(Consultation procedure)

The European Parliament,

–   having regard to the Commission proposal to the Council (COM(2007)0476),

–   having regard to Article 308 of the EC Treaty, pursuant to which the Council consulted Parliament (C6-0290/2007),

–   having regard to Rule 51 and Rule 83(7) of its Rules of Procedure,

–   having regard to the report of the Committee on International Trade and the opinions of the Committee on Foreign Affairs and the Committee on Budgets (A6-0452/2007),

1.  Approves the Commission proposal as amended;

2.  Calls on the Commission to alter its proposal accordingly, pursuant to Article 250(2) of the EC Treaty;

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

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

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

Text proposed by the Commission   Amendments by Parliament Amendment 1 Recital - 1 (new) (-1) It is in the European Union's interest to reinforce the sovereignty, territorial integrity and independence of Lebanon, free the country from foreign interference, and strengthen its legitimate and democratic government. Amendment 2 Recital - 1 a (new) (-1a) The European Union and its Member States play a prominent role in the new United Nations Interim Force in Lebanon mission and have committed themselves to the full implementation of the United Nations Security Council Resolution 1701 (2006) with a view to stabilising the area and finding a long-term solution to the causes that led to the summer 2006 conflict in Lebanon. Amendment 3 Recital 1 a (new) (1a)  It is in the interests of Lebanon to find the right balance between post-conflict expenditure, reconstruction, excessive debt and social needs, while paying particular attention to the education and training sector and to the fight against poverty. Amendment 4 Recital 2 (2)  Lebanon, on the one hand, and the European Community and its Member States on the other hand, have signed an Association Agreement, which entered into force on 1 April 2006, (2)  Within the framework of the Euro-Mediterranean Partnership, Lebanon on the one hand, and the European Community and its Member States on the other, have signed an Association Agreement, which entered into force on 1 April 2006. Amendment 5 Recital 4 (4)  Relations between Lebanon and the European Union are developing within the framework of the European Neighbourhood Policy, which is expected to lead to deeper economic integration. The EU and Lebanon have agreed on a European Neighbourhood Policy Action Plan identifying medium-term priorities in EU-Lebanon relations and related policies, (4)  Relations between Lebanon and the European Union are also developing within the framework of the European Neighbourhood Policy (ENP), the objectives of which include strengthening economic integration. In this context, the EU and Lebanon agreed on an Action Plan in January 2007, which identifies medium-term priorities in their relations and related policies. Amendment 6 Recital 4 a (new) (4a)  In particular, the adoption on 19 January 2007 of that Action Plan has contributed significantly to the stabilisation of the country. Amendment 7 Recital 4 b (new) (4b)  The exceptional macro-financial assistance envisaged in this Decision is particularly urgent because the funds under the European Neighbourhood and Partnership Instrument for sectoral reforms will be available to Lebanon from 2009 onwards only. The planned exceptional macro-financial assistance fills this gap, being available for 2007 to 2009 and having an immediate impact on Lebanon's balance of payments. Provision should therefore be made in a Memorandum of Understanding to guarantee the complementarity of both actions. Amendment 8 Recital 4 c (new) (4c)  The macro-financial impact of the 2006 war on the economy of Lebanon and the prejudicial effect of the protracted political crisis on the country's chronically weak and fragile institutional system increase the need for international financial assistance, as provided, in part, by the International Donors' Conference on Support for Lebanon (Paris III) in January 2007. The macro-financial assistance envisaged in this Decision should therefore be implemented without any further delay, as part of the European Union's commitment to Lebanon. Amendment 9 Recital 8 a (new) (8a)  The impact of the summer 2006 conflict with Israel and the cumulative effects of past economic policies have led to a severe economic and financial crisis that has required urgent action. Amendment 10 Recital 8 b (new) (8b)  The European Union's macro-financial assistance should not merely supplement programmes and resources from the Bretton Woods institutions but ensure the added value of EU involvement. Amendment 11 Recital 8 c (new) (8c)  The Community should ensure that the European Union's macro-financial assistance is legally and substantially in line with the measures taken within the different areas of external action and other relevant Community policies. Consistency should be ensured in formulating policy, including the Memorandum of Understanding and the Grant Agreement and its implementation Amendment 12 Recital 8 d (new) (8d)  The Community should also ensure that the European Union's macro-financial assistance is exceptional and limited in time, complementary to the assistance given by Bretton Woods institutions, bilateral donors and the Paris Club creditors, conditional on meeting clearly identified requirements, including political pre-conditions, and carefully monitored and assessed in order to prevent fraud and financial irregularities. Amendment 13 Recital 9 (9)  The release of the Community financial assistance is without prejudice to the powers of the budgetary authority. (9)  Such financial assistance should be provided only once it has been established that the conditions to be agreed with the Lebanese authorities have been satisfactorily fulfilled. The conditions under which instalments may be disbursed from exceptional assistance should be laid down in the Memorandum of Understanding and the Grant Agreement and should include specific objectives that are to be attained in the following areas: improved transparency and increased sustainability of public finances; the application of macro-economic and budgetary priorities; and full compliance with international democratic and human rights standards, and the fundamental principles of the rule of law. Real progress in attaining the above objectives should provide the basis for disbursing the instalments. The release of the Community financial assistance is without prejudice to the powers of the budgetary authority. Amendment 14 Recital 9 a (new) (9a)  The European Union's strong financial and political support should be contingent on the successful rebuilding of a Lebanese state that is able to exercise full sovereignty over its whole territory, on an improvement in its economic and social situation and on the strengthening of the democratisation process in the country. Amendment 15 Recital 10 (10)  This assistance should be managed by the Commission in consultation with the Economic and Financial Committee. (10)  The assistance should be managed by the Commission in consultation with the Economic and Financial Committee and the European Parliament, Amendment 16 Article 1, paragraph 1, subparagraph 1 1.  The Community shall make available to Lebanon financial assistance amounting to a maximum of EUR 80 million, with a view to supporting Lebanon's domestic efforts of post-war reconstruction and sustainable economic recovery, and in this way, alleviating the financial constraints on the implementation of the government's economic programme. 1.  The Community shall make available to Lebanon exceptional financial assistance amounting to a maximum of EUR 80 million, with a view to supporting Lebanon's domestic efforts of post-war reconstruction and sustainable economic recovery, and in this way, alleviating the financial constraints on the implementation of the government's economic programme and avoiding a further deterioration in Lebanon's trade and current account balances. Amendment 17 Article 1, paragraph 2 2.  The Community financial assistance shall be managed by the Commission in consultation with the Economic and Financial Committee and in a manner consistent with the agreements or understandings reached between the International Monetary Fund (IMF) and Lebanon. 2.  The Community financial assistance shall be managed by the Commission in consultation with the Economic and Financial Committee and in a manner consistent with the agreements or understandings reached between the International Monetary Fund (IMF) and Lebanon. The Commission shall regularly inform the European Parliament of the Economic and Financial Committee proceedings and provide it with the relevant documents. Amendment 18 Article 1, paragraph 3 3.  The Community financial assistance shall be made available for two years starting from the first day after the entry into force of this Decision. However, if circumstances so require, the Commission, after consultation of the Economic and Financial Committee, may decide to extend the availability period by a maximum of one year. 3.  The Community financial assistance shall be made available for two years starting from the first day after the entry into force of this Decision. Amendment 19 Article 2, paragraph 1 1.  The Commission is hereby empowered to agree with the authorities of Lebanon, after consulting the Economic and Financial Committee, the economic policy and financial conditions attached to the financial assistance, to be laid down in a Memorandum of Understanding and a Grant/Loan Agreements. These conditions shall be consistent with the agreements or understandings referred to in Article 1(2). 1.  The Commission is hereby empowered to agree with the authorities of Lebanon, after consulting the Economic and Financial Committee and the European Parliament, the economic policy and financial conditions attached to the financial assistance, to be laid down in a Memorandum of Understanding and a Grant/Loan Agreements. These conditions shall be consistent with the agreements or understandings referred to in Article 1(2). The Memorandum of Understanding and the Grant Agreement shall be submitted forthwith to the European Parliament and to the Council. The conditions referred to in this paragraph shall include specific objectives in the following areas: improved transparency and increased sustainability of public finances; the application of macro-economic and budgetary priorities; and full compliance with international democratic and human rights standards and the fundamental principles of the rule of law. Those conditions shall also aim to encourage the implementation of economic and social policies focused on tackling poverty, on education and on health. Real progress in attaining those objectives shall provide the basis for disbursing the instalments from the macro-financial assistance envisaged. In order to increase transparency and accountability, the conditions of the European Union's macro-financial assistance shall be made public. Amendment 20 Article 2, paragraph 2 2.  During the implementation of the Community financial assistance, the Commission shall monitor the soundness of Lebanon's financial arrangements, administrative procedures, internal and external control mechanisms which are relevant to this Community financial assistance. 2.  During the implementation of the Community financial assistance, the Commission shall carefully monitor the soundness of Lebanon's financial arrangements, administrative procedures, internal and external control mechanisms which are relevant to this Community financial assistance. Amendment 21 Article 2, paragraph 3 3.  The Commission shall verify at regular intervals that economic policy in Lebanon is in accordance with the objectives of this assistance and that the agreed economic policy and financial conditions are being satisfactorily fulfilled. In doing so, the Commission shall coordinate closely with the Bretton Woods Institutions, and, when required, with the Economic and Financial Committee. 3.  The Commission shall verify at regular intervals that economic policy in Lebanon is in accordance with the objectives of this assistance and that the agreed economic policy and financial conditions are being satisfactorily fulfilled. In doing so, the Commission shall coordinate closely with the Bretton Woods Institutions, and, when required, with the Economic and Financial Committee and the European Parliament. Amendment 22 Article 2, paragraph 3 a (new) 3a.  The Commission, after informing the European Parliament and the Council, may adapt the provision of the exceptional macro-financial assistance envisaged in this Decision to political developments in Lebanon, bearing in mind at all times the importance of enhancing the stability of the country and not further aggravating the internal crisis. Amendment 23 Article 2 a (new) Article 2a The Commission, after having informed the European Parliament and the Council, may suspend the provision of this exceptional macro-financial assistance if a deterioration in Lebanon's political situation makes it de facto impossible to fulfil the objectives of that assistance, or in the event of a serious infringement of international democratic and human rights standards, and the fundamental principles of the rule of law. Amendment 24 Article 3, paragraph 1 1.  The Community financial assistance shall be made available by the Commission to Lebanon in maximum three instalments. 1.  The Community financial assistance shall be made available by the Commission to Lebanon in three instalments. Amendment 25 Article 3, paragraph 4 4.  The funds shall be paid to the Banque du Liban exclusively in support of Lebanon's financing needs. 4.  The funds shall be paid to the Banque du Liban exclusively in support of Lebanon's financing needs, and recorded under the heading "Exceptional financial assistance from the European Union". Amendment 26 Article 4 The Community financial assistance shall be implemented in accordance with the provisions of Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities and its implementing rules. In particular, the Memorandum of Understanding and the Grant/Loan Agreements with the authorities of Lebanon shall provide for appropriate measures by Lebanon related to the prevention of, and the fight against, fraud, corruption and other irregularities affecting the assistance. They shall also provide for controls by the Commission, including the European Anti Fraud Office, with the right to perform on the spot checks and inspections, and for audits by the Court of Auditors, where appropriate, to be carried out on the spot. The Community financial assistance shall be implemented in accordance with the provisions of Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities and its implementing rules. In particular, the Memorandum of Understanding and the Grant/Loan Agreements with the authorities of Lebanon shall provide for specific measures to be implemented by Lebanon related to the prevention of, and the fight against, fraud, corruption and other irregularities affecting the assistance. In order to ensure greater transparency in the management and disbursement of funds, they shall also provide for controls by the Commission, including the European Anti Fraud Office, with the right to perform on the spot checks and inspections, and for audits by the Court of Auditors and independent auditors, on approval by the actors involved, where appropriate, to be carried out on the spot. Amendment 27 Article 5 By 31 August of each year the Commission shall submit to the European Parliament and to the Council a report, including an evaluation of the implementation of this Decision in the preceding year. The report shall indicate the connection between the policy conditions set out in Article 2(1), Lebanon's ongoing economic and fiscal performance, and the Commission's decision to release the instalments of the assistance. By 31 August of each year the Commission shall submit to the relevant Committees of the European Parliament and to the Council a report, including an evaluation of the implementation of this Decision in the preceding year. The report shall indicate the connection between the policy conditions set out in Article 2(1), Lebanon's ongoing economic and fiscal performance, and the Commission's decision to release the instalments of the assistance. Amendment 28 Article 5 a (new) Article 5a No later than two years after the expiry of the implementation period concerning the assistance provided for in this Decision, the Commission shall submit to the European Parliament and the Council an ex-post evaluation report. Amendment 29 Article 6 This Decision shall take effect on the day of its publication in the Official Journal of the European Union. This Decision shall take effect on the day of its publication in the Official Journal of the European Union and shall be valid for a period of two years thereafter.