Procedure : 2016/0197(COD)
Document stages in plenary
Document selected : A8-0296/2016

Texts tabled :

A8-0296/2016

Debates :

PV 23/11/2016 - 15
CRE 23/11/2016 - 15

Votes :

PV 24/11/2016 - 8.4
Explanations of votes

Texts adopted :

P8_TA(2016)0447

REPORT     ***I
PDF 535kWORD 76k
17.10.2016
PE 585.790v02-00 A8-0296/2016

on the proposal for a decision of the European Parliament and of the Council providing further macro-financial assistance to the Hashemite Kingdom of Jordan

(COM(2016)0431 – C8-0242/2016 – 2016/0197(COD))

Committee on International Trade

Rapporteur: Emmanuel Maurel

AMENDMENTS
DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 ANNEX: LETTER FROM THE COMMITTEE ON FOREIGN AFFAIRS
 ANNEX: LETTER FROM THE COMMITTEE ON BUDGETS
 PROCEDURE – COMMITTEE RESPONSIBLE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a decision of the European Parliament and of the Council providing further macro-financial assistance to the Hashemite Kingdom of Jordan

(COM(2016)0431 – C8-0242/2016 – 2016/0197(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–  having regard to the Commission proposal to Parliament and the Council (COM(2016)0431),

–  having regard to Article 294(2) and Article 212 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C8-0242/2016),

–  having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–  having regard to the Joint Declaration of the European Parliament and of the Council adopted together with Decision No 778/2013/EU of the European Parliament and of the Council of 12 August 2013 providing further macro-financial assistance to Georgia(1),

  having regard to the letter from the Committee on Foreign Affairs and the letter from the Committee on Budgets,

–  having regard to Rule 59 of its Rules of Procedure,

–  having regard to the report of the Committee on International Trade (A8-0296/2016),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment    1

Proposal for a decision

Article 1 – paragraph 1

 

Text proposed by the Commission

Amendment

1.  The Union shall make macro-financial assistance of a maximum amount of EUR 200 million available to Jordan ("the Union’s macro-financial assistance"), with a view to supporting Jordan’s economic stabilisation and a substantive reform agenda. The assistance shall contribute to covering Jordan’s balance of payments needs as identified in the IMF programme.

1.  The Union shall make macro-financial assistance of a maximum amount of EUR 350 million available to Jordan ("the Union’s macro-financial assistance"), with a view to supporting Jordan’s economic stabilisation and a substantive reform agenda. The assistance shall contribute to covering Jordan’s balance of payments needs as identified in the IMF programme.

Amendment    2

Proposal for a regulation

Article 3 – paragraph 1

Text proposed by the Commission

Amendment

1.  The Commission, in accordance with the examination procedure referred to in Article 7(2), shall agree with the Jordanian authorities on clearly defined economic policy and financial conditions, focusing on structural reforms and sound public finances, to which the Union’s macro-financial assistance is to be subject, to be laid down in a Memorandum of Understanding (‘the Memorandum of Understanding’). The economic policy and financial conditions set out in the Memorandum of Understanding shall be consistent with the agreements or understandings referred to in Article 1(3), including the macroeconomic adjustment and structural reform programmes implemented by Jordan with the support of the IMF.

1.  The Commission, in accordance with the examination procedure referred to in Article 7(2), shall agree with the Jordanian authorities on clearly defined economic policy and financial conditions, focusing on structural reforms and sound public finances, to which the Union’s macro-financial assistance is to be subject, which shall include a timeframe for the fulfilment of those conditions, to be laid down in a Memorandum of Understanding (‘the Memorandum of Understanding’). The economic policy and financial conditions set out in the Memorandum of Understanding shall be consistent with the agreements or understandings referred to in Article 1(3), including the macroeconomic adjustment and structural reform programmes implemented by Jordan with the support of the IMF.

Amendment    3

Proposal for a regulation

Article 4 – paragraph 4

Text proposed by the Commission

Amendment

4.  Where the conditions in paragraph 3 are continuously not met, the Commission shall temporarily suspend or cancel the disbursement of the Union’s macro-financial assistance. In such cases, it shall inform the European Parliament and the Council of the reasons for that suspension or cancellation.

4.  Where the conditions in paragraph 3 are not met, the Commission shall temporarily suspend or cancel the disbursement of the Union’s macro-financial assistance. In such cases, it shall inform the European Parliament and the Council of the reasons for that suspension or cancellation.

(1)

OJ L 218, 14.8.2013, p. 15.


EXPLANATORY STATEMENT

Owing to its geographical location, Jordan is one of the countries most directly affected by the Syrian crisis. Since 2011, its economy, based mainly on services and industry, has been significantly affected by the ongoing regional unrest.

Lower levels of tourism and foreign direct investment, blocked trade routes and repeated disruptions to the flow of natural gas from Egypt have put a drag on Jordan’s growth and weighed on its fiscal position. The conflict in Syria and Iraq has deprived Jordanian products of their traditional markets. In 2015, the persistence of the conflicts in the neighbouring countries continued to disrupt Jordan’s foreign trade: growth slowed (2.4%) and residual external financing needs for 2016-2017 are estimated at about USD 3.2 billion. In the first half of 2016, unemployment was very high, affecting 14.6% of the active population (33% of young people and 23.7% of women).

Despite the difficult circumstances, Jordan has taken in a large number of displaced persons. Together with Lebanon, it has welcomed more refugees in proportion to its population than any other country in the world, and has undertaken to facilitate access to employment for Syrians – 650 000 Syrians are officially registered as refugees but the Jordanian authorities talk of up to 1.4 million being present in their territory. Overall, the number of non-Jordanian residents has doubled in five years. The vast majority of them are not in camps but in urban areas, which is putting great pressure on Jordan’s public services, including health and education. Jordan’s debt rose to 93.4% of GDP at the end of 2015.

Jordan has a young but increasingly close partnership with the European Union, its second largest trading partner. An association agreement was signed in 1997 (entering into force in 2002), and in 2010 Jordan progressed to an ‘advanced status’ partnership. A preparatory process for a Deep and Comprehensive Free Trade Area (DCFTA) was launched in 2011. Given the crisis and in order to cover the country’s residual external financing needs, the EU has already granted EUR 180 million in macro-financial assistance to Jordan (decision taken in 2013; disbursements made in 2015). The EU must continue to help Jordan meet the challenges it is facing.

At the major donors’ conference in London on 4 February 2016 (‘Supporting Syria and the Region’), the international community undertook to implement a genuine comprehensive support plan for Jordan. A total of USD 10 billion was pledged. Of this amount, the EU pledged EUR 2.39 billion, including a EUR 200 million loan for a second Macro-Financial Assistance (MFA) operation in the context of the new EU-Jordan Compact. This will supplement the grants mobilised under the European Neighbourhood Initiative and the budget support packages being implemented by the EU. As Jordan has now met the democratic conditionalities (recent progress has been made with the establishment of a constitutional court and an independent electoral commission) and macro-economic conditionalities necessary for MFA to be granted, the operation can go ahead.

Given the economic difficulties facing Jordan, the EU must show support for its partner, whose policy of welcoming refugees is commendable. Your rapporteur would therefore like the macro-financial assistance programme to be put into effect as soon as possible in order to provide tangible benefit to Jordan at this critical juncture. Your rapporteur suggests that the Commission negotiate flexibly and intelligently with the Jordanian authorities over the Memorandum of Understanding and, in the relevant international forums and through specific action, seek solutions to alleviate Jordan’s rapidly escalating debt burden.

Parliament is assuming that this micro-financial assistance to Jordan will be implemented in line with the good practices currently applicable to the macro-financial assistance instrument and, in particular, that no specific timeframe will be imposed on Jordan for implementing the conditions set out in the Memorandum of Understanding concluded between the EU and Jordan.


ANNEX: LETTER FROM THE COMMITTEE ON FOREIGN AFFAIRS

Ref.: D (2016)37818

Mr Bernd Lange

Chair of the Committee on International Trade (INTA)

Subject:  Macro-Financial Assistance to the Hashemite Kingdom of Jordan - COM(2016) 431 final 2016/0197 (COD)

Dear Mr Lange,

As endorsed by the coordinators of the Foreign Affairs (AFET) Committee and in order to allow for a swift process on this proposal, I have the honour in my capacity as Chair of AFET to convey, by means of the present letter, the opinion of our Committee on the proposal for a decision of the European Parliament and of the Council providing further Macro-Financial Assistance to the Hashemite Kingdom of Jordan.

The AFET Committee fully supports the EC proposal. As you know, Jordan is an important partner country for the EU with strong economic ties. In 2014, the EU was Jordan’s second largest trading partner. Political and security relations are also significant: Jordan's geographical position makes it a strategic country for stability and security in the region. Allow me to underline Jordan's strategic role in the anti-ISIS coalition and its extended efforts in both security and intelligence fields.

Since the beginning of the Syrian crisis in 2011, the country is hosting a large number of Syrian refugees (around 1.3 million), but also Iraqis, Libyans and Yemenis, which puts increased pressure on its economy, its public services and infrastructures. Jordan is therefore particularly vulnerable to the current instability the region is facing, both in political and economic terms. Jordan needs to remain stable for the future of the region and deserve a deployment of all means that will contribute to maintain this crucial stability.

Therefore, the AFET Committee is welcoming the proposal for the second MFA and also the fact it would be part of the so-called EU-Jordan Compact. The latter is an utmost initiative, containing precise commitments on both sides (including financial assistance from the EU) and addressing, at the same time, a number of policy priorities. The Committee is reiterating the need to establish a stronger partnership between EU and Jordan in the political, security, trade and cooperation fields. In that context, it welcomes the declarations made by HR/VP Mogherini on 20 July during the 10th EU-Jordan Association Committee. In addition, we particularly welcome the pre-condition for granting this MFA (as indicated in the proposal p.11, paragraphs 19 and 20) that Jordan should respect effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and guarantee respect for human rights.

The AFET Committee believes that the EU and the International Financial Institutions should provide the necessary support to Jordan in order to ensure stability for the country itself and for the region. As Chair of the Committee, I reiterate the importance to provide the appropriate support to the Kingdom and to pursue further political and economic dialogue between the European Union and Jordan.

I am confident that the INTA Committee will duly take into account this position when adopting its position as well as during negotiations with the Council.

Yours sincerely,

Elmar Brok

CC:  Ms Marisa Matias, Chair of the Delegation for the relations with the Mashreq countries

  Mr Emmanuel Maurel, Rapporteur


ANNEX: LETTER FROM THE COMMITTEE ON BUDGETS

D(2016) 40152

Mr Bernd Lange

Chair

Committee International Trade

                ASP 12G205

Subject:   Proposal for a decision of the European Parliament and of the Council providing further macro-financial assistance to the Hashemite Kingdom of Jordan

Dear Chair,

The Committee on International Trade is preparing a report on the proposal for a decision of the European Parliament and of the Council providing further macro-financial assistance to the Hashemite Kingdom of Jordan 2016/0197 (COD), for an amount of EUR 200 million.

The coordinators of the Committee on Budgets decided to submit a position by letter instead of a formal opinion.

On an official mission to Jordan in May 2016, a delegation of the Committee on Budgets had indeed a chance to examine not only the strain put by the influx of refugees on Jordan's resources, but also the wider range of economic and financial consequences of the Syrian crisis and of regional instability. Members praised the country's and host communities' resilience in the face of these challenges, and stressed the pivotal role it should continue to play in improving the refugees' living conditions and in stabilising the region.

The BUDG delegation, which reported to the whole committee upon its return, took note that the Union had stepped up its financial assistance in Jordan in the context of the Syrian crisis, reaching an amount of EUR 293,6 million committed in 2016. This support is channelled via a number of instruments and mechanisms, mostly the European Neighbourhood Instrument (EUR 140 million in 2016) but also humanitarian aid (EUR 53 million), the Instrument contributing to Stability and Peace (21,8 million), the Development Cooperation Instrument (EUR 13 million), the European Instrument for Democracy and Human Rights (EUR 0,8 million) and, last but not least, the 'Madad' Trust Fund in response to the Syrian crisis (EUR 65 million). In addition, given the direct pressure on Jordan’s public finances, a first package of macro-financial assistance (MFA) loans was indeed agreed in 2013 and disbursed in 2015.

The BUDG delegation noted that the international community, including the Union, pledged further financial efforts at the conference on 'Supporting Syria and the Region' held in London on 4 February 2016. In return, Jordan presented a number of measures that it was prepared to take in order to bring more children in education and to create job opportunities for refugees. The Union, for its part, subsequently engaged in the negotiation of ‘compacts’ of mutual commitments with Jordan.

Keen on a rigorous assessment of the actual needs, the Committee on Budgets therefore concludes as follows.

The present MFA II package should be adopted swiftly as part of the commitments taken at the London conference in order to strengthen the resilience of the country and host communities. Meanwhile, the Commission should also demonstrate that it can deliver quickly and efficiently on the London pledge.

In parallel, the Union should make sure that Jordan delivers on improving refugees’ access to education and to the job market. Jordan should also contribute to finding a solution for the refugees currently stranded, without adequate humanitarian assistance, at the border between Syria and Jordan.

While the Jordanian authorities requested a new MFA of EUR 350 million, 'the room for manoeuvre available in the EU budget' should not be used by the Commission as one of the justifications for reducing the amount to EUR 200 million. Fully aware of the current shortage of available funds in heading 4 (Global Europe), the Committee on Budgets notes that the 9% provisioning of the External Guarantee Fund (EUR 6,75 million annually over two years) could probably be accommodated without affecting other policies in the financial planning of a budget line which, in the present state of the Multiannual Financial Framework, is expected to stand at more than EUR 220 million annually in the upcoming years. In a fast-changing environment, the Committee on Budgets therefore expects the Commission to confirm or update its assessment of the country's residual external financing needs before the conclusion of the legislative procedure on this MFA II package.

Yours sincerely,

Jean Arthuis


PROCEDURE – COMMITTEE RESPONSIBLE

Title

Macro-financial assistance to the Hashemite Kingdom of Jordan

References

COM(2016)0431 – C8-0242/2016 – 2016/0197(COD)

Date submitted to Parliament

29.6.2016

 

 

 

Committee responsible

       Date announced in plenary

INTA

7.7.2016

 

 

 

Committees asked for opinions

       Date announced in plenary

AFET

7.7.2016

BUDG

7.7.2016

 

 

Not delivering opinions

       Date of decision

AFET

12.7.2016

BUDG

7.10.2016

 

 

Rapporteurs

       Date appointed

Emmanuel Maurel

13.7.2016

 

 

 

Discussed in committee

31.8.2016

26.9.2016

 

 

Date adopted

13.10.2016

 

 

 

Result of final vote

+:

–:

0:

31

1

2

Members present for the final vote

Laima Liucija Andrikienė, Maria Arena, Tiziana Beghin, David Campbell Bannerman, Daniel Caspary, Salvatore Cicu, Santiago Fisas Ayxelà, Christofer Fjellner, Jude Kirton-Darling, Bernd Lange, David Martin, Emma McClarkin, Anne-Marie Mineur, Sorin Moisă, Alessia Maria Mosca, Franz Obermayr, Artis Pabriks, Franck Proust, Viviane Reding, Inmaculada Rodríguez-Piñero Fernández, Matteo Salvini, Marietje Schaake, Helmut Scholz, Joachim Schuster, Joachim Starbatty, Adam Szejnfeld, Hannu Takkula, Iuliu Winkler

Substitutes present for the final vote

Dita Charanzová, Edouard Ferrand, Agnes Jongerius, Sander Loones, Fernando Ruas, Lola Sánchez Caldentey

Date tabled

17.10.2016

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