REPORT on the proposal for a Council decision providing macro-financial assistance to Bosnia and Herzegovina

16.11.2009 - (COM(2009)0596 – C7‑0278/2009 – 2009/0166(CNS)) - *

Committee on International Trade
Rapporteur: Iuliu Winkler
(Simplified procedure – Rule 46(1) of the Rules of Procedure)

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a Council decision providing macro-financial assistance to Bosnia and Herzegovina

(COM(2009)0596 – C7‑0278/2009 – 2009/0166(CNS))

(Consultation procedure)

The European Parliament,

–   having regard to the Commission proposal to the Council (COM(2009)0596),

–   having regard to Article 308 of the EC Treaty, pursuant to which the Council consulted Parliament (C7‑0278/2009),

–   having regard to Rules 55 and 46(1) of its Rules of Procedure,

–   having regard to the report of the Committee on International Trade (A7-0067/2009),

1.  Approves the Commission proposal;

2.  Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

3.  Asks the Council to consult Parliament again if it intends to amend the Commission proposal substantially;

4.  Instructs its President to forward its position to the Council and the Commission.

EXPLANATORY STATEMENT

1. Objectives of the proposal

The Commission proposes to provide macro-financial assistance (MFA) to Bosnia and Herzegovina amounting up to EUR 100 million in the form of a loan, that the Commission shall be empowered to borrow on the capital markets or from financial institutions. The assistance is planned to be made available in two instalments during 2010. It aims at supporting Bosnia and Herzegovina's economic stabilisation and financing its external balance-of-payments and budgetary needs as identified by the International Monetary Fund (IMF).

The proposed assistance will support the authorities' programme of necessary fiscal adjustments and structural reforms with a view to ensuring sustainable fiscal and external accounts and contributes also to helping Bosnia and Herzegovina to address the consequences of the global economic and financial crisis.

2. General context

The global economic crisis started to reveal its impact on Bosnia and Herzegovina in the last quarter of 2008. The slowdown continued in 2009 and the outlook for 2009 and beyond remains difficult. Faced with the deteriorating economic environment and the legacy of poor fiscal policies, the authorities of all government levels concluded in early May 2009 negotiations with the IMF on a Stand-By Arrangement (SBA) that comprised commitments to a number of structural reforms and fiscal adjustment measures. After prior action agreed with the IMF had been taken, the IMF Board approved on 8 July 2009 the EUR 1.15 billion loan for a three-year period. The first instalment of around EUR 203 million was disbursed immediately.

The amount of Community assistance corresponds to 77% of the residual financing needs of Bosnia and Herzegovina for the year 2010 in the context of the IMF programme, over and above macro-economic support provided by the IMF and the World Bank. The remaining part (EUR 30 million) will be covered by London Club debt deferment. This high burden sharing by the Community takes account of the current exceptional juncture, as the unfolding of the economic crisis is having a severe effect on Bosnia and Herzegovina's economy.

The proposal is complementary to the European Economic Recovery Programme and the Stabilisation and Association Process.

3. Timing constraints

This MFA proposal (as all past MFA proposals) has been referred to the Parliament under Article 308 of the EC Treaty, i.e. under consultation procedure. Although there is no deadline foreseen for Parliament's opinion under that Article, the Parliament has always been very quick in responding to the needs to provide MFA.

The current proposal was adopted by the Commission on 29 October 2009. However, shortly thereafter the last signatory Member State ratified the Treaty of Lisbon, which would presumably enter into force already on 1 December 2009. As the first instalment is planned to be disbursed already early 2010, a decision on adopting the current proposal has to be taken either before the entry into force of the Treaty of Lisbon or the Commission would have to present a proposal with modified legal basis.

Having carefully considered these options and considering Bosnia and Herzegovina 's strategic importance to the EU as a potential candidate country for EU accession, your rapporteur suggests adopting the current proposal exceptionally without amendments under the 'simplified procedure' before the entry into force of the Treaty of Lisbon.

Such timetable is not acceptable in a legislative procedure and it should not be seen as an exception to institutional powers, but it seems as the only viable option for ensuring transfer of EC funds to Bosnia and Herzegovina in due time. Stressing, however, that your rapporteur has not proposed any amendments for the above procedural reasons, and not because the proposal for the Decision would be perfect, and that this does not mean accepting the timing imposed by Commission's late proposal, but only tolerating it in these exceptional circumstances.

4. Parliament's role in providing MFA

Moreover, the rapporteur would also like to stress, in line with previous Parliament resolutions, that such a substantial instrument as MFA cannot be simply regarded as "exceptional". It is therefore unjustifiable that such an instrument lacks a regular legal basis and continues to be based on ad hoc Council decisions for each operation. A co-decided framework regulation on MFA is necessary in order to enhance transparency, accountability, monitoring and reporting systems.

In this respect it must be underlined that after the entry into force of the Treaty of Lisbon, the appropriate legal basis for a Decision granting MFA will be Article 209(1) and 212(2) of the Treaty on the Functioning of the European Union (TFEU), depending on whether the beneficiary country is classified as developing country or not by the Union institutions. In both cases, the ordinary legislative procedure applies. Article 213 TFEU should not apply to Decisions granting MFA.

Moreover, the role of the Parliament should be enhanced. In particular, the Commission should improve its reporting to Parliament as concerns the actual implementation of this aid instrument and provide Parliament with an ex post evaluation report (in addition to the annual reporting foreseen in Article 6 of the proposal).

5. Commitments by the Council and the Commission

Even if the proposal for MFA is accepted by the Committee without amendments, your rapporteur requests the Council and Commission to address the above concerns in statements to Parliament.

PROCEDURE

Title	Macro-financial assistance for Bosnia and Herzegovina
References	COM(2009)0596 – C7-0278/2009 – 2009/0166(CNS)
Date of consulting Parliament	13.11.2009
Committee responsible        Date announced in plenary	INTA
Committee(s) asked for opinion(s)        Date announced in plenary	AFET	BUDG
Not delivering opinions        Date of decision	AFET 11.11.2009	BUDG 12.11.2009
Rapporteur(s)        Date appointed	Iuliu Winkler 29.9.2009
Simplified procedure - date of decision	10.11.2009
Discussed in committee	10.11.2009
Date adopted	10.11.2009