The European Commission adopted a proposal for a Framework Regulation for macro-financial assistance (MFA). The proposed Framework Regulation aims to make MFA faster and more effective by speeding up decision-making for individual MFA operations. MFA is a financing instrument under which exceptional financial assistance is granted to third countries close to the EU that are experiencing balance-of-payments difficulties.

The proposed Regulation is part of the EU’s endeavour to better adapt its tool-kit of external financial instruments to current challenges. Olli Rehn, Commissioner for Economic and Monetary Affairs underlined that it is important to further strengthen the MFA operations and enhance the effectiveness of this crisis instrument because EU's macro-financial assistance has made a valuable contribution to macroeconomic stability in candidate, potential candidate and neighbourhood countries, with positive spill-over effects on the EU economy.

In addition, the proposed Framework Regulation would also update and clarify some of them, notably with respect to the geographical scope of MFA. The countries eligible for MFA would be the candidate and potential candidate countries and the countries covered by the European Neighbourhood Policy, including the three South Caucasus countries. Other third countries would continue to be eligible only under exceptional and duly justified circumstances, and provided they are geographically close to the EU and entertain close political and economic links with it.

The MFA complements financing provided by the International Monetary Fund (IMF) in the context of an adjustment and reform programme. MFA can take the form of grants, financed by the EU budget, or loans, for which the Commission borrows the necessary funds in capital markets and on-lends them to the beneficiary country.

MFA operations have been based on a number of principles defined by the Council, the so-called “Genval criteria”, which were last stated in the conclusions of the ECOFIN Council of 8 October 2002. The proposed Framework Regulation, which requires adoption by both the European Parliament and the Council, would formalise these rules, thereby increasing their transparency, while ensuring that they are co-owned by the European Parliament.