EU disburses €90 million in Macro-Financial Assistance to Albania to address the economic fallout of the pandemic

EU disburses €90 million in Macro-Financial Assistance to Albania to address the economic fallout of the pandemic

The European Commission, on behalf of the EU, has today disbursed €90 million in Macro-Financial Assistance (MFA) to Albania.  This disbursement is the second and last tranche of a €180 million support programme to Albania, which is part of the €3 billion emergency MFA package for ten enlargement and neighbourhood partners aiming to help them limit the economic fallout of the COVID-19 pandemic. 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: “I am very pleased to see these funds flowing to Albania today. This disbursement is a demonstration of the EU’s solidarity with the Albanian people, but also of Albania’s commitment to deliver on the important reform agenda agreed with the European Commission.”

The first €90 million disbursement to Albania under this MFA programme took place in March 2021. Albania has fulfilled the policy conditions agreed with the EU for the release of this second and final €90 million disbursement under the COVID-19 MFA programme. These included important measures to strengthen public finance and the resilience of the financial sector, improve governance and fight corruption, and enhance social protection.

In addition, Albania continues to satisfy the pre-conditions for the granting of MFA as regards the respect of human rights and effective democratic mechanisms, including a multi-party parliamentary system and the rule of law. 

With today’s disbursement, the EU has completed eight out of the ten 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 all its MFA partners on the timely implementation of the agreed policy programmes.

Background

MFA is part of the EU’s wider engagement with neighbouring 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 MFA 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 its Neighbourhood policy and the Western Balkans through bilateral and regional assistance, thematic programmes, humanitarian aid, blending facilities and guarantees from the European Fund for Sustainable Development (EFSD and EFSD+) to support investment in the sectors most affected by the coronavirus pandemic.

EU-Albania relations

Albania is a candidate country for accession to the European Union. On 25 March 2020, the Council decided to open accession negotiations with Albania, a decision endorsed by the members of the European Council. Despite the challenges posed by the COVID-19 pandemic, Albania has continued to show its commitment to EU oriented reforms and delivered tangible and sustainable results. It has fulfilled all the conditions set out in the Council Conclusions of March 2020 for the first Inter-governmental Conference on accession negotiations.

The EU is Albania’s biggest donor. The EU provided financial assistance to Albania under the Instrument for Pre-accession Assistance (IPA) for the period 2007-2013 with a total allocation of €594 million. Under IPA II (2014-2020), Albania benefitted from support for investments, capacity building and reforms in sectors of: Rule of Law, Democracy and Governance, Competitiveness and Innovation, Agriculture and Rural Development, Transport, Environment, Education, Employment and the Social sectors. The total allocation under IPA II amounts to €758.1 million. This includes performance rewards, as well as €115 million which was mobilised to support the recovery following the 2019 earthquake. The indicative bilateral envelope for Albania under IPA 2021 amounts to €70.4 million.

The COVID-19 MFA programme for Albania is part of a comprehensive effort by the EU to help mitigate the economic and social impact of the pandemic and accelerate the recovery. This engagement is in accordance with the EU-Albania Stability and Association Agreement, and with the overall Team Europe’s support, which builds on joint efforts of EU Member States. Among others, Albania was one of the first countries to benefit from the EU vaccine-sharing mechanism, which together have contributed over 600,000 doses of COVID-19 vaccines to Albania, via donations, re-sales under an IPA grant, and via the COVAX facility which has provided over 140,000 further doses.

Source: €90 million in Macro-Financial Assistance to Albania (europa.eu)

Photo Credit : https://pixabay.com/nl/photos/gjirokast%c3%abr-albani%c3%ab-stad-3802128/

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