operation is further complemented by EU bilateral cooperation under the Neighbourhood, Development and International Cooperation Instrument- Global Europe (‘NDICI-GE’).
The new MFA operation proposed for Jordan comes at a time of increased uncertainty and regional instability.
EU-Jordan relations
The EU’s support to Jordan, including through MFA programmes, assists the country in mitigating the impact of the war in Syria and the resulting large number of refugees. Overall, the EU has already mobilised around €4 billion for Jordan since the beginning of this crisis in 2011. This support is provided in accordance with the EU-Jordan Partnership Priorities, as confirmed during the fourteenth meeting of the Jordan-EU Association Council on 2 June 2022. These priorities are based on common values and dialogue, and promote reforms in areas such as good governance, the rule of law, human rights, social cohesion and equal opportunities for all, non-discrimination, environmental and climate protection, macroeconomic stability and the business environment.
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Quote(s)
Today’s proposal is a clear sign of the EU’s continued solidarity with Jordan. With up to €500 million, we will support Jordan in these difficult times of geopolitical instability. And we will help ensure that Jordan’s transformative reforms for jobs, growth and investment can continue.
The proposal for a new Macro-Financial Assistance operation worth up to €500 million reflects the crucial importance of our relationship with Jordan, a major partner and a key actor in the Middle East. In difficult times for the region, the EU stays committed to further support Jordan’s ongoing modernisation process, its efforts to promote an inclusive and sustainable growth, and enhance resilience to economic shocks.
With today’s proposal, the EU shows its strong commitment to sustain its support to Jordan during these exceptional times. The assistance will help ensure that Jordan keeps the reform momentum in line with its economic modernisation vision. It will also help to stimulate inclusive and sustainable growth to the benefit of the people in Jordan.
Today’s proposed new programme for macro-financial assistance to Jordan is another sign of EU’s continued support to a close partner, currently facing increasing regional challenges. It is a key addition to the large assistance package of around EUR 4 billion already provided since 2011. The upcoming ‘EU-Jordan Business Forum’ to be held in Amman in June is another mark of our efforts to support Jordan’s economy by boosting EU investments and increasing Jordanian exports into the EU.
Source – EU Commission