REPORT 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

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

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(2025)0456 - C10-0186/2025 - 2025/0251(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

- having regard to the Commission proposal to Parliament and the Council (COM(2025)0456),

- having regard to Article 294(2) and Article 212 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C10-0186/2025),

- having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

- having regard to Rule 60 of its Rules of Procedure,

- having regard to the report of the Committee on International Trade (A10-0245/2025),

1. Adopts its position at first reading, taking over the Commission proposal;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

EXPLANATORY STATEMENT

In an increasingly challenging global economic context, Jordan faces persistent structural challenges compounded by significant external shocks. While the country has maintained an estimated GDP growth rate of 2.5% in 2024 and is expected to record a similar rate in 2025, the country's population is growing faster than GDP growth, and this remains insufficient to address fundamental economic needs: notably reducing unemployment, which, although declining slightly to 21.4% in 2024 (from 22.0% in 2023), remains structurally high, and alleviating a substantial public debt burden currently estimated at around 90.4% of GDP.

These domestic challenges are further exacerbated by heightened regional tensions, including the war between Israel and Gaza, the escalation of tensions between Israel and Iran, the fragile ceasefire in Lebanon, and ongoing instability in Syria, which have had a negative impact on trade, tourism, and investor confidence. Therefore, Jordan is confronted with a combination of adverse factors with significant economic, political, social and demographic consequences, and should continue to benefit from appropriate and timely support as a reliable and stable partner of the European Union. Moreover, migratory pressure remains very high in the Kingdom, with 1.3 million refugees from Syria out of a total of 3.8 million refugees. This means that approximately one third of Jordan's population (which has a population of over 11 million) consists of refugees.

To support Jordan's economic stability and cover the country's residual financing needs over the operation's availability period, the Commission proposes a new macro-financial assistance (MFA) operation of up to EUR 500 million in loans, in addition to the previous MFA of EUR 500 million.

In line with previous MFA agreements, the European Parliament expects the Commission to provide full transparency and regular information about the progress towards implementation of the economic policy conditions to be agreed in a Memorandum of Understanding, as well as of the fulfilment of relevant pre-conditions for disbursement, specifically of the political pre-condition whether Jordan respects effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and guarantees respect for human rights.

For the record, given the series of external shocks and Jordan's strategic role in promoting regional stability, the country has received substantial international support over the past decade through various international partners. This includes four consecutive IMF programmes since 2012, four MFA operations by the EU since 2014 (prior to the present proposal), significant US assistance, and targeted support for hosting Syrian refugees.

- The first three MFA programmes (MFA I: EUR 180 million; MFA II: EUR 200 million; MFA III: EUR 500 million plus EUR 200 million top-up in response to the COVID-19 crisis) provided a total of EUR 1.08 billion in loans between 2014 and 2023. Moreover, following a request by the Jordanian authorities on 8 October 2023, the EU adopted a new MFA IV operation in 2025, amounting to EUR 500 million, with three disbursements planned over 2025-2027. The MFA IV will be disbursed upon fulfilment of agreed policy conditions in the Memorandum of Understanding (MoU), covering measures in public financial management, governance and anti-corruption, social and labour market policies, as well as in the energy and business environment.

- Jordan is also making good progress under the USD 1.2 billion IMF Extended Fund Facility (2024-2027), which has completed three positive reviews to date (the most recent concluded in April 2025). Furthermore, on 25 June 2025, the IMF approved approximately USD 700 million under the Resilience and Sustainability Facility (RSF) to support reforms addressing climate-related and pandemic-preparedness risks.

- Although temporary uncertainty remains around the disbursement of US budget support in 2025, Jordan has successfully mobilized critical external financing from the World Bank and GCC partners.

This new MFA assistance is designed to address pressing economic challenges, including high public debt, a structurally elevated budget deficit (5.6% of GDP in 2024, an increase compared to 2023), and persistent external deficits (averaging around 6.5% of GDP over the last five years). It also aims to mitigate the fiscal constraints exacerbated by recent crises, such as the COVID-19 pandemic and regional instability.

The proposed MFA would complement the resources allocated to Jordan under the existing operation adopted by the European Parliament and the Council on 14 April 2025 under Decision (EU) 2025/793 on providing MFA to the Hashemite Kingdom of Jordan amounting to EUR 500 million in loans to be disbursed during the period 2025-2027.

The political and economic conditions necessary for granting the proposed MFA are fulfilled, as confirmed by the Commission's evaluation of Jordan's current situation. The loan will be provided under the External Action Guarantee with a provisioning at a rate of 9%, amounting to EUR 45 million to be programmed under the NDICI-Global Europe instrument.

The MFA will have a validity period of two and a half years following the entry into force of the Memorandum of Understanding (MoU). The disbursement of funds will occur in three tranches, contingent upon the full and timely implementation of the agreed economic policies outlined in the MoU. These policies include ambitious reforms in key areas such as public governance, fiscal management, and anti-corruption efforts, ensuring that EU support contributes to Jordan's long-term economic resilience and stability.

Jordan is a key partner in the region, able to engage in dialogue with various geopolitical actors in the Middle East. Bilateral political dialogue and economic cooperation have been further developed within the framework of the Association Agreement, the EU-Jordan Partnership Priorities adopted for 2022-2027, and the Strategic and Comprehensive Partnership signed in January 2025. The proposed MFA therefore reflects the EU's strong commitment to supporting Jordan as a reliable partner in a highly volatile region.

ANNEX: DECLARATION OF INPUT

The rapporteur declares under her exclusive responsibility that she did not include in her report input from interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register[1], or from representatives of public authorities of third countries, including their diplomatic missions and embassies, to be listed in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

PROCEDURE - COMMITTEE RESPONSIBLE

FINAL VOTE BY ROLL CALL BY THE COMMITTEE RESPONSIBLE

Key to symbols:

+ : in favour

- : against

0 : abstention