The Council adopted its mandate, setting out its position for negotiations with the European Parliament, on a decision to provide up to €500 million in macro-financial assistance (MFA) to Jordan.
The EU assistance will bolster Jordan’s economic stability and support its ongoing reform agenda in the face of mounting internal and external challenges. It will help the country meet its outstanding external financing needs while creating the fiscal space necessary to sustain reform efforts.
The assistance, provided in response to Jordan’s request for additional support in October 2023, will be available for two and a half years and will be provided in the form of long-term loans, disbursed in three instalments.
New support under strict conditions
The assistance will be subject to a memorandum of understanding (MoU), to be agreed by Jordan with the Commission. The disbursement of instalments will be strictly linked to Jordan’s progress with the reforms outlined in the MoU. Furthermore, Jordan must continue to respect democratic mechanisms, the rule of law, and human rights throughout the programme’s duration.
The Commission and the European External Action Service (EEAS) will monitor the fulfilment of this precondition for the duration of the macro-financial assistance.
Economic pressures and regional instability
Despite stable economic growth of around 2% over the past five years (excluding the COVID-19 contraction in 2020), Jordan continues to face high unemployment, chronic external deficits, and public debt reaching 88.7% of GDP in 2023. Regional instability in the Middle East have further strained Jordan’s public finances and trade routes.
Since 2013, the EU has provided Jordan with €1.08 billion under three previous MFA programmes. The latest MFA-III programme (2020-2023) was initially set at €500 million and topped up by €200 million to mitigate the impact of the COVID-19 pandemic. These funds supported key reforms in public finance management, social and labour policy, and governance.
Next steps
The presidency of the Council will start negotiations with the European Parliament as soon as the latter has defined its position.
Background
On 8 April 2024, the Commission submitted the macro-financial assistance proposal to the Council.
The EU and Jordan have been linked by an Association Agreement since 2002. In 2022, they signed the Partnership Priorities, which aim to strengthen cooperation further and will guide the partnership until 2027. The EU’s support to Jordan 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.
Macro-financial assistance (MFA) is a form of financial aid extended by the EU to partner countries experiencing a balance of payments crisis. 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).
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Únicamente disponible, en estos momentos, en la(s) siguiente(s) lengua(s):
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EU’s Macro-Financial Assistance (MFA)
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EU-Jordan Partnership Priorities