Legal provisions of COM(2013)708 - Precautionary EU medium-term financial assistance to Romania

Please note

This page contains a limited version of this dossier in the EU Monitor.

dossier COM(2013)708 - Precautionary EU medium-term financial assistance to Romania.
document COM(2013)708 EN
date October 22, 2013

Contents

Article 1

1. The Union shall make available to Romania precautionary medium-term financial assistance amounting to a maximum of EUR 2 000 million. In case the facility is activated and disbursements are provided, that assistance shall be provided in the form of a loan with a maximum average maturity of eight years.

2. Activation of the precautionary medium-term financial assistance and disbursements thereof may be requested until 30 September 2015.

Article 2

1. The precautionary medium-term financial assistance shall be managed by the Commission in a manner consistent with Romania's undertakings and the recommendations by the Council, in particular in the context of the implementation of Romania's National Reform Programme (NRP) and of the annual update of its Convergence Programme (CP).

2. The Commission shall agree with the Romanian authorities, after consulting the EFC, on the specific economic policy conditions attached to the precautionary medium-term financial assistance as listed under Article 3(3) of this Decision. Those conditions shall be laid down in a Memorandum of Understanding (MoU) consistent with the undertakings and recommendations referred to in paragraph 1 of this Article. The detailed financial terms shall be laid down by the Commission in a PLFA.

3. The Commission shall verify at regular intervals, in collaboration with the EFC, that the economic policy conditions attached to the precautionary medium-term financial assistance are fulfilled.

Article 3

1. The activation of the precautionary medium-term financial assistance shall be examined by the Commission, following a written request by Romania to the Commission. The Commission, after consulting the EFC, shall decide whether the activation of the assistance and the request for disbursements under that assistance are justified, and shall decide on the amount and timing of such disbursements. In the event that that assistance is being activated, the funds may be made available in not more than two instalments. Each instalment may be disbursed in one or more tranches.

2. Upon activation of the precautionary medium-term financial assistance, the Commission shall decide on the disbursement of the Union loan, or parts thereof, after having obtained the opinion of the EFC.

3. Any disbursement shall be made on the basis of a satisfactory implementation of the economic programme of the Government to be included in both the CP and the NRP.

Furthermore, the specific economic policy conditions laid down in the MoU, shall include, inter alia:

(a)the adoption of budgets and the implementation of policies in line with the fiscal consolidation path derived from Romania's obligations under the Stability and Growth Pact with a view to reaching Romania's medium-term budgetary objective by 2015, and to maintaining it thereafter;

(b)the full preservation of the measures agreed under the previous two programmes and the implementation of any remaining parts of yet unfulfilled conditionality;

(c)the further strengthening of the fiscal governance framework, including through the implementation of the Treaty on Stability, Coordination, and Governance, so as to ensure that fiscal consolidation is well anchored. Particular attention shall be given to reinforcing multi-annual budgetary planning, to the implementation of an effective commitment control system, to improving tax collection, and to improving the capital budgeting process;

(d)the implementation of the action plans adopted in response to the findings of the functional reviews carried out by the World Bank in 2010-2011 in a timely manner and the establishment of a central delivery unit to improve the government-wide policy prioritisation;

(e)the clearing of arrears and the strengthening of budget control mechanisms in the health sector through improved reporting and monitoring frameworks;

(f)the implementation of the strategic action plan for healthcare, rationalising the hospital structure and increasing the scope for primary care activities, in order to improve health outcomes;

(g)the improvement of public debt management with a view to reducing risks and to consolidating and extending the yield curve for sovereign debt;

(h)the further strengthening of the bank-resolution framework, the Central Bank of Romania's contingency planning and the corporate governance of the Deposit Guarantee Fund, as well as the implementation of measures to speed up the process of national banks' balance sheet cleaning and the preservation of credit discipline in the banking sector;

(i)the alignment of the legislation on the Financial Supervisory Authority to international good practices to strengthen the supervision of the non-banking financial market;

(j)the restructuring of state-owned enterprises (SOEs), including sales of stakes in their capital, and strengthening the corporate governance of SOEs;

(k)the further implementation of measures to improve the business environment, including through the reduction of administrative burdens for the small and medium-sized enterprises (SMEs), and measures to facilitate access to finance for SMEs.

4. If required in order to finance the loan, the prudent use of interest rate swaps with counterparties of highest credit quality shall be permitted. The EFC shall be kept informed by the Commission of possible refinancing of the borrowings or restructuring of the financial conditions.

Article 4

This Decision shall take effect on the day of its notification.

Article 5

This Decision is addressed to Romania.