EUROPEAN COMMISSION PROPOSES PROVIDING 100 MILLION EUROS OF MACROECONOMIC ASSISTANCE TO ARMENIA

Noyan Tapan
Oct 16, 2009

YEREVAN, OCTOBER 16, NOYAN TAPAN. The European Commission on October
14 proposed providing macroeconomic assistance to Armenia in the form
of a loan of 65 million euros and a grant of 35 million euros. The
aid to Armenia will support an adjustment program agreed between
the Armenian government and the IMF to help Armenia overcome the
consequences of the global crisis.

On the same day the European Commission adopted a draft decision,
by which it proposes providing macroeconomic assistance to Armenia –
a loan of 65 million euros and a grant of 35 million euros. The aid
will be allocated in two stages: in the first and fourth quarters of
2010 and will support the adjustment program agreed with the IMF. It
is allocated in addition to the IMF’s financial assistance to Armenia.

The proposed financing will increase the EU funds provided in budget
support to Armenia.

Since the last quarter of 2008, the global crisis has affected
Armenia. As the country’s economic performance and the external
conditions started worsening, the IMF approved a 540 million dollar
Stand-By Arrangement for Armenia in March 2009. A 15.6% decline in
Armenian GDP is forecast for 2009, the budget deficit will make up 7.5%
of GDP, while the current account’s deficit will reach 13.7% of GDP.