Decision No 534/2014/EU of the European Parliament and of the Council of 15 May 2014 providing macro-financial assistance to the Republic of Tunisia

21.5.2014

EN

Official Journal of the European Union

L 151/9

(1)

Relations between the European Union and the Republic of Tunisia (‘Tunisia’) are developing within the framework of the European Neighbourhood Policy (ENP). The Euro-Med Association Agreement between the European Communities and their Member States, on the one hand, and Tunisia, on the other hand (2) (‘the EU-Tunisia Association Agreement’), entered into force on 1 March 1998. Under the EU-Tunisia Association Agreement, Tunisia finalised dismantling tariffs for industrial products in 2008, thereby making Tunisia the first Southern Mediterranean country to enter into a free trade area with the Union. Bilateral political dialogue and economic cooperation have been further developed within the framework of ENP Action Plans, of which the most recent under discussion would cover the period 2013-2017.

(2)

Tunisia’s economy has been significantly affected by domestic events related to the events in the Southern Mediterranean since the end of 2010, known as the ‘Arab Spring’, and by the regional unrest that followed, particularly in neighbouring Libya. Those events and the weak global economic environment, in particular the recession in the euro area, which is Tunisia’s main trading and financial partner, have had a very negative impact on the Tunisian economy, leading to a slowdown in growth and generating large external and budgetary financing gaps.

(3)

Following the ousting of President Ben Ali on 14 January 2011, Tunisia’s first free and democratic elections took place on 23 October 2011. A National Constituent Assembly has been in place since then, and although the political transition has not been without difficulties, there have been concerted efforts by the main political actors to proceed with reforms towards a fully-fledged democratic system.

(4)

The Constitution adopted by the National Constituent Assembly of Tunisia includes some advances in the field of individual rights and freedoms and gender equality, which set Tunisia on the path towards democracy and the rule of law.

(5)

Since the Arab Spring began, the Union has, on various occasions, declared its commitment to supporting Tunisia in its economic and political reform process. That commitment was reaffirmed in November 2012, in the conclusions of the meeting of the Association Council between the Union and Tunisia. The Union’s political and economic support for Tunisia’s reform process is consistent with the Union’s policy towards the Southern Mediterranean region, as set out in the context of the ENP.

(6)

In line with the Joint Declaration by the European Parliament and the Council adopted together with Decision No 778/2013/EU of the European Parliament and of the Council (3), Union macro-financial assistance should be an exceptional financial instrument of untied and undesignated balance-of-payments support, which aims at restoring a beneficiary’s sustainable external finance situation and should underpin the implementation of a policy programme containing strong adjustment and structural reform measures designed to improve the balance of payment position, in particular over the programme period, and reinforce the implementation of relevant agreements and programmes with the Union.

(7)

In April 2013, the Tunisian authorities and the International Monetary Fund (IMF) agreed on a non-precautionary three-year Stand-By-Arrangement (‘IMF programme’) of SDR 1 146 million (Special Drawing Rights) in support of Tunisia’s economic adjustment and reform programme. The objectives of the IMF programme are consistent with the purpose of the Union macro-financial assistance, namely to alleviate short-term balance of payment difficulties, and the implementation of strong adjustment measures is consistent with the aim of Union macro-financial assistance.

(8)

The Union has made available EUR 290 million in grants for the period 2011-2013 under its regular cooperation programme in support of Tunisia’s economic and political reform agenda. In addition, EUR 155 million has been allocated to Tunisia for the period 2011-2013 under the ‘Support for partnership, reforms and inclusive growth’ (SPRING) programme.

(9)

In August 2013, in view of the worsening economic situation and outlook, Tunisia requested Union macro-financial assistance.

(10)

Given that Tunisia is a country covered by the ENP, it should be considered to be eligible to receive Union macro-financial assistance.

(11)

Given that there is still a significant residual external financing gap in Tunisia’s balance of payments over and above the resources provided by the IMF and other multilateral institutions, and despite the implementation of strong economic stabilisation and reform programmes by Tunisia, the Union macro-financial assistance to be provided to Tunisia (‘the Union’s macro-financial assistance’) is, under the current exceptional circumstances, considered to be an appropriate response to Tunisia’s request to support economic stabilisation in conjunction with the IMF programme. The Union’s macro-financial assistance would support the economic stabilisation and the structural reform agenda of Tunisia, supplementing resources made available under the IMF financial arrangement.

(12)

The Union’s macro-financial assistance should aim to support the restoration of a sustainable external financing situation for Tunisia thereby supporting its economic and social development.

(13)

The determination of the amount of the Union’s macro-financial assistance is based on a complete quantitative assessment of Tunisia’s residual external financing needs, and takes into account its capacity to finance itself with its own resources, in particular the international reserves at its disposal. The Union’s macro-financial assistance should complement the programmes and resources provided by the IMF and the World Bank. The determination of the amount of the assistance also takes into account expected financial contributions from multilateral donors and the need to ensure fair burden sharing between the Union and other donors, as well as the pre-existing deployment of the Union’s other external financing instruments in Tunisia and the added value of the overall Union involvement.

(14)

The Commission should ensure that the Union’s macro-financial assistance is legally and substantially in line with the key principles, objectives and measures taken within the different areas of external action and other relevant Union policies.

(15)

The Union’s macro-financial assistance should support the Union’s external policy towards Tunisia. Commission services and the European External Action Service should work closely together throughout the macro-financial assistance operation in order to coordinate, and to ensure the consistency of, Union external policy.

(16)

The Union’s macro-financial assistance should support Tunisia’s commitment to values shared with the Union, including democracy, the rule of law, good governance, respect for human rights, sustainable development and poverty reduction, as well as its commitment to the principles of open, rule-based and fair trade.

(17)

A pre-condition for granting the Union’s macro-financial assistance should be that Tunisia respects effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and guarantees respect for human rights. In addition, the specific objectives of the Union’s macro-financial assistance should strengthen the efficiency, transparency and accountability of the public finance management systems in Tunisia and promote structural reforms aimed at supporting sustainable and inclusive growth, employment creation and fiscal consolidation. Both fulfilment of the pre-condition and the achievement of those objectives should be regularly monitored by the Commission.

(18)

In order to ensure that the Union’s financial interests linked to the Union’s macro-financial assistance are protected efficiently, Tunisia should take appropriate measures relating to the prevention of, and fight against, fraud, corruption and any other irregularities linked to the assistance. In addition, provision should be made for the Commission to carry out checks and for the Court of Auditors to carry out audits.

(19)

Release of the Union’s macro-financial assistance is without prejudice to the powers of the European Parliament and of the Council.

(20)

The amounts of the provision required for the Union’s macro-financial assistance should be consistent with the budgetary appropriations provided for in the multi-annual financial framework.

(21)

The Union’s macro-financial assistance should be managed by the Commission. In order to ensure that the European Parliament and the Council are able to follow the implementation of this Decision, the Commission should regularly inform them of developments relating to the assistance and provide them with relevant documents.

(22)

In order to ensure uniform conditions for the implementation of this Decision, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (4).

(23)

The Union’s macro-financial assistance should be subject to economic policy conditions, to be laid down in a Memorandum of Understanding. In order to ensure uniform conditions of implementation and for reasons of efficiency, the Commission should be empowered to negotiate such conditions with the Tunisian authorities under the supervision of the committee of representatives of the Member States in accordance with Regulation (EU) No 182/2011. Under that Regulation, the advisory procedure should, as a general rule, apply in all cases other than as provided for in that Regulation. Considering the potentially important impact of assistance of more than EUR 90 million, it is appropriate that the examination procedure be used for operations above that threshold. Considering the amount of the Union’s macro-financial assistance to Tunisia, the examination procedure should apply to the adoption of the Memorandum of Understanding, and to any reduction, suspension or cancellation of the assistance,

(a)

the pre-condition set out in Article 2;

(b)

a continuous satisfactory track record of implementing a policy programme that contains strong adjustment and structural reform measures supported by a non-precautionary IMF credit arrangement; and

(c)

the implementation, within a specific time-frame, of the economic policy and financial conditions agreed in the Memorandum of Understanding.

(a)

ensuring that Tunisia regularly checks that financing provided from the general budget of the Union has been properly used, takes appropriate measures to prevent irregularities and fraud, and, if necessary, takes legal action to recover any funds provided under this Decision that have been misappropriated;

(b)

ensuring the protection of the Union’s financial interests, in particular providing for specific measures in relation to the prevention of, and fight against, fraud, corruption and any other irregularities affecting the Union’s macro-financial assistance, in accordance with Council Regulation (EC, Euratom) No 2988/95 (9), Council Regulation (Euratom, EC) No 2185/96 (10) and Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (11);

(c)

expressly authorising the Commission, including the European Anti-Fraud Office, or its representatives to carry out checks, including on-the-spot checks and inspections;

(d)

expressly authorising the Commission and the Court of Auditors to perform audits during and after the availability period of the Union’s macro-financial assistance, including document audits and on-the-spot audits, such as operational assessments; and

(e)

ensuring that the Union is entitled to early repayment of the loan where it has been established that, in relation to the management of the Union’s macro-financial assistance, Tunisia has engaged in any act of fraud or corruption or any other illegal activity detrimental to the financial interests of the Union.

(a)

examine the progress made in implementing the Union’s macro-financial assistance;

(b)

assess the economic situation and prospects of Tunisia, as well as progress made in implementing the policy measures referred to in Article 3(1);

(c)

indicate the connection between the economic policy conditions laid down in the Memorandum of Understanding, Tunisia’s on-going economic and fiscal performance and the Commission’s decisions to release the instalments of the Union’s macro-financial assistance.