EU neighbours commit to public finance reforms in deals with union

12 Aug 20

The EU is sending billions of euros to help neighbouring countries through the Covid-19 pandemic, with conditions encouraging them to strengthen their public finances and rule of law.

web_european-commission_shutterstock_331269449.png

European Commission building

The European Commission building

 

Eight countries have so far agreed memoranda of understanding with the union, with two more currently in negotiations, and the total package will come to €3bn.

The European Commission, which agreed the deals on behalf of the EU, said the programmes demonstrate “solidarity with these countries at a time of unprecedented crisis”.

“Supporting our neighbours is essential during this time of crisis to keep the entire region stable,” said Valdis Dombrovskis, who leads the commission’s work on building a ‘people-oriented economy’.

“As part of the EU’s global response to the coronavirus pandemic, we are working to help our neighbouring countries to cushion the worst of its economic impact.”

The commission will take loans with a maximum average maturity of 15 years on the capital markets or from financial institutions and to on‐lend them to the beneficiaries.

The money is aimed at helping Albania, Georgia, Jordan, Kosovo, Moldova, Montenegro, North Macedonia and Ukraine, with negotiations ongoing with Bosnia and Herzegovina and Tunisia, implement economic and political reforms.

Many of these, particularly in the western Balkans, are candidates for EU membership, but others are seen by the union as being within the “neighbourhood”, and are occasionally supported through aid and other programmes.

Ukraine will receive the largest amount (€1.2bn), and its conditions include strengthening public finance management, governance, rule of law, competition in its energy sector and its management of state-owned enterprises.

Conditions for some of the other countries include enhancing social protection schemes, fighting corruption, better management of utilities, addressing youth unemployment and enhancing the business environment.

“The Covid-19 pandemic knows no borders and its unprecedented economic and social impacts affect countries around the world,” said Paolo Gentiloni, commissioner for economy.

“Our enlargement and neighbourhood partners are severely affected, and as a union we have the financial strength to help them limit the economic fallout of the pandemic.”

Did you enjoy this article?

Related articles

Have your say

Newsletter

CIPFA latest

Most popular

Related jobs

Most commented

Events & webinars