Funding arrangements and the use of a diversified funding strategy

The European Parliament adopted by 462 votes to 121, with 75 abstentions, a legislative resolution on the draft Council regulation amending Council Regulation (EC) No 332/2002 as regards funding arrangements and the use of a diversified funding strategy.

The European Parliament gave its consent to the draft regulation of the Council.

Council Regulation (EC) No 332/2002 establishes a medium-term financial assistance facility allowing the granting of loans to one or more Member States which have not adopted the euro and are experiencing difficulties or are seriously threatened with difficulties in their balance of payments or in their balance of capital movements. The financing method of the facility is currently based on back-to-back financing.

Following the adoption of Regulation (EC) No 332/2002, the Commission was authorised to implement a different financing method for financing financial assistance programmes, allowing the Commission to decouple the timing and the maturity of single funding transactions from the disbursements to beneficiaries.

This draft regulation aims to amend Regulation (EC) No 332/2002 to change the funding method of the facility from the back-to-back funding method towards a diversified funding strategy, bringing it in line with the unified funding strategy of the Commission.

The diversified funding strategy offers several advantages over the financing method provided for in Regulation (EC) No 332/2002. In particular:

- it avoids the need for the Commission to contract borrowings on capital markets or with financial institutions in volatile or adverse conditions to fund programmes of financial assistance;

- it enables the Commission to consolidate the financial needs of multiple financial assistance programme, thereby simplifying management of funding operations, reducing costs, and avoiding the fragmentation of Union debt securities.