Introductory text

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof,

Having regard to the proposal of the Commission,

Having regard to the opinion of the European Parliament^f1,

Whereas:

The Commission consulted the Economic and Financial Committee before submitting its proposal.

The Council, by Decision 1999/282/EC^f2, approved, in the aftermath of the Kosovo crisis, macro-financial assistance for Albania of up to EUR 20 million in the form of a long-term loan facility. In the light of a better-than-expected balance of payments situation, the Albanian authorities did not request the release of this assistance; therefore, the Commission deprogrammed it in 2001.

Within the Stabilisation and Association process, the framework for EU relations with the region, it is desirable to support efforts to sustain political and economic stabilisation in Albania, with a view to evolving towards the development of a full cooperation relationship with the Community; this is also the aim of the Stabilisation and Association Agreement which is currently under negotiation between Albania and the EU.

The International Monetary Fund (IMF) approved on 21 June 2002 in favour of Albania a three-year programme supported by a Poverty Reduction and Growth Facility (PRGF) for an amount of about USD 36 million, to support the authorities' economic programme over the period from June 2002 to June 2005; out of this amount, USD 11 million are projected to be disbursed in 2004.

In the framework of the new three-year Country Assistance Strategy (CAS) adopted by the World Bank Board on 20 June 2002, USD 8 million are projected to be disbursed in 2004 under the Poverty Reduction Support Credit.

Over and above these estimated financial supports projected to be provided by the International Monetary Fund and the World Bank, a significant residual financing gap remains in 2004, to be covered to support the policy objectives attached to the authorities' reform efforts.

The Community already provided macro-financial assistance to Albania; the authorities of Albania have requested further financial assistance from the international financial institutions, the Community, and other bilateral donors.

Community macro-financial assistance to Albania is an appropriate measure to help the country meet its external financing needs, including through a reinforcement of its reserves and budget support.

Financial assistance from the Community in the form of a combination of a long-term loan and a straight grant is an appropriate measure to support the sustainability of Albania's external financial position, given the country's relatively low level of development.

This financial support, in particular the grant component, should be provided after verifying whether the financial and economic conditions lay down can be fulfilled.

In order to ensure efficient protection of the Community's financial interests linked to the present macro-financial assistance, it is necessary to provide for appropriate measures by Albania related to the prevention of fraud and other irregularities linked to this assistance, as well as for controls by the Commission and audits by the Court of Auditors.

The inclusion of a grant component in this assistance is without prejudice to the powers of the budgetary authority.

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

The Treaty does not provide, for the adoption of this Decision, powers other than those of Article 308,

HAS DECIDED AS FOLLOWS: