The loans, which will be granted on very favorable terms and disbursed over one year, will help the following ten countries whose economies have been pushed into recession by the pandemic: the Republic of Albania (€180 million), Bosnia- Herzegovina (250 million euros million), Georgia (150 million euros), Hashemite Kingdom of Jordan (200 million euros), Kosovo (100 million euros), Republic of Moldova (100 million euros), Montenegro (60 million euros), the Republic of North Macedonia (160 million euros), the Republic of Tunisia (600 million euros) and Ukraine (1.2 billion euros).
The objective of the financing is to enable these countries to mitigate the negative social and economic effects of the crisis while preserving the financial stability of the State.
In order to speed up the disbursement of the aid, Parliament voted to approve it under the emergency procedure (defined in article 163 of the rules). The Council gave the green light to the package on May 5.
The decision was adopted by 547 votes for, 93 against and 47 abstentions.
Aid can begin to be disbursed once countries have signed their respective Memorandum of Understanding, which lists the terms of the loans. The European Commission expects the first tranche to be disbursed in autumn 2020 and the second and final tranche in early 2021.
The EU regularly disburses macro-financial assistance (MFA) to partner countries to help them manage their struggling balance of payments. The current proposal has a shorter duration than ordinary MFAs (one year instead of 2.5 years) and must be repaid in 15 years. Providing a massive loan package is a way for the EU to show solidarity with the EU neighborhood and the Eastern Partnership countries affected by the pandemic.
Recipient countries must have an ongoing program with the International Monetary Fund (IMF); EU support comes on top of IMF assistance to fight the recession caused, among other things, by a fall in tourism income, remittances, foreign direct investment and an outflow of portfolio capital.