Brussels, 04/12/2006 (Agence Europe) - The EU Council of Ministers adopted without debate on Thursday 30 November the decision allowing Kosovo to receive exceptional financial assistance in the form of a grant of up to €150 million. This Community financial assistance is to be available for two years. However, if circumstances so require, the Commission, after consultation of the Economic and Financial Committee, may decide to extend the availability period by a maximum of one year. Funding is intended to alleviate the financial situation in Kosovo, support the setting in place of a “sound economic and fiscal framework”, facilitate the continuation and strengthening of essential administrative functions and address public investment needs. It will provide crucial bridge support pending a settlement of Kosovo's status.
Although economic activity resumed after the conflict, Kosovo is at a low level of economic development. Kosovo is not in a position to borrow either domestically or on the international financial market and under its current status it is not eligible for membership in the international financial institutions. It cannot therefore benefit from lending assistance associated with their programmes.
The financial assistance will be managed by the Commission in close collaboration with the Council's Economic and Financial Committee and in compliance with agreements reached between the IMF and the Kosovo authorities. The proposal was adopted on 12 May this year by the Commission. The Parliament approved the assistance on 12 October (EUROPE 9286). The Commission has said that the aid would be financed by the EU budget with a transfer of funds within the external actions heading, i.e. without increasing funding being allocated to this heading. The proposal to re-allocate the financial assistance will be presented by the Commission to the budgetary authority in the near future. (lc)