On the proposal for a decision of the European Parliament and of the Council on providing macro-financial assistance to the Hashemite Kingdom of Jordan

for the Committee on International Trade on the proposal for a decision of the European Parliament and of the Council on providing macro-financial assistance to the Hashemite Kingdom of Jordan

(COM(2024)0159 – C90146/2024 – 2024/0086(COD))

The Committee on Budgets has carried out a budgetary assessment of the proposal under Rule 58 of the Rules of Procedure and has reached the following conclusions:

A.whereas Jordan continues to face significant external financing needs and economic challenges, with a current account deficit of 7.1 % of gross domestic product (GDP) in the first half of 2023, driven by persistent deficits in trade in goods; whereas Jordan’s public debt burden remains high at 88.7 % of GDP in 2023, raising concerns about long-term fiscal sustainability;

B.whereas Jordan’s narrow revenue base, with domestic tax revenue at only 16 % of GDP, raises concerns about long-term fiscal sustainability and capacity to service external debts;

C.whereas the policy measures associated with macro-financial assistance (MFA) cover selected provisions related to the Association Agreement and the EU-Jordan Partnership Priorities 2021-2027;

D.whereas significant structural challenges hinder economic growth, with deficiencies in the business environment, access to finance, labour market flexibility and public administration; whereas unemployment remains high, especially among women, youth and university graduates, with women’s labour force participation at just 14 % in 2023, among the lowest globally; whereas the EU-Jordan Partnership Priorities 2021-2027 aim to address these issues by fostering decent work, innovation, skills development and comprehensive social protection systems;

E.whereas the EU-Jordan Partnership Priorities 2021-2027 highlight cooperation in inter-religious and intercultural dialogue and the protection of cultural heritage as drivers of peace and sustainable development; whereas these efforts can include safeguarding historical manuscripts and archives, contributing to inclusive dialogue and mutual understanding;

F.whereas Jordan’s economy has suffered significantly from protracted conflicts and crises in the region, notably in neighbouring Syria, and most recently in Israel/Gaza and the Red Sea; whereas these pose further risks to Jordan’s economic outlook, particularly affecting tourism and trade, with disruptions to exports and vessel traffic;

G.whereas the severe deterioration of external accounts and Jordan’s strategic importance for regional stability justify this support package;

H.whereas the conflicts in Gaza and the wider region have been exacerbating socioeconomic challenges in Jordan given its geographical position;

1.Notes that the Commission proposal of EUR 500 million in MFA requires EUR 45 million in provisioning under the External Action Guarantee from the Neighbourhood, Development and International Cooperation Instrument – Global Europe; points out that the evolving financial and economic realities in Jordan might require a revision of the proposed amount of MFA, consequently having an effect on provisioning;