Jordan is one of the 16 partner countries whose relations with the EU are framed by the European Neighbourhood Policy (ENP). This country page presents information on DG ECFIN’s activities and economic cooperation with Jordan.
DG ECFIN conducts regular analysis on macroeconomic and financial developments in Jordan.
Through their regular macroeconomic dialogues, the EU and Jordan exchange views on their respective economic policies and outlooks, and on the major structural challenges that they face.
The 10th Macroeconomic Dialogue between the EU and Jordan took place on 5 May 2015. The European Commission presented the economic outlook in the EU based on the latest economic forecast and debriefed the Jordanian delegation on the state of play of the macro-financial assistance operation (see below). Part of the discussion was then devoted to economic reforms implemented by Jordan in the fields of energy efficiency, price subsidy, cash transfers and taxation. One of the conclusions of the dialogue was that such reforms, combined with macroeconomic stabilisation policies, have been efficient in preserving Jordan's economic stability and growth in an adverse regional environment.
Since the beginning of 2011, Jordan has been severely affected by regional economic shocks, notably the conflict in Syria, which resulted in an influx of refugees, and also repeated disruptions to natural gas imports from Egypt. Combined with the hike of the international energy prices in 2013-2014, these factors strained public finances and external accounts and gave rise to significant financing needs.
Following Jordan’s request for Macro-Financial Assistance (MFA) in December 2012, the European Commission, on 29 April 2013, proposed up to EUR 180 million in medium-term MFA loans for Jordan.
The negotiations on the Memorandum of Understanding (MoU) listing the economic policy measures to be undertaken by the Jordanian authorities and the Loan Facility Agreement (LFA) related to this MFA operation were concluded in early 2014, and the two documents were signed on 18 March 2014. The assistance supported reforms in the areas of public finance management and taxation; social safety nets and labour markets; investment frameworks and trade; and the energy sector. The first tranche of EUR 100 million was disbursed on 10 February 2015 while the second tranche of EUR 80 was disbursed on 15 October 2015.
The intensification of the regional conflicts in 2015 worsened further the economic situation in Jordan by affecting key sectors such as tourism and trade as well as investment inflows. At the same time, the inflow of Syrian refugees which continued in 2015 and 2016 created important financing needs while the balance of payments and fiscal position remained vulnerable. Following Jordan's request in March 2016, the European Commission proposed on 29 June 2016 an additional Macro-Financial Assistance (MFA-II) to Jordan of up to EUR 200 million in medium-term loans.
An ex-ante evaluation of this second MFA programme was conducted prior to the publication of the Commission proposal. The European Parliament and the Council formally approved the programme on 14 December 2016.
This assistance is part of a wider effort by the EU and other international donors, agreed at the London conference “Supporting Syria and the region” in February 2016, to help Jordan and other countries in the region mitigate the economic and social impact stemming from the regional conflicts and the presence of a large number of Syrian refugees in the country. On 19 December 2016 the EU and Jordan adopted their PartnershipPriorities,arenewed framework for political engagement and enhanced cooperation, as well as a Compact withmutual commitments by which the EU and Jordan will fulfil the pledges they made at the London conference. The EU-Jordan Compact foresees an EU commitment of at least EUR 747 million for 2016-2017 including EUR 200 million in Macro-Financial Assistance.
Since the beginning of the Syrian crisis in 2011, the EU has made available under different instruments more than EUR 1.55 billion to Jordan to help the country preserve economic stability, sustain political and economic reform and address its related humanitarian, development and security needs. In addition, the European Investment Bank has made available EUR 264 million in loans to Jordan.
The links below provide additional information on EU-Jordan relations: