EU disburses €125 million in Macro-Financial Assistance to Bosnia and Herzegovina
The European Commission, on behalf of the EU, has disbursed €125 million in macro-financial assistance (MFA) to Bosnia and Herzegovina. This disbursement is part of the €3 billion emergency MFA package for ten enlargement and neighbourhood partners, which aims to help them respond to the economic impact of the COVID-19 pandemic. MFA support is provided through loans at very favourable rates. The programme is a concrete demonstration of the EU’s solidarity with its partners to help respond to the economic impact of the COVID-19 pandemic.
Paolo Gentiloni, Commissioner for the Economy, said: “This disbursement of €125 million in financial support represents an important act of solidarity with the people of Bosnia and Herzegovina. It is an important contribution towards repairing some of the economic and social damage inflicted by the COVID-19 pandemic. We look forward to working with the national authorities in the coming months to deliver the policy actions needed to further enhance the country’s macroeconomic stability.”
The disbursement of this first instalment follows the agreement and ratification of a Memorandum of Understanding (MoU) between the Commission and Bosnia and Herzegovina. The MoU lays out the specific policy measures that Bosnia and Herzegovina will implement to improve economic governance, financial sector stability, transparency and fight against corruption and a better functioning of the labour market. The disbursement of the second and final instalment of €125 million will be conditional on the implementation of these policy measures. The implementation of these policy measures will require close cooperation among Bosnia and Herzegovina’s authorities at all levels of government.
With this disbursement, the EU has successfully completed five out of the 10 MFA programmes in the €3 billion COVID-19 MFA package, and disbursed the first tranches to all partners.
The Commission continues to work closely with the rest of its MFA partners on the timely implementation of the agreed policy programmes.
Background
Macro-financial assistance is part of the EU’s wider engagement with neighbourhood and enlargement partners and is intended as an exceptional crisis response instrument. It is available to enlargement and EU neighbourhood partners experiencing severe balance-of-payments problems. It demonstrates the EU’s solidarity with these partners and the support of effective policies at a time of unprecedented crisis.
The decision to provide macro-financial assistance to ten enlargement and neighbourhood partners in the context of the COVID-19 pandemic was proposed by the Commission on 22 April 2020 and adopted by the European Parliament and the Council on 25 May 2020.
In addition to MFA, the EU supports the partners in Neighbourhood and the Western Balkans through several other instruments, including humanitarian aid, budget support, thematic programmes, technical assistance, blending facilities and guarantees from the European Fund for Sustainable Development to support investment in the sectors most affected by the coronavirus pandemic.
EU-Bosnia and Herzegovina relations
In addition to the envisaged MFA loan of €250 million, the EU has already provided €95 million in grants to Bosnia and Herzegovina to support the country in its fight against the COVID-19 pandemic. In addition to the €13.7 million EU4Health grant for vaccines, the EU provided €7.76 million to address medical needs (over 6 million pieces of personal protective equipment, 66 ventilators, 75 ECG monitors, 20 portable ultrasound machines and other equipment). €73.5 million has been committed to support the socio-economic recovery.
The continued delivery of EU-funded vaccines is also a concrete sign of EU solidarity. Overall, Bosnia and Herzegovina also received almost 1.3 million doses of vaccines donated by the EU and its Member States. Bosnia and Herzegovina is also invited to join the EU Digital Covid Certificate system.