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 from the Commission,

Having regard to the Opinion of the European Parliament,

After consulting the Economic and Financial Committee,

Whereas:

Relations between Serbia and the European Union (EU) are developing within the framework of the Stabilisation and Association Process and the European Partnership; Serbia and the Commission signed on 29 April 2008 a Stabilisation and Association Agreement and the Interim Agreement on Trade and Trade related Matters.

The Serbian economy has been increasingly hit by the international financial crisis since the second half of 2008, with declining output, falling fiscal revenues and rising external financing needs.

Serbia’s economic stabilisation and recovery is supported by financial assistance of the International Monetary Fund (IMF). In November 2008, the Serbian authorities agreed initially with the IMF on a new Stand-By Arrangement which was approved in January 2009.

Following a further deterioration of the economic situation and a necessary revision of the programme’s underlying economic assumptions as well as higher external financing needs, an agreement was reached between Serbia and the IMF in March 2009 to turn the Stand-By Arrangement into a EUR 3 billion disbursing programme, which was approved on 15 May 2009 by the IMF Board.

The Community intends to provide in 2009 and 2010 Instrument for Pre-Accession (IPA) budget support grants of a total of EUR 100 million.

Serbia has requested additional Community macro-financial assistance in view of the worsening economic situation and outlook.

Given that a residual financing gap remains in the balance of payments in 2010, macro-financial assistance is considered an appropriate response to Serbia’s request under the current exceptional circumstances to support economic stabilisation in conjunction with the current IMF programme. The present financial assistance is also expected to contribute to alleviating budgetary financing needs.

In order to ensure efficient protection of the Community’s financial interests linked to the present financial assistance, it is necessary to provide for appropriate measures by Serbia related to the prevention of, and the fight against, fraud, corruption and any other irregularities linked to this assistance, as well as for controls by the Commission and audits by the Court of Auditors.

The release of the Community financial 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: