The Official Journal of the European Union has published on May 27th 2009 Regulation nº 431/2009 of May 18th 2009, amending Regulation (EC) nº 332/2002 establishing a facility providing medium-term financial assistance for Member States' balances of payments. This amendment increases the limit for loans to be granted to Member States which have not adopted the Euro top 50 billion Euro in principal.

The scope and intensity of the international financial crisis affects the potential demand for Community medium-term financial assistance in the Member States outside the Euro area and calls for a significant raising of the ceiling for the outstanding amount of loans to be granted to Member States laid down in Council Regulation (EC) Nº 332/2002 from Euro 25 billion to Euro 50 billion.

The Community medium-term financial assistance facility enables loans to be granted to one or more Member States which are experiencing, or are seriously threatened with, difficulties in their balance of current payments or capital movements shall be established. Only Member States which have not adopted the Euro may benefit from this Community facility. EC Council has recently granted financial assistance based on regulation for medium-term assistance to the balances of payments of non-euro-area member states for Romania, Hungary and Latvia.

The Council also considers that the rules guiding some aspects of the financial management of Community financial assistance should be clarified. For operational reasons, the Member State concerned should be asked to place the financial assistance received in a special account with its National Central Bank and to transfer the amounts due to an account with the European Central Bank a few days prior to their due dates.

According to this Regulation, the Council, after examining the situation in the Member State concerned and the adjustment programme presented in support of its application, will decide, as a rule during the same meeting:

• Whether to grant a loan or appropriate financing facility, its amount and its average duration.
• The economic policy conditions attached to the mediumterm financial assistance with a view to re-establishing or ensuring a sustainable balance of payments situation.
• The techniques for disbursing the loan or financing facility, the release or drawing-down of which shall, as a rule, be by successive instalments, the release of each instalment being subject to verification of the results achieved in implementing the programme in terms of the objectives set.

The Commission and the Member State concerned will conclude a Memorandum of Understanding setting out in detail the conditions laid down by the Council. The Commission will afterwards communicate the Memorandum of Understanding to the European Parliament and the Council.

The Regulation provides for the possibility for the European Court of Auditors and the European Anti-Fraud Office (OLAF), when they deem necessary, to carry out controls in the Member State receiving Community medium-term financial assistance, as already provided for in the existing loan agreements, and without prejudice to the Statute of the European System of Central Banks and
of the European Central Bank. This measures aims to ensure sound management of the Community financial assistance received by Member states.