EU approves €100 million in budget support for Serbia and a € 85 million financial crisis package for the Western Balkans1 and Turkey
European Commission - IP/09/1213 31/07/2009
Brussels, 31 July 2009
EU approves €100 million in budget support for Serbia and a € 85 million financial crisis package for the Western Balkans 1 and Turkey
Today the European Commission has granted €100 million to Serbia as general budget support to help with the stabilisation of the country and ease the economic and social consequences of the crisis. The Commission has also approved a substantial package to assist acceding countries to tackle the current economic difficulties. The €85 million grant finance from the European Commission is part of the overall Crisis Response Package for the Western Balkans that should total €150 million in Commission grants and €600 million in loans from partner International Financial Institutions, such as the European Investment Bank and the EBRD. The financial crisis response package for Bosnia and Herzegovina for a total amount of EUR 39 million will be adopted in the coming days.
Budget support to Serbia
The budget deficit has been growing rapidly, due to the current crisis. Therefore a programme for macro economic stability supported by the IMF and the World Bank was established. The European Commission budget support will complement this initiative.
As EU Enlargement Commissioner Rehn said: "budget support funds will help Serbia pursue reforms related to integration with the EU which, during the current crisis, may otherwise have been postponed to a later date. In this way we support Serbia's efforts to keep its EU integration process on track during the economic crisis"
The main purpose of the EC budget support is to:
Full compliance with the IMF programme is an important condition for disbursements under the programme. Furthermore, in collaboration with the Serbian government, the Commission has established a number of specific conditions to be met before the disbursement of the assistance. These conditions focus on short-term reform in public finance management and on integration with the EU. Serbia will also ensure that the recently adopted laws on competition and state aid control are implemented and enforced. Serbia has also committed itself to maintaining and developing the administrative capacity of institutions and bodies relevant to its integration into the EU.
The €100 million has been allocated from the Instrument of Pre-accession (IPA) budget. Disbursement is scheduled to take place in two instalments, each worth EUR 50 million,, in the autumn of 2009 and in the first half of 2010, subject to the fulfilment of the conditions in the programme.
Crisis response package
The purpose of this financial package is to ensure:
These decisions will benefit Europe as a whole given that, as Enlargement Commissioner Olli Rehn, pointed out: "European businesses have generated substantial growth and employment in the Western Balkans and Turkey throughout the last decade. This has brought the region closer to Europe and has contributed to Europe's overall growth and prosperity. Preserving the region's economic and financial stability in times of crisis is therefore a key interest for the European Union".
Croatia, the former Yugoslav Republic of Macedonia, Albania, Bosnia and Herzegovina, Montenegro, Serbia and Kosovo (under UN Security Council Resolution 1244)