Brussels (Brussels Morning) – The European Commission recommends €500 million in Macro-Financial Assistance to Jordan, fostering economic stability, supporting reforms, and demonstrating EU solidarity amid regional challenges.
Today, the European Commission has adopted a recommendation for a new Macro-Financial Assistance (MFA) operation to Jordan amounting to up to €500 million. This financial backing is an important demonstration of the EU’s cooperation and solidarity with Jordan.
The proposed financial assistance seeks to help Jordan cover parts of its external financing needs, back the fiscal consolidation action and support structural reform measures, so that Jordan’s enterprising reform agenda can persist, boosting jobs, growth and investment.
According to the Press of Commission, Ursula von der Leyen, Commission President, stated: “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.”
How Is the EU Supporting Jordan’s Economy?
The new operation constructs on the three previous MFA programmes via which the EU has spent 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 schedules have helped the country address its critical financing needs, including in the context of the COVID-19 pandemic, sustained overall macroeconomic stability and were a critical driver of the implementation of transformative reforms.
What’s the Purpose of Macro-Financial Assistance?
MFA funds are made obtainable in the form of long-term loans at concessional phases. The allocation under this new process is planned to take place in three instalments. Disbursements under the offered MFA would be strictly dependent on the implementation of specific policy actions to be agreed between the EU and Jordan and put out in a Memorandum of Understanding, as well as thriving programme reviews under the IMF agenda. The MoU could, in principle, include procedure reforms addressing economic governance, including public finance management and tax management; social and labour market approach; and governance and battle against fraud, corruption and money laundering.
How Does EU Solidarity Benefit Jordan?
The EU’s backing to Jordan, including through MFA programmes, helps the country in mitigating the effect of the war in Syria and the resultant large number of refugees. Overall, the EU has already mustered around €4 billion for Jordan since the start of this crisis in 2011. This support is delivered in accordance with the EU-Jordan Partnership Priorities, as demonstrated during the fourteenth meeting of the Jordan-EU Association Council on 2 June 2022. These preferences are based on common values and exchange and promote reforms in spaces such as good governance, the rule of law, human rights, social cohesion and equal prospects for all, non-discrimination, environmental and climate security, macroeconomic stability and the business environment.
What’s the EU’s Role Amid Regional Instability?
MFA is characteristic of the EU’s wider concentration with neighbouring countries and is intended as an excellent EU crisis response instrument. It is available to augmentation and EU neighbourhood countries undergoing severe balance-of-payments problems. The enactment of the proposed operation is further completed by EU bilateral cooperation under the Neighbourhood, Development and International Cooperation Instrument- Global Europe (‘NDICI-GE’). The new MFA operation submitted for Jordan comes at a time of increased uncertainty and regional instability.
