Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on providing macro-financial assistance to the Hashemite Kingdom of Jordan

EXPLANATORY MEMORANDUM

The outlook for Jordan’s economy is subject to large downside risks, in the face of continued regional instability and a fragile global outlook. Jordan’s real GDP growth was estimated at 2.5% in 2024 and is projected to remain broadly unchanged in 2025. Inflation remained below 2% by end-2024, supported by lower import prices and continued monetary tightening by the Central Bank in line with the US dollar peg. However, potential spillovers of nearby wars have increased pressures on Jordan’s security situation and economic resilience, further raising downside risks to its outlook. The Middle East has been experiencing increasing instability, due to the war in Gaza, the fragile ceasefire in Lebanon, the fall of the Assad regime in Syria. The escalation of tensions between Israel and Iran in mid-2025 disrupted travel and increased uncertainty, with direct impacts on the tourism sector and likely adverse effects on consumer and investor confidence. While Jordan’s economic backdrop remains broadly stable, heightened volatility and geopolitical unpredictability pose growing challenges for its future economic and social stability.

Moreover, the country faces deep-rooted structural challenges. The unemployment rate remains persistently high at 21.4%, with even higher rates among the youth, while female participation ranks among the lowest in the world. These labour market weaknesses continue to constrain Jordan’s growth potential and hinder broader economic inclusion and social cohesion. Fiscal pressures intensified in 2024 amid spillover effects from regional conflicts and falling prices of key export commodities. Although the government introduced revenue-raising measures and cut down on capital spending, the general budget deficit still widened to 5.6% of GDP. Public debt rose slightly to 90.4% of GDP (excluding Social Security Corporation holdings) ¹ . The current account deficit widened to close to 6% of GDP in 2024, driven by lower exports and a decline in tourism revenues. Jordan’s structural reliance on energy and food imports, coupled with a weak export base, continues to weigh on external balances. Despite stable reserves of around USD 21 billion, vulnerabilities to external shocks persist, reinforcing the need for continued international financial support.

In recent years, Jordan has pursued efforts to modernise its economic structure, notably through the launch of the Economic Modernisation Vision (EMV) in 2022, a ten-year strategy aimed at boosting investment, creating jobs, and raising living standards. Building on earlier reforms, such as the 2018 London Initiative, the EMV focuses on eight key sectors and includes measures to enhance public sector efficiency and citizen engagement, with reform efforts supported also through the consecutive IMF programmes and EU Macro-Financial Assistance (MFA). The first phase (2023–2025) is nearing completion, laying the groundwork for future implementation. These reform efforts have advanced despite a series of overlapping external shocks, including the protracted Syrian refugee crisis, the COVID-19 pandemic, global supply disruptions triggered by Russia’s unprovoked war of aggression against Ukraine, and renewed regional tensions following the Israel-Gaza conflict and Red Sea trade disruptions. Although recent diplomatic steps toward Syria’s reintegration have been positive, they have yet to create the conditions conducive to the large-scale return of refugees from Jordan.

Given the series of external shocks and Jordan’s strategic role in promoting regional stability, the country has received substantial international support over the past decade through various international partners. This includes four consecutive IMF programmes since 2012, four MFA operations by the EU since 2014, significant US assistance, and targeted support for hosting Syrian refugees.

• The first three MFA programmes (MFA I: EUR 180 million; MFA II: EUR 200 million; MFA III: EUR 500 million + EUR 200 million top-up in response to COVID-19) provided a total of EUR 1.08 billion in loans between 2014 and 2023. Moreover, following a request by the Jordanian authorities on 8 October 2023, the EU adopted a new MFA IV operation in 2025, amounting to EUR 500 million, with disbursements planned over 2025–2027. The MFA IV will be disbursed upon fulfilment of agreed policy conditions in the Memorandum of Understanding (MoU), covering measures in public finance management, governance and anti-corruption, social and labour market policies, and in energy and the business environment. 

• Jordan is also making good progress under the USD 1.2 billion IMF Extended Fund Facility (2024-2027), which has completed three positive reviews to date (the last one concluded on April 2025). Besides, on 25 June 2025, the IMF also approved approximately USD 700 million under the Resilience and Sustainability Facility (RSF) to support reforms addressing climate-related and pandemic preparedness risks. 

• Although temporary uncertainty remains around the disbursement of US budget support in 2025, Jordan has successfully mobilized critical external financing from the World Bank, and GCC partners.

Beyond short-term financial assistance, the European Union (EU) and Jordan have a close and long-standing partnership, anchored in the EU-Jordan Association Agreement, which has been in force since 2002. This relationship has steadily deepened over the years, reflecting strong political ties, economic cooperation, and shared regional interests. In January 2025, the EU and Jordan have agreed to strengthen their ties through a Strategic and Comprehensive Partnership (SCP) aimed at promoting shared prosperity, stability, and security, rooted in mutual trust and long-standing cooperation. This renewed partnership focuses on six key pillars: political relations and regional cooperation; security and defence; economic resilience, trade and investment; human capital; migration; and protection of, and support to, refugees. Its implementation will be supported by a substantial financial package (including through MFA), combining short- and long-term assistance to advance Jordan’s macro-fiscal and structural reform agendas, scale up investment support, and provide targeted aid for the delivery of strategic priorities.

Given their challenging economic situation and sizeable and unmet financing needs, Jordanian authorities requested an additional MFA V operation of EUR 500 million in January 2025. The request highlighted the deteriorating economic and political environment, noting that regional turmoil intensified throughout 2024, compounding an already uncertain and unstable global context. Moreover, these developments have weighed on foreign direct investment, exports, domestic consumption and domestic revenues, further weakening Jordan’s economic and fiscal outlook and increasing the risk of larger external financing needs. The renewed violence in the region, including escalating tensions between Israel and Iran in mid-June, led to flight suspensions in Jordan and is likely to further complicate the country’s fragile economic recovery, dampen investor and tourist confidence, and contribute to an increasingly uncertain outlook.

Against this background, the European Commission proposes to provide further financial support to Jordan, in the form of a new MFA, with the following features: 

• After an in-depth assessment of the political and economic situation in Jordan, the Commission is submitting to the European Parliament and the Council a proposal to provide a new MFA of up to EUR 500 million to the benefit of Jordan. The proposed MFA would help Jordan cover part of its overall residual external financing gap, which is estimated at around USD 3.9 billion in the context of the ongoing IMF programme over the period of 2024-2027. It would also help safeguarding the ongoing reform progress. 

• The disbursement would take place in three instalments, with the release of instalments strictly linked to progress with the implementation of both the IMF programme and a number of additional policy measures to be agreed between the Commission and the authorities and listed in a Memorandum of Understanding (MoU). The MoU could, in principle, include policy reforms covering economic governance (such as public finance management and measures to strengthen domestic revenue mobilization), social and labour market policies, governance, anti-corruption measures, utilities, and the business environment.

• The implementation of the proposed operation is expected to go hand-in-hand with the support under budget support operations financed by the Neighbourhood, Development and International Cooperation Instrument - Global Europe (‘NDICI-GE’).

• As further elaborated in the Commission Staff Working Document (SWD) accompanying this proposal, the Commission considers, based also on the assessment of the political situation made by the European External Action Service (EEAS), that the political and economic pre-conditions for the proposed MFA operation are satisfied.

The Middle East faces growing instability from the war in Gaza, a fragile Lebanon ceasefire, the fall of Syria’s regime, and the recent Israel-Iran conflict. These tensions heighten pressure on Jordan’s security and economy, with rising volatility and increasing downside risks, Economic growth decreased to 2.5% y-o-y (year on year) in 2024 (from 2.9% in 2023), due to the increased uncertainty resulting from the instability in the region, including the war in Israel-Gaza, and the moderation of global growth. Key sectors such as tourism and trade continued to perform relatively well, despite disruptions linked to the war, and exceeding initial expectations, supported by an increase in regional tourist arrivals that partially offset the decline in visitors from the West. Despite this, tourism revenues fell by 2.3% in 2024, and the number of visitors declined by 3.9%. The sectors that contributed most to economic growth were manufacturing, agriculture, transport and communications, as well as financial services. Jordan started 2025 with sustained economic growth, broadly in line with the 2.5% recorded in 2024, driven by continued recovery in tourism, manufacturing and agriculture. However, the second quarter is expected to have been affected by the escalation of tensions between Israel and Iran, which prompted the temporary closure of Jordanian airspace. This disruption, led to suspension of flights and disrupted cargo traffic, and caused broader uncertainty, thus likely weighting on investor and consumer confidence.

The unemployment rate remains high, despite a small decrease to 21.4% in 2024 (from 22.0% in 2023). The unemployment rate among men stood at 18.3% and at 33.3% among women. Youth unemployment remains an important challenge and continues into young adulthood, as the unemployment rate for the age brackets of 15-19 years and 20-24 years was 54.7% and 46.4%, respectively. At only 34.3%, labour force participation remains an important challenge, where men’s and women’s labour force participation are both low or very low at 53.6% and 14.8%, respectively, which compares to 72% and 18% in the MENA region, respectively.

Inflation pressures are contained, in line with recent monetary policy decisions. Inflation fell to 1.6% in 2024 on average y-o-y (from 2.1% in 2023) though it picked up at the beginning of 2025 (2.2% in Jan-Feb 2025, y-o-y) in line with the central bank’s monetary easing. Most recently, main drivers of inflation were prices for rents, meat and poultry, and tobacco and cigarettes. Price decreases were recorded in particular for clothing, dairy products and oils, the latter two had contributed to driving inflation in previous years. Since September 2024, the Central Bank of Jordan (CBJ) cut its interest rate in 3 steps by 100 basis points to 6.5%, marking the end of the monetary tightening phase that began 2.5 years earlier. Between March 2022 and July 2023, the main rate was raised in 10 steps from 2.5% to 7.5%. The CBJ decisions were necessary given the JOD’s peg to the USD, to be in line with the US Federal Reserve’s monetary tightening/easing and avoid pressures on capital flows, and indeed contributed to the moderation of inflationary pressures.

The banking system remains liquid and well capitalised. The capital adequacy ratio stood at 18% in 2024 (from 17.9% in 2023), well above the required 12%. The non-performing loans (NPL) ratio slightly increased to 5.6% in 2024 (from 5.1% in 2023), while the coverage ratio for NPLs stood at 74.8% in 2024. Banks’ profitability remained stable with an estimated return on assets of 1.2%.

Public finances show vulnerabilities, though the IMF’s overall public debt sustainability assessment is supportive. The general government deficit reached 5.6% of GDP in 2024, which is higher than in the previous year (from 5.1% of GDP in 2023). The primary deficit (excluding interest payments on public debt) stood at 0.1% of GDP (0.4% of GDP in 2023). Current expenditure accounted for 89.9% of public expenditure. Besides interest payments (20% of current expenditure) main components of expenditure were military expenditure (29.6%), compensation of civil sector employees (19.3%) and pensions (16.3%). Public debt amounted to 90.4% of GDP (excluding the debt held by the Social Security Investment Fund, SSIF) in 2024, slightly higher than the 89.2% of GDP in 2023. Including the SSIF debt, public debt stood at 116.8% of GDP in 2024, which compares to 113.8% in 2023. Jordan’s public debt is assessed as sustainable with a high probability by the IMF (Article IV, June 2025). Indeed, while the high level of public debt renders Jordan vulnerable to a tightening in financial conditions, the large share of concessional debt provides an important cushion. Moreover, Jordan has significant buffers: foreign exchange reserves correspond to 7.7 months of imports; and assets of the Social Security Investment Fund reached 40 percent of GDP. The risk of sovereign stress is assessed as moderate by the IMF.

Jordan’s external situation remains fragile, but foreign exchange reserves are adequate. The current account deficit (including grants) widened to 5.9% of GDP in 2024 (from 3.6% in 2023), as the services surplus decreased, while the goods deficit and the primary income deficit widened. Main domestic goods export items were chemicals and minerals (30% of goods exports) mainly destined for India and Arab countries, as well as clothes (20%) largely destined for the US. The largest goods import groups were transport equipment & spare parts (10% of goods imports) mainly from China, the US and South Korea; petroleum products (6%) mainly from Saudi Arabia and India; and textiles (5%) from Asia. The current account deficit continued to be mitigated by strong secondary income flows: remittances reached 6.8% of GDP in 2024, while programme financing (World Bank, IMF and other bilateral/multilateral support) reached 4.2% of GDP. Foreign direct investment decreased to 3.3% of GDP in 2024. The CBJ's gross foreign reserves remained strong and above 100% of the IMF’s reserve adequacy metric.

The outlook over the next few years is uncertain. Looking ahead, a modest uptick in growth for 2025 and in the following years was expected by the IMF in June 2025, but this forecast predates the Israel-Iran conflict. The regional wars pose an important downside risk to the outlook, in particular due to the increased level of uncertainty in the region and the possible future impact on the important tourism sector, further fuelled by the recent conflict between Israel-Iran. External and fiscal deficits are expected to remain high, reflecting the underlying structural challenges to sustainably improve fiscal revenue and the trade deficit. Given the large public debt burden, the fiscal consolidation course needs to continue, in addition to ongoing economic modernisation efforts to improve the business environment, to foster private sector growth, including by attracting foreign direct investment.

The subsidiarity principle is respected as the objectives of maintaining short-term macroeconomic stability in Jordan cannot be sufficiently achieved by the Member States alone and can be better achieved by the European Union. The main reasons are the budgetary constraints faced at the national level and the need for strong donor coordination in order to maximise the scale and effectivenes of the assistance.

The proposal complies with the proportionality principle: it confines itself to the minimum required in order to achieve the objectives of short-term macroeconomic stability and does not go beyond what is necessary for that purpose.

As identified by the Commission based on the estimates of the IMF in the context of the EFF, the amount of the proposed new MFA corresponds to 14.6% of the estimated residual financing gap for the period 2025-2027. This is consistent with standard practices on burden-sharing for MFA operations (for a country with an Association Agreement, the upper limit is 60% according to the ECOFIN Council conclusions of 8 October 2002), taking into account the assistance pledged to Jordan by other bilateral and multilateral donors. When considering the overall EU support to Jordan via various instruments (including the proposed MFA, MFA IV, EU budget support and EIB loans, excluding bilateral support by Member States), the total EU support would cover about 35.4% of the estimated residual external financing gap. The overall EU contribution including budget support and EIB loans to Jordan is expected to be higher than in the past.

Project finance or technical assistance would not be suitable or sufficient to address the macroeconomic objectives. The key added value of the MFA compared to other EU instruments is to alleviate external financial constraints and to help create a stable macroeconomic framework, including by promoting a sustainable balance of payments and budgetary situation, and an appropriate framework for structural reforms. By helping to put in place an appropriate overall policy framework, MFA can increase the effectiveness of the actions financed in Jordan under other, more narrowly-focused EU instruments.

MFA is provided as an integral part of the international support for the economic stabilisation of Jordan, including from the IMF. To prepare this proposal for MFA, the Commission consulted with the IMF, which is disbursing a sizeble financing programme. The Commission consulted the Alternate Economic and Financial Committee on the 2 July 2025, where an endorsement for the draft proposal was provided. The Commission has also been in regular contact with the Jordanian authorities.

In line with the requirements under Regulation (EU, Euratom) 2024/2509 ⁷  (‘Financial Regulation’), the Commission services has carried out an operational assessment of the financial and administrative circuits of Jordan ahead of the implementation of MFA IV. The purpose was to ensure that the country’s procedures for managing programme assistance, including MFA, provide adequate guarantees for sound financial management. The final report of the operational assessment, prepared by a consultancy company, was received in October 2024. The report noted clear progress in public finance management systems and other financial circuits since 2020, when the last exercise was undertaken. The report concluded that the status of Jordan’s financial circuits and procedures is deemed favourable for an MFA operation. As the operational assessment was conducted less than a year ago and its findings remain valid, the Commission considers that a new assessment is not required for the proposed MFA V operation. 

The EU’s MFA is an exceptional emergency instrument aimed at addressing severe balance-of-payments difficulties in non-EU countries. This MFA proposal is therefore exempted from the requirement to carry out an Impact Assessment in line with the Commission's Better Regulation Guidelines (SWD(2015) 111 final) as there is a political imperative to move ahead quickly in a situation requiring a rapid response.

More generally, the Commission's MFA proposals build on lessons learnt from ex-post evaluations carried out on past operations in the EU's neighbourhood. The new MFA, and the economic adjustment and reform programme attached to it, will help alleviate Jordan’s short-term financing needs while supporting policy measures aimed at strengthening medium-term balance of payments and fiscal sustainability and raising sustainable growth, thus complementing the programme of the IMF Executive Board. These policy conditions should address some of the fundamental weaknesses shown over the years by the Jordanian economy and economic governance system. Possible areas of conditionality could, in principle, include reforms to improve economic governance, including public finance management and tax administration, social and labour market policies, business environment and energy/green transition.

Countries that are covered by the European Neighbourhood Policy are eligible for MFA. A pre-condition for granting MFA is that the eligible country respects effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and guarantees respect for human rights.

Jordan has continued its political reform efforts to strengthen parliamentary democracy and the rule of law. In 2021, Jordan launched a political modernisation process aspiring to foster political participation of women and youth, to overcome tribal allegiance and encourage the formation of nationwide programme-based political parties, introduced through amendments to the Elections and Political Parties Laws. In 2023, the government amended the Labour Code in line with international human rights standards. Despite a very challenging context, Jordan remains committed to advancing reforms towards a more effective democratic political system based on the rule of law and respect for human rights. In this context, the political preconditions for MFA are considered to be satisfied.

The proposed MFA operation of up to EUR 500 million in loans for Jordan is planned to be disbursed in three instalments to be released over a period of up to 2.5 years. The loan will be provided under the External Action Guarantee with a provisioning at a rate of 9%, which will be programmed under the NDICI-GE, for a total amount of EUR 45 million (budget line 14 02 01 70 ‘NDICI – Provisioning of the Common Provisioning Fund’). The loans shall be granted in the form of amortising loans with a grace period and subsequent capital repayments in equal tranches over a long period. Such a loan structure will be beneficial for both the beneficiary in that it facilitates repayments, and the EU budget, by spreading contingent liabilities over a long time-frame.

The European Union will make the MFA available to Jordan for a total amount of up to EUR 500 million, provided in the form of loans, which will contribute to covering Jordan’s residual external financing needs in the operation’s availability period. The assistance is planned to be disbursed in three instalments, provided that the policy measures attached to each instalment have been fully implemented in a timely manner. The assistance will be managed by the Commission. Specific provisions on the prevention of fraud and other irregularities, consistent with the Financial Regulation, are applicable.

Disbursements under the proposed MFA operation will be conditional on successful programme reviews under the IMF programme. In addition, the Commission and the Jordanian authorities will agree on a specific set of structural reform measures, to be set out in a Memorandum of Understanding. These reform measures should support the authorities’ reform agenda and complement the programmes agreed with the IMF, the World Bank and other donors, as well as the policy programmes associated with the EU’s budgetary support operations. They should be consistent with the main economic reform priorities agreed between the EU and Jordan in the Association Agreement, the Partnership Priorities and annexed Compact, the SCP and Jordan's Modernisation Vision and other national strategies.

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on providing macro-financial assistance to the Hashemite Kingdom of Jordan

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,

After transmission of the draft legislative act to the national parliaments,

Acting in accordance with the ordinary legislative procedure ⁸ ,

Whereas:

1. Relations between the European Union (‘the Union’) and the Hashemite Kingdom of Jordan (‘Jordan’) are developing within the framework of the European Neighbourhood Policy (ENP). The Union and Jordan signed an Association Agreement on 24 November 1997, which entered into force on 1 May 2002 ⁹ . Under the Association Agreement, the Union and Jordan gradually established a Free Trade Area over a transitional period of 12 years. In addition, an agreement on further liberalisation of agricultural products entered into force in 2007. In 2010, an Advanced Status partnership was agreed between the Union and Jordan that entails expanded areas of cooperation. A protocol on Dispute Settlement Mechanisms for trade between the Union and Jordan initialled in December 2009 entered into force on 1 July 2011. Bilateral political dialogue and economic cooperation have been further developed within the framework of the Association Agreement, the EU-Jordan Partnership Priorities adopted for 2022-2027 and the Strategic and Comprehensive Partnership, signed in January 2025.

2. Since 2011, Jordan has embarked on a number of political reforms to strengthen parliamentary democracy and the rule of law. A Constitutional Court and an Independent Electoral Commission have been set up and a number of major laws, including the Electoral Act and the Political Parties Act as well as laws on decentralisation and municipalities, have been passed by the Jordanian Parliament. Legislative improvements as regards the independence of the judiciary and women’s rights have been adopted.

3. The Jordanian economy has been heavily affected by prolonged regional instability, notably the conflict in Syria and, the conflict in Israel-Gaza, along with security disruptions in the Red Sea. These instabilities have added further uncertainty, undermining investor confidence, disrupting trade routes, and weakening tourism. These challenges have come on top of lingering economic and social impacts from the COVID-19 pandemic global price shocks following Russia’s invasion of Ukraine, and higher borrowing costs linked to tighter global financial conditions. More recently, increased uncertainty of the global environement also represents an additional challenge. While Jordan has avoided a renewed economic contraction, in part thanks to the pursuit of sound macro-economic policies and reforms, the recovery remains sluggish. Unemployment remains persistently high, particularly among youth and women, and fiscal and external financing pressures continue to weigh on the economy.

4. The conflict in Israel-Gaza alongside the renewed violence in the region, notably escalating tensions between Israel and Iran in mid-June 2025, led to flight suspensions in Jordan and is likely to further complicate the country’s fragile economic recovery, dampen investor and tourist confidence, and contribute to an increasingly uncertain outlook. Social tensions in Jordan have remained low but could rise if the ongong conflicts were to further escalate. Furthermore, climate-change risks exacerbating Jordan’s already dire water scarcity could hurt growth and add further pressures on government finances.

5. In January 2024, the Jordanian authorities and the IMF agreed on a economic adjustment programme supported by a four-year Extended Fund Facility (EFF) in the amount of USD 1.2 billion, which is currently being implemented. As of July 2025, Jordan's performance under the EFF has been strong, with all quantitative performance criteria and structural benchmarks met across the first three programme reviews (July and December 2024, and April 2025), triggering disbursements totalling USD 391 million out of the approved USD 1.2 billion.

6. In April 2025, the Union adopted a fourth programme of macro-financial assistance (MFA-IV) ¹⁰ of EUR 500 million in the form of loans, in response to a request from Jordan in October 2023. The disbursements are planned over 2025–2027, upon fulfilment of agreed policy conditions in the Memorandum of Understanding, covering measures in public finance management, governance and anti-corruption, social and labour market policies, energy and business environment. The MFA IV follows from a series of three previous MFA programmes (MFA I: EUR 180 million; MFA II: EUR 200 million; MFA III: EUR 500 million + EUR 200 million top-up in response to COVID-19) provided a total of EUR 1.08 billion in loans between 2014 and 2023.  

7. Since the beginning of the Syrian crisis in 2011, the Union has made available approximately EUR 3.5 billion to Jordan under different instruments (including EUR 1.08 million under the three MFA operations) to help the country preserve economic stability, sustain political and economic reform and address its related humanitarian, development and security needs. In addition, the European Investment Bank has allocated around EUR 2.4 billion in project loans to Jordan since 2011. 

8. For the period 2021-2024, Union’s bilateral indicative allocation (grants) under the Neighbourhood Development and International Cooperation Instrument – Global Europe (NDICI-GE) to Jordan amounts to around EUR 360 million and is complemented by Union’s support to help Jordan address the impact of the Syrian crisis (EUR 214 million from 2021 to 2023) as well as other regional and thematic programmes. During the period 2014-2020, the Union provided support to Jordan mainly through the European Neighbourhood Instrument with EUR 765 million. During the same period, Jordan also benefitted from additional EUR 126 million channelled via the Neighbourhood Investmen Platform (NIP), which leveraged around EUR 580 million in investments. In 2021, under the Economic and Investment Plan (EIP), the EU launched more than 20 flagship projects in Jordan, committing approximately EUR 461 million (via grants, blending and guarantees) and leveraging around EUR 4.760 billion in total investment.

9. In January 2025, in view of the still difficult economic situation and outlook, Jordan requested additional macro-financial assistance from the Union.

10. Given that Jordan is a country covered by the ENP, it should be considered to be eligible to receive macro-financial assistance from the Union.

11. The Union’s macro-financial assistance should be an exceptional financial instrument of untied and undesignated balance-of-payments support, which aims at addressing the beneficiary’s immediate external financing needs and should underpin the implementation of a policy programme containing strong immediate adjustment and structural reform measures designed to improve the balance-of-payments position in the short term.

12. Given that a residual external financing gap remains in Jordan’s balance of payments over and above the resources provided by IMF and other multilateral institutions, the provision by the Union of additional macro-financial assistance to Jordan is, under the current exceptional circumstances, considered to be an appropriate response to Jordan’s request to the Union to support its economic stabilisation, in conjunction with the IMF programme. The Union’s enlarged macro-financial assistance would support the economic stabilisation and the structural reform agenda of Jordan, supplementing resources made available under the IMF’s financial arrangement.

13. The Union’s macro-financial assistance should aim to support the restoration of a sustainable external financing situation for Jordan thereby supporting its economic and social development.

14. The Union’s macro-financial assistance is expected to go hand-in-hand with the implementation of budget support operations under NDICI-GE established by Regulation (EU) 2021/947 of the European Parliament and of the Council ¹¹ .

15. The determination of the amount of the Union’s macro-financial assistance is based on a complete quantitative assessment of Jordan’s residual external financing needs, and takes into account its capacity to finance itself with its own resources, in particular the international reserves at its disposal. The Union’s macro-financial assistance should complement the programmes and resources provided by the IMF and the World Bank. The determination of the amount of the assistance also takes into account expected financial contributions from bilateral and multilateral donors and the need to ensure fair burden sharing between the Union and other donors, as well as the pre-existing deployment of the Union’s other external financing instruments in Jordan and the added value of the overall Union involvement.

16. The Commission should ensure that the Union’s macro-financial assistance is legally and substantially in accordance with the key principles and objectives, and of the measures taken within, the different areas of external action and other relevant Union policies.

17. The Union’s macro-financial assistance should support the Union’s external policy towards Jordan. Commission services and the European External Action Service (EEAS) should work closely together throughout the macro-financial assistance operation in order to coordinate, and to ensure the consistency of, Union external policy.

18. The Union’s macro-financial assistance should support Jordan’s commitment to values shared with the Union, including democracy, the rule of law, good governance, respect for human rights, sustainable development and poverty reduction, as well as its commitment to the principles of open, rule-based and fair trade.

19. A pre-condition for granting the Union’s macro-financial assistance should be that Jordan respects effective democratic mechanisms – including a multi-party parliamentary system – and the rule of law, and guarantees respect for human rights. In addition, the specific objectives of the Union’s macro-financial assistance should strengthen the efficiency, transparency and accountability of the public finance management systems in Jordan and promote structural reforms aimed at supporting sustainable and inclusive growth, employment creation and fiscal consolidation. Both the fulfilment of the pre-conditions and the achievement of those objectives should be regularly monitored by the Commission and the EEAS.

20. In order to ensure that the Union’s financial interests linked to the Union’s macro-financial assistance are protected efficiently, Jordan should take appropriate measures relating to the prevention of, and fight against, fraud, corruption and any other irregularities linked to the assistance. In addition, a loan agreement to be concluded between the Commission and the Jordanian authorities should contain provisions authorising European Anti-Fraud Office (OLAF) to carry out investigations, including on-the-spot checks and inspections, in accordance with the provisions and procedures laid down in Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council ¹²  and Council Regulation (Euratom, EC) No 2185/966 ¹³ , the Commission and the Court of Auditors to carry out audits and the European Public Prosecutor’s Office to exercise its competences with regard to the provision of the Union’s macro-financial assistance during and after its availability period.

21. Release of the Union’s macro-financial assistance is without prejudice to the powers of the European Parliament and the Council (as budgetary authority).

22. The amounts of provisioning required for the Union’s macro-financial assistance should be consistent with the budgetary appropriations provided for in the multiannual financial framework. 

23. The Union’s macro-financial assistance should be managed by the Commission. In order to ensure that the European Parliament and the Council are able to follow the implementation of this Decision, the Commission should regularly inform them of developments relating to the assistance and provide them with the relevant documents.

24. In order to ensure uniform conditions for the implementation of this Decision, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council ¹⁴ .

25. The Union’s macro-financial assistance should be subject to economic policy conditions, to be laid down in a Memorandum of Understanding. In order to ensure uniform conditions of implementation and for reasons of efficiency, the Commission should be empowered to negotiate such conditions with the Jordanian authorities under the supervision of the committee of representatives of the Member States in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council. Considering the potentially significant impact of assistance, it is appropriate that the examination procedure as specified in Regulation (EU) No 182/2011 be used. Considering the amount of the Union’s macro-financial assistance to Jordan, the examination procedure should apply to the adoption of the Memorandum of Understanding, and to any reduction, suspension or cancellation of the assistance.

HAVE ADOPTED THIS DECISION:

Article 1

1. The Union shall make macro-financial assistance of a maximum amount of EUR 500 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.

2. The full amount of the Union’s macro-financial assistance shall be provided to Jordan in the form of loans.

3. The Commission shall be empowered, on behalf of the Union, to borrow the necessary funds on the capital markets or from financial institutions and to on-lend them to Jordan.

4. The release of the Union’s macro-financial assistance shall be managed by the Commission in a manner consistent with the agreements or understandings reached between the International Monetary Fund (IMF) and Jordan, and with the key principles and objectives of economic reforms set out in the EU-Jordan Association Agreement.

5. The Commission shall regularly inform the European Parliament and the Council of developments regarding the Union’s macro-financial assistance, including disbursements thereof, and shall provide those institutions with the relevant documents in due time.

6. The Union’s macro-financial assistance shall be made available for a period of two and a half years, starting from the first day after the entry into force of the Memorandum of Understanding referred to in Article 3(1).

7. If the financing needs of Jordan decrease fundamentally during the period of the disbursement of the Union’s macro-financial assistance compared to the initial projections, the Commission shall adopt implementing acts to reduce the amount of the assistance or suspend or cancel it. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 7(2).

Article 2

1. A pre-condition for granting the Union’s macro-financial assistance shall be that Jordan respects effective democratic mechanisms – including a multi-party parliamentary system – and the rule of law, and guarantees respect for human rights.

2. The Commission’s services and the European External Action Service shall monitor the fulfilment of this pre-condition throughout the life cycle of the Union’s macro-financial assistance.

3. Paragraphs 1 and 2 of this Article shall be applied in accordance with Council Decision 2010/427/EU ¹⁵ .

Article 3

1. The Commission, in accordance with the examination procedure referred to in Article 7(2), shall agree with the Jordanian authorities on 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’) which shall include a timeframe for the fulfilment of those conditions. 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(4), including the macroeconomic adjustment and structural reform programmes implemented by Jordan with the support of the IMF.

2. The conditions referred to in paragraph 1 shall aim, in particular, at enhancing the efficiency, transparency and accountability of the public finance management systems in Jordan, including for the use of the Union’s macro-financial assistance. Progress in mutual market opening, the development of rules-based and fair trade, and other priorities in the context of the Union’s external policy shall also be duly taken into account when designing the policy measures. Progress in attaining those objectives shall be regularly monitored by the Commission.

3. The detailed financial terms of the Union’s macro-financial assistance shall be laid down in a loan agreement in accordance with Article 223  of Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council ¹⁶ , to be concluded between the Commission and the Jordanian authorities.

4. The Commission shall verify, at regular intervals, that the conditions referred to in Article 4(3) continue to be met, including whether the economic policies of Jordan are in accordance with the objectives of the Union’s macro-financial assistance. In so doing, the Commission shall coordinate closely with the IMF and the World Bank, and, where necessary, with the European Parliament and the Council.

Article 4

1. Subject to the conditions referred to in paragraph 3 of this Article, the Union’s macro-financial assistance shall be made available by the Commission in three loan instalments. The size of each instalment shall be laid down in the Memorandum of Understanding referred to in Article 3(1).

2. The amounts of the Union’s macro-financial assistance shall be provisioned, where required, in accordance with Regulation (EU) 2021/947.

3. The Commission shall decide on the release of the instalments subject to the fulfilment of all the following conditions:

   1. the pre-condition set out in Article 2(1);

   2. a continuous satisfactory track record of implementing a policy programme that contains strong adjustment and structural reform measures supported by a non-precautionary IMF credit arrangement;

   3. the satisfactory implementation of the economic policy and financial conditions agreed in the Memorandum of Understanding.

The release of the second instalment shall not, in principle, take place earlier than three months after the release of the first instalment. The release of the third instalment shall not, in principle, take place earlier than three months after the release of the second instalment.

4. Where the conditions referred to in paragraph 3 of this Article, first subparagraph, 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 the suspension or cancellation.

5. The Union’s macro-financial assistance shall be disbursed to the Central Bank of Jordan. Subject to the provisions to be agreed in the Memorandum of Understanding, including a confirmation of residual budgetary financing needs, the Union funds may be transferred by the Central Bank of Jordan to the Jordanian Ministry of Finance as the final beneficiary.

Article 5

1. In order to finance the Union’s macro-financial assistance in the form of loans, the Commission shall be empowered, on behalf of the Union, to borrow the necessary funds on the capital markets or from financial institutions in accordance with Article 223 of Regulation (EU, Euratom) 2024/2509. 

2. The Commission shall enter into a loan agreement with Jordan in respect of the amount referred to in Article 1. The loan agreement shall lay down the availability period and the detailed terms of the support under the macro-financial assistance in the form of loans, including in relation to the internal control systems. The loans shall be granted at terms that allow Jordan to repay the loan over a long period, including a possible grace period. The maximum duration of each disbursement of the loans shall be 35 years from the date of disbursment.

3. The Commission shall inform the European Parliament and the Council of developments in the operations referred to in paragraphs 1 and 2.

Article 6

1. The Union’s macro-financial assistance shall be implemented in accordance with Regulation (EU, Euratom) 2024/2509 ¹⁷ .

2. The Union’s macro-financial assistance shall be implemented under direct management.

3. Before the implementation of the Union’s macro-financial assistance, the Commission shall assess, by means of an operational assessment, the soundness of Jordan’s financial arrangements, the administrative procedures, and the internal and external control mechanisms which are relevant to the assistance.

Article 7

1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011.

2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

Article 8

1. By 30 June of each year, the Commission shall submit to the European Parliament and to the Council a report on the implementation of this Decision in the preceding year, including an evaluation of that implementation. The report shall:

   1. examine the progress made in implementing the Union’s macro-financial assistance to Jordan;

   2. assess the economic situation and prospects of Jordan, as well as progress made in implementing the economic policy and financial conditions referred to in Article 3(1);

   3. indicate the connection between the economic policy conditions laid down in the Memorandum of Understanding, Jordan’s ongoing economic and fiscal performance and the Commission’s decisions to release the instalments of the Union’s macro-financial assistance.

2. Not later than two years after the expiry of the availability period referred to in Article 1(6), the Commission shall submit to the European Parliament and to the Council an ex-post evaluation report, assessing the results and efficiency of the completed Union’s macro-financial assistance and the extent to which it has contributed to the aims of the assistance.

Article 9

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

Done at Brussels,

LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT

FRAMEWORK OF THE PROPOSAL/INITIATIVE3

Title of the proposal/initiative3

Policy area(s) concerned3

Objective(s)3

General objective(s)3

Specific objective(s)3

Expected result(s) and impact3

Indicators of performance3

The proposal/initiative relates to:4

Grounds for the proposal/initiative4

Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative4

Added value of EU involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this section 'added value of EU involvement' is the value resulting from EU action, that is additional to the value that would have been otherwise created by Member States alone.4

Lessons learned from similar experiences in the past4

Compatibility with the multiannual financial framework and possible synergies with other appropriate instruments5

Assessment of the different available financing options, including scope for redeployment5

Duration of the proposal/initiative and of its financial impact6

Method(s) of budget implementation planned6

MANAGEMENT MEASURES8

Monitoring and reporting rules8

Management and control system(s)8

Justification of the budget implementation method(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed8

Information concerning the risks identified and the internal control system(s) set up to mitigate them8

Estimation and justification of the cost-effectiveness of the controls (ratio between the control costs and the value of the related funds managed), and assessment of the expected levels of risk of error (at payment & at closure)8

Measures to prevent fraud and irregularities9

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE10

Heading(s) of the multiannual financial framework and expenditure budget line(s) affected10

Estimated financial impact of the proposal on appropriations12

Summary of estimated impact on operational appropriations12

Appropriations from voted budget12

Appropriations from external assigned revenues17

Estimated output funded from operational appropriations22

Summary of estimated impact on administrative appropriations24

24

Appropriations from external assigned revenues24

Total appropriations24

Estimated requirements of human resources25

Financed from voted budget25

Financed from external assigned revenues26

Total requirements of human resources26

Overview of estimated impact on digital technology-related investments28

Compatibility with the current multiannual financial framework28

Third-party contributions28

Estimated impact on revenue29

Digital dimensions29

Requirements of digital relevance30

Data30

Digital solutions31

Interoperability assessment31

Measures to support digital implementation32

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

Specify the indicators for monitoring progress and achievements.

X a new action 

 a new action following a pilot project / preparatory action ¹⁸  

 the extension of an existing action 

 a merger or redirection of one or more actions towards another/a new action

X limited duration

• in effect for 2.5 years from the entry into force of the Memorandum of Understanding, as stated in Article (1.4) of the proposal for a Decision.

• Financial impact in 2027 both for commitment appropriations and payment appropriations.

X Direct management by the Commission

X by its departments, including by its staff in the Union delegations;

• Existing budget lines

In order of multiannual financial framework headings and budget lines.

• New budget lines requested – not applicable

•     The proposal/initiative does not require the use of operational appropriations

• X The proposal/initiative requires the use of operational appropriations, as explained below

EUR million (to three decimal places)

EUR million (to three decimal places)

Commitment appropriations in EUR million (to three decimal places)

• XThe proposal/initiative does not require the use of appropriations of an administrative nature

•     The proposal/initiative requires the use of appropriations of an administrative nature, as explained below

The appropriations required for human resources and other expenditure of an administrative nature will be met by appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the DG, together, if necessary, with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.

• X    The proposal/initiative does not require the use of human resources

•     The proposal/initiative requires the use of human resources, as explained below

Estimate to be expressed in full-time equivalent units (FTEs)

The staff required to implement the proposal (in FTEs):

Description of tasks to be carried out by:

The proposal/initiative:

• X    can be fully financed through redeployment within the relevant heading of the multiannual financial framework (MFF)

•     requires use of the unallocated margin under the relevant heading of the MFF and/or use of the special instruments as defined in the MFF Regulation

•     requires a revision of the MFF

The proposal/initiative:

• X    does not provide for co-financing by third parties

•     provides for the co-financing by third parties estimated below:

Appropriations in EUR million (to three decimal places)

3.3.    Estimated impact on revenue 

• X    The proposal/initiative has no financial impact on revenue.

•     The proposal/initiative has the following financial impact:

  •     on own resources

  •     on other revenue

  •     please indicate, if the revenue is assigned to expenditure lines

EUR million (to three decimal places)

Not applicable to this policy initiative.