Decision 2016/2371 - Further macro-financial assistance to Jordan - Main contents

EN

Official Journal of the European Union

L 352/18

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). Jordan signed an Association Agreement (2) with the Union on 24 November 1997, which came into force on 1 May 2002. Under that 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 (3) entered into force in 2007. In 2010, an Advanced Status partnership was agreed between the EU and Jordan that entails expanded areas of cooperation. A protocol on Dispute Settlement Mechanisms for trade between the EU 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 and the Single Support Framework adopted for 2014-2017.

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 Election Commission have been set up and a number of major laws, including the Election Law and the Law on Political Parties as well as laws on decentralisation and municipalities, have been passed by the Jordanian Parliament.

The Jordanian economy has suffered significantly from the ongoing regional unrest, notably in neighbouring Iraq and Syria. Together with a weaker global environment, this regional unrest has taken a heavy toll on external receipts and has strained public finances. Tourism and foreign direct investment inflows have been negatively affected, trading routes blocked and the flow of natural gas from Egypt disrupted. In addition, the Jordanian economy has also been impacted by a large inflow of Syrian refugees, which has increased pressure on its fiscal position, public services and infrastructure.

Since the outbreak of the conflicts in Syria in 2011, the Union has expressed its unequivocal commitment to supporting Jordan as it addresses the economic and social consequences of the Syrian crisis, and in particular of the presence of a large number of Syrian refugees in its territory. It has increased its financial support to Jordan, strengthening its cooperation in many fields, including the civil society, the electoral system, security, regional development and social and economic reforms. In addition, the Union has offered the possibility to Jordan of concluding a Deep and Comprehensive Free Trade Area agreement.

In this difficult economic and financial context, the Jordanian authorities and the International Monetary Fund (IMF) agreed in August 2012 on a first economic adjustment programme, which was supported by a 3-year Stand-By Arrangement (SBA) in the amount of USD 2 000 million. That programme was successfully completed in August 2015. Under that programme, Jordan made considerable progress with fiscal consolidation, also helped by the decline in oil prices, and with a number of structural reforms.

In December 2012, Jordan requested complementary macro-financial...