Procedure : 2009/0162(COD)
Document stages in plenary
Document selected : A7-0058/2010

Texts tabled :

A7-0058/2010

Debates :

Votes :

PV 18/05/2010 - 8.13
CRE 18/05/2010 - 8.13
Explanations of votes

Texts adopted :

P7_TA(2010)0169

REPORT     ***I
PDF 220kWORD 259k
23 March 2010
PE 438.155v02-00 A7-0058/2010

on the proposal for a decision of the European Parliament and of the Council providing macro-financial assistance to Ukraine

(COM(2009)0580 – C7-0277/2009 – 2009/0162(COD))

Committee on International Trade

Rapporteur: Vital Moreira

AMENDMENTS
DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EUROPEAN PARLIAMENT POSITION AT FIRST READING(1)*
 EXPLANATORY STATEMENT
 OPINION of the Committee on Foreign Affairs
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a decision of the European Parliament and of the Council providing macro-financial assistance to Ukraine

(COM(2009)0580 – C7-0277/2009 – 2009/0162(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to the Council (COM(2009)0580),

–   having regard to Article 308 of the EC Treaty, pursuant to which the Council consulted Parliament (C7-0101/2009),

–   having regard to the Communication from the Commission to the European Parliament and the Council entitled ‘Consequences of the entry into force of the Treaty of Lisbon for ongoing interinstitutional decision-making procedures’ (COM(2009)0665),

–   having regard to Article 294(3) and Article 212(2) of the Treaty on the Functioning of the European Union,

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on International Trade and the opinion of the Committee on Foreign Affairs (A7-0058/2010),

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

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend the 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.


EUROPEAN PARLIAMENT POSITION AT FIRST READING(1)*

DECISION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL

providing macro-financial assistance to Ukraine

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 212(2) thereof,

Having regard to the proposal from the European Commission(2),

After consulting the Economic and Financial Committee,

Acting in accordance with the ordinary legislative procedure(3),

Whereas:

(1)       Relations between Ukraine and the European Union are developing within the framework of the European Neighbourhood Policy. In 2005, the Community and Ukraine agreed on a European Neighbourhood Policy Action Plan identifying medium-term priorities in EU-Ukraine relations, replaced by the EU-Ukraine Association Agenda of November 2009. Since 2007, the Community and Ukraine have been negotiating an Association Agreement that is expected to replace the existing Partnership and Cooperation Agreement. The framework of EU-Ukraine relations is further enhanced by the newly launched Eastern Partnership.

(2)       The Ukrainian economy has been increasingly hit by the international financial crisis with dramatically declining output, deteriorating fiscal position and rising external financing needs.

(3)       Ukraine’s economic stabilisation and recovery is supported by financial assistance of the International Monetary Fund (IMF). The IMF Stand-By Arrangement (SBA) for Ukraine was approved in November 2008.

(4)       Following a further deterioration of the fiscal position, a large part of the second tranche under the IMF’s SBA and the full amount of the third tranche were channelled to the budget.

(5)       Ukraine has requested Union macro-financial assistance in view of the worsening economic situation and outlook.

(6)       Given that a residual financing gap in 2009-2010 remains in the balance of payments, macro-financial assistance is considered an appropriate response to Ukraine’s request to support economic stabilisation in conjunction with the current IMF programme. The present financial assistance is also expected to contribute to alleviate the external financing needs of the State budget.

(6a)     Union macro-financial assistance can only contribute to economic stabilisation if the main political forces in Ukraine ensure political stability and establish a broad consensus on a rigorous implementation of the necessary structural reforms.

(7)       The macro-financial assistance is provided to Ukraine in addition to the loan facility based on Council Decision 2002/639/EC of 12 July 2002 providing supplementary macro-financial assistance to Ukraine(4).

(7a)     Union macro-financial assistance should not merely supplement programmes and resources from the IMF and the World Bank but should ensure the added value of EU involvement.

(7b)     The Commission should ensure that Union macro-financial assistance is legally and substantially in line with the measures taken within the different areas of external action and other relevant Union policies.

(7c)     The conditions under which instalments may be disbursed from exceptional assistance should include specific objectives with a view to strengthening efficiency, transparency and accountability. Financial assistance should be provided only once it has been established that these conditions have been satisfactorily fulfilled.

(7d)     The conditions underlying the provision of macro-financial assistance should reflect the key principles and objectives of EU policy towards Ukraine.

(8)       In order to ensure efficient protection of the Union’s financial interests linked to the present financial assistance, it is necessary to provide for appropriate measures by Ukraine related to the prevention of, and the fight against, fraud, corruption and any other irregularities linked to this assistance, as well as for controls by the Commission and audits by the Court of Auditors.

(9)       The release of the Union financial assistance is without prejudice to the powers of the budgetary authority.

(10)     The assistance should be managed by the Commission, in consultation with the European Parliament and the Economic and Financial Committee.

HAVE ADOPTED THIS DECISION:

Article 1

1.        The Union shall make available to Ukraine exceptional macro-financial assistance in the form of a loan facility with a maximum principal amount of EUR 500 million and a maximum average maturity of 15 years with a view to supporting Ukraine’s economic stabilisation and alleviating its balance of payments and budgetary needs as identified in the current IMF programme.

2.        To this end, the Commission is empowered to borrow on behalf of the European Community the necessary resources.

3.        The release of the Union financial assistance shall be managed by the Commission in a manner consistent with the agreements or understandings reached between the IMF and Ukraine and with the key principles and objectives of economic reform set out in the EU-Ukraine Association Agenda. The Commission shall regularly inform the European Parliament of the proceedings of the Economic and Financial Committee, and provide it with the relevant documents.

4.        The Union financial assistance shall be made available for two years starting from the first day after the entry into force of the Memorandum of Understanding referred to in Article 2(1). ▌

Article 2

1.        The Commission is empowered to agree with the authorities of Ukraine, after consulting the Economic and Financial Committee, the economic policy conditions attached to the Union macro-financial assistance, to be laid down in a Memorandum of Understanding which includes a timeframe for their fulfilment. The conditions shall be consistent with the agreements or understandings reached between the IMF and Ukraine and with the key principles and objectives of economic reform set out in the EU-Ukraine Association Agenda. Those conditions shall include specific objectives with a view to strengthening the efficiency, transparency and accountability of the assistance, including in particular public finance management systems in Ukraine. Real progress in attaining those objectives shall provide the basis for disbursing the instalments of this assistance. The detailed financial terms of the assistance shall be laid down in a Loan Agreement to be agreed between the Commission and the authorities of Ukraine.

2.        During the implementation of the Union financial assistance, the Commission shall monitor the soundness of Ukraine’s financial arrangements, administrative procedures, ▌the internal and external control mechanisms which are relevant to such assistance and the adherence to the timeframe agreed upon.

3.        The Commission shall verify at regular intervals that Ukraine’s economic policies are in accordance with the objectives of the Union assistance and that the agreed economic policy conditions are being satisfactorily fulfilled. In doing so, the Commission shall coordinate closely with the IMF and the World Bank, and, when required, with the Economic and Financial Committee.

Article 3

1.        The Union financial assistance shall be made available by the Commission to Ukraine in two loan instalments, subject to the conditions of paragraph 2. The size of each instalment will be laid down in the Memorandum of Understanding.

2.        The Commission shall decide on the release of the instalments subject to satisfactory implementation of the economic policy conditions agreed in the Memorandum of Understanding. The disbursement of the second instalment shall not take place earlier than three months after the release of the first instalment.

3.        The Union funds shall be paid to the National Bank of Ukraine. Subject to provisions to be agreed in the Memorandum of Understanding, including a confirmation of residual budgetary financing needs, the funds may be transferred to the Treasury of Ukraine as the final beneficiary.

Article 4

1.        The borrowing and the lending operations referred to in this Decision shall be carried out in euro using the same value date and shall not involve the Union in the transformation of maturities, in any exchange or interest rate risks, or in any other commercial risk.

2.        The Commission shall take the necessary steps, if Ukraine so requests, to ensure that an early repayment clause is included in the loan terms and conditions and that it is matched by a corresponding clause in the terms and conditions of the borrowing operations.

3.        At the request of Ukraine, and where circumstances permit an improvement of the interest rate of the loan, the Commission may refinance all or part of its initial borrowings or restructure the corresponding financial conditions. Refinancing or restructuring operations shall be carried out in accordance with the conditions set out in paragraph 1 and shall not have the effect of extending the average maturity of the borrowing concerned or increasing the amount of capital outstanding at the date of the refinancing or restructuring.

4.        All costs incurred by the Union which are related to the borrowing and lending operations under this Decision shall be borne by Ukraine.

5.        The European Parliament and the Economic and Financial Committee shall be kept informed of developments in the operations referred to in paragraphs 2 and 3.

Article 5

The Union financial assistance shall be implemented in accordance with the provisions of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities(5) and its implementing rules(6). In particular, the Memorandum of Understanding and the Loan Agreement to be agreed with the authorities of Ukraine shall provide for specific measures to be implemented by Ukraine in relation 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, where appropriate, to be carried out on the spot.

Article 6

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 as laid down in a Memorandum of Understanding pursuant to Article 2(1), Ukraine’s on-going economic and fiscal performance, and the Commission’s decisions to release the instalments of the assistance.

No later than two years after the expiry of the availability period referred to in Article 1(4), the Commission shall submit to the European Parliament and to the Council an ex post evaluation report.

Article 7

This Decision shall enter into force on the day of its publication in the Official Journal of the European Union.

Done at,

For the European Parliament                                                For the Council

The President                                                                    The President

(1)

*    Amendments: new or amended text is highlighted in bold italics; deletions are indicated by the symbol ▌.

(2)

    OJ C […], […], p. […].

(3)

   OJ L

(4)

              OJ L 209, 6.8. 2002, p. 22.

(5)

              OJ L 248, 16.9.2002 p. 1.

(6)

              Commission Regulation (EC, Euratom) No 2342/2002 (OJ L 357, 31.12.2002, p. 1).


EXPLANATORY STATEMENT

The Commission proposes to provide macro-financial assistance (MFA) to Ukraine amounting up to EUR 500 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.

The assistance aims at contributing to covering Ukraine’s general balance-of-payments needs and the external financing needs of the State budget identified by the International Monetary Fund (IMF). It would support the authorities’ stabilisation programme with a view to ensuring sustainable fiscal and external accounts, and will thus help Ukraine address the consequences of the global financial crisis. Namely, Ukraine’s transition from state planned to market economy has been comparatively difficult and since the onset of the global crisis, the economic situation of the country has deteriorated dramatically. Since agreeing on a package of crisis-related adjustments (including currency devaluation), Ukraine’s current account has substantially improved, but Ukraine has nonetheless been suffering a capital account deficit and international reserves could only be kept at an appropriate level due to the financing provided by the IMF under the Stand-By Arrangement (SBA).

The proposed MFA is intended to complement support from the IMF foreseen under the SBA (agreed by the IMF board in November 2008 and revision agreed by the IMF board in May 2009), as well as World Bank support due to take the form of budget support policy loans.

The proposed new MFA is also complementary to Community MFA to Ukraine of up to EUR 110 million granted by the Council Decision 2002/639/EC. No disbursements have been made on that 2002 programme yet, as the conditions for such disbursements were not met. That Council decision is still in force and the Commission intends to implement it, prior to the new proposed assistance.

The Community MFA programme would also complement other EC financing (in particular to medium-term ENPI budget support implemented within the framework of the Country Strategy for EU cooperation with Ukraine and the Instrument for Pre-Accession (IPA) budget support grants).

The Community financial support reflects Ukraine’s strategic importance as a potential candidate country for EU accession. The MFA would be provided at a time when the EU is also helping to mobilise financing to support the reform of the Ukrainian energy sector. The Commission and other institutions involved (the IMF, the World Bank, the EBRD and the EIB) are working together on a support package to the Ukrainian authorities designed to assist in developing a sustainable solution to Ukraine’s medium-term gas transit and gas payment obligations. Even though the proposed MFA is not intended to be directly linked to that package, it would support - in particular through appropriate conditionality - Ukraine’s economic stabilisation and reforms.

Therefore - while in agreement with the proposal to provide Ukraine with exceptional MFA - your rapporteur has proposed amendments in order to improve the clarity, transparency and accountability of the draft proposal. 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 instrument and provide Parliament with an ex post evaluation report in addition to the annual reporting.


OPINION of the Committee on Foreign Affairs (16.3.2010)

for the Committee on International Trade

on the proposal for a decision of the European Parliament and of the Council providing macro-financial assistance to Ukraine

(COM(2009)0580 – C7-0277/2009 – 2009/0162(COD))

Rapporteur: Ryszard Antoni Legutko

SHORT JUSTIFICATION

Ukraine, a key partner of the EU in its Eastern neighbourhood, has been severely hit by the global economic crisis.

Your draftsman proposes to agree with the provision of macro-financial assistance as proposed by the Commission (up to EUR 500 million in the form of a loan intended to contribute to covering Ukraine´s general balance-of-payments needs and the external financing needs of the State budget, as identified by the International Monetary Fund, (IMF)), as it is important to help Ukraine strengthen its long-term macro-financial stability.

In consideration of the fact, however, having seen that the Commission draft refers on several occasions to conditions agreed between Ukraine and the IMF, your draftsman proposes to amend the draft decision, so as to make sure that assistance provided out of EU budget is in line - besides being consistent with the IMF programme - with key principles and objectives of the EU policy towards Ukraine. Also, the assistance of the EU should, based on positive conditionality, trigger further necessary structural reforms in Ukraine, which are crucial for Ukraine’s integration into the European Union.

AMENDMENTS

The Committee on Foreign Affairs calls on the Committee on International Trade, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1

Proposal for a decision

Recital 1

Text proposed by the Commission

Amendment

(1) Relations between Ukraine and the European Union are developing within the framework of the European Neighbourhood Policy. In 2005, the Community -and Ukraine agreed on a European Neighbourhood Policy Action Plan identifying medium-term priorities in EU-Ukraine relations. Since 2007, the Community - and Ukraine have been negotiating an Association Agreement that is expected to replace the existing Partnership and Cooperation Agreement. The framework of EU-Ukraine relations is further enhanced by the newly launched Eastern Partnership.

(1) Relations between Ukraine and the European Union are developing within the framework of the European Neighbourhood Policy. In 2005, the Community and Ukraine agreed on a European Neighbourhood Policy Action Plan identifying medium-term priorities in EU-Ukraine relations, replaced by the EU-Ukraine Association Agenda of November 2009. Since 2007, the Community and Ukraine have been negotiating an Association Agreement that is expected to replace the existing Partnership and Cooperation Agreement. The framework of EU-Ukraine relations is further enhanced by the newly launched Eastern Partnership.

Amendment  2

Proposal for a decision

Recital 6 a (new)

Text proposed by the Commission

Amendment

 

(6a) The EU macro-financial assistance can only contribute to economic stabilisation if the main political forces in Ukraine ensure political stability and establish a broad consensus on a rigorous implementation of the necessary structural reforms.

Amendment  3

Proposal for a decision

Recital 7 a (new)

Text proposed by the Commission

Amendment

 

(7a) The conditions underlying the provision of the macro-financial assistance should reflect the key principles and objectives of EU policy towards Ukraine.

Amendment  4

Proposal for a decision

Recital 10

Text proposed by the Commission

Amendment

(10) This assistance should be managed by the Commission, in consultation with the Economic and Financial Committee.

(10) This assistance should be managed by the Commission, in consultation with the European Parliament and the Economic and Financial Committee.

Amendment  5

Proposal for a decision

Article 1 – paragraph 3

Text proposed by the Commission

Amendment

3. The release of the Community financial assistance shall be managed by the Commission in a manner consistent with the agreements or understandings reached between the IMF and Ukraine.

3. The release of the Union’s financial assistance shall be managed by the Commission in a manner consistent with the agreements or understandings reached between the IMF and Ukraine and with the key principles and objectives of economic reform set out in the EU-Ukraine Association Agenda.

Amendment  6

Proposal for a decision

Article 2 – paragraph 1

Text proposed by the Commission

Amendment

1. The Commission is empowered to agree with the authorities of Ukraine, after consulting the Economic and Financial Committee, the economic policy conditions attached to the Community macro-financial assistance, to be laid down in a Memorandum of Understanding. The conditions shall be consistent with the agreements or understandings reached between the IMF and Ukraine. The detailed financial terms of the assistance shall be laid down in a Loan Agreement to be agreed between the Commission and the authorities of Ukraine.

1. The Commission is empowered to agree with the authorities of Ukraine, after consulting the Economic and Financial Committee, the economic policy conditions attached to the Union’s macro-financial assistance, to be laid down in a Memorandum of Understanding which includes a timeframe for their fulfilment. The conditions shall be consistent with the agreements or understandings reached between the IMF and Ukraine and with the key principles and objectives of economic reform set out in the EU-Ukraine Association Agenda. The detailed financial terms of the assistance shall be laid down in a Loan Agreement to be agreed between the Commission and the authorities of Ukraine.

Amendment  7

Proposal for a decision

Article 2 – paragraph 2

Text proposed by the Commission

Amendment

2. During the implementation of the Community financial assistance, the Commission shall monitor the soundness of Ukraine’s financial arrangements, administrative procedures, and the internal and external control mechanisms which are relevant to such assistance.

2. During the implementation of the Union’s financial assistance, the Commission shall monitor the soundness of Ukraine’s financial arrangements, administrative procedures, the internal and external control mechanisms which are relevant to such assistance and the adherence to the timeframe agreed upon.

Amendment  8

Proposal for a decision

Article 4 – paragraph 5

Text proposed by the Commission

Amendment

5. The Economic and Financial Committee shall be kept informed of developments in the operations referred to in paragraphs 2 and 3.

5. The European Parliament and the Economic and Financial Committee shall be kept informed of developments in the operations referred to in paragraphs 2 and 3.

Amendment  9

Proposal for a decision

Article 5

Text proposed by the Commission

Amendment

The Community financial assistance shall be implemented in accordance with the provisions of Council 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 Loan Agreement to be agreed with the authorities of Ukraine shall provide for appropriate measures by Ukraine in relation 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 (OLAF), 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 Union financial assistance shall be implemented in accordance with the provisions of Council 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 Loan Agreement to be agreed with the authorities of Ukraine shall provide for appropriate measures by Ukraine in relation to the prevention of, and the fight against, fraud, corruption and other irregularities affecting the assistance. They shall also provide for controls by then Commission, including the European Anti-Fraud Office (OLAF), 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 Commission shall conduct an Operational Assessment of the financial circuits and administrative procedures in Ukraine no later than three months after the first instalment is made available.

PROCEDURE

Title

Macro-financial assistance for Ukraine

References

COM(2009)0580 – C7-0277/2009 – 2009/0162(COD)

Committee responsible

INTA

Opinion by

 Date announced in plenary

AFET

24.11.2009

 

 

 

Rapporteur

 Date appointed

Ryszard Antoni Legutko

26.1.2010

 

 

Discussed in committee

23.2.2010

16.3.2010

 

 

Date adopted

16.3.2010

 

 

 

Result of final vote

+:

–:

0:

57

0

4

Members present for the final vote

Gabriele Albertini, Sir Robert Atkins, Franziska Katharina Brantner, Frieda Brepoels, Michael Gahler, Marietta Giannakou, Ana Gomes, Andrzej Grzyb, Takis Hadjigeorgiou, Anna Ibrisagic, Ioannis Kasoulides, Tunne Kelam, Nicole Kiil-Nielsen, Maria Eleni Koppa, Eduard Kukan, Vytautas Landsbergis, Ryszard Antoni Legutko, Krzysztof Lisek, Sabine Lösing, Ulrike Lunacek, Mario Mauro, Kyriakos Mavronikolas, Willy Meyer, Francisco José Millán Mon, Alexander Mirsky, Andreas Mölzer, Norica Nicolai, Raimon Obiols, Kristiina Ojuland, Ria Oomen-Ruijten, Justas Vincas Paleckis, Pier Antonio Panzeri, Ioan Mircea Paşcu, Vincent Peillon, Alojz Peterle, Mirosław Piotrowski, Cristian Dan Preda, José Ignacio Salafranca Sánchez-Neyra, Nikolaos Salavrakos, Jacek Saryusz-Wolski, Werner Schulz, Adrian Severin, Marek Siwiec, Charles Tannock, Zoran Thaler, Johannes Cornelis van Baalen, Geoffrey Van Orden, Kristian Vigenin

Substitutes present for the final vote

Charalampos Angourakis, Elena Băsescu, Reinhard Bütikofer, Kinga Gál, Evgeni Kirilov, Georgios Koumoutsakos, Emilio Menéndez del Valle, Doris Pack, Marietje Schaake, György Schöpflin, Traian Ungureanu, Renate Weber, Janusz Władysław Zemke


PROCEDURE

Title

Macro-financial assistance for Ukraine

References

COM(2009)0580 – C7-0277/2009 – 2009/0162(COD)

Date submitted to Parliament

29.10.2009

Committee responsible

 Date announced in plenary

INTA

24.11.2009

Committees asked for opinions

 Date announced in plenary

AFET

24.11.2009

BUDG

24.11.2009

 

 

Not delivering opinions

 Date of decision

BUDG

25.11.2009

 

 

 

Rapporteur(s)

 Date appointed

Vital Moreira

10.11.2009

 

 

Discussed in committee

14.1.2010

27.1.2010

 

 

Date adopted

17.3.2010

 

 

 

Result of final vote

+:

–:

0:

22

0

2

Members present for the final vote

Laima Liucija Andrikienė, David Campbell Bannerman, Daniel Caspary, William (The Earl of) Dartmouth, Joe Higgins, Yannick Jadot, Metin Kazak, Bernd Lange, David Martin, Vital Moreira, Godelieve Quisthoudt-Rowohl, Tokia Saïfi, Helmut Scholz, Peter Šťastný, Robert Sturdy, Gianluca Susta, Iuliu Winkler, Jan Zahradil, Pablo Zalba Bidegain, Paweł Zalewski

Substitutes present for the final vote

Catherine Bearder, George Sabin Cutaş, Salvatore Iacolino, Libor Rouček, Michael Theurer, Jarosław Leszek Wałęsa

Substitutes under Rule 187(2) present for the final vote

Sylvie Guillaume

Last updated: 8 April 2010Legal notice