Page 11 - Position Paper

norms. After intensive consultations, a new regulation known as the
“Rule of Law Conditionality Regulation” was adopted in 2020. The
regulation authorizes the European Commission to suspend certain

financial instruments in response to a violation by any Member State of
the Rule of Law principle (https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv:OJ.LI.2020.433.01.0001.01.ENG&toc=OJ:L

:2020:433I:TOC).

Political Conditions for Macro-financial Assistance

The picture above offers a solid ground for arguing that the EU
equally prioritizes protection of the Rule of Law within the Union, as
well as abroad, including its neighborhood. It also takes decisions and

respective steps strictly in accordance with EU law and relevant
regulations and in response to breaches of EU founding principles.
The macro-financial assistance (MFA) which has been
mentioned in the beginning of this paper was designed in support of

budgetary challenges in EU partner countries. It aims at supporting EU
candidate and potential candidate (states with a formal EU membership
perspective), as well as ENP states, including Georgia, Ukraine and
Moldova.

MFA funds are paid to the central banks of beneficiary countries
and can be used, however, as the government sees fit, be it for reserves,
foreign exchange market intervention or as direct budget support.
MFA programmes are approved by the EU’s Ordinary Legislative

Procedure which means they must be proposed by the European
Commission and then approved by both the European Parliament and
the Council.

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