No L 174/36 Official Journal of the European Communities 3.7.91 COUNCIL DECISION of 24 June 1991 providing medium-term financial assistance for Bulgaria (91/311/EEC) THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Article 235 thereof, Having regard to the proposal from the Commission ('), submitted following consultation with the Monetary Committee, Having regard to the opinion of the European Par- liament (%), Whereas Bulgaria is undertaking fundamental political and economic reforms and has decided to adopt a market economy model ; Whereas the said reforms are already under implementa- tion and their financial support from the Community will strengthen mutual confidence and bring Bulgaria closer to the Community ; Whereas, following the changes in the international envi- ronment, the Bulgarian economy is in deep recession and facing external shocks which might sharply deteriorate its balance of payments and weaken its precarious reserve position; whereas a particularly heavy external debt burden makes the Bulgarian economy even more exposed to the said external shocks; Whereas the Bulgarian authorities have requested finan- cial assistance from the International Monetary Fund (IMF), the Group of 24 industrial countries and the Community ; whereas, over and above the estimated financing which could be provided by the IMF and the World Bank, a financial gap of some ECU 580 million remains to be covered in 1991, in order to prevent a further erosion of Bulgaria’s reserve position and avoid an additional degree of import compression, which could seriously jeopardize the achievement of the policy objec- tives underlying the Government’s reform effort; Whereas the success of the reform process in Bulgaria will depend crucially on the solution of the acute debt problem which faces the country; whereas the grant to Bulgaria of medium-term financial assistance should be conditional upon the adoption by the Paris Club of a rescheduling arrangement on Bulgaria’s official debt and the adoption by Bulgaria’s commercial bank creditors of a deferral arrangement on debt servicing payments ; Whereas the Commission, as coordinator of assistance from the Group of 24 industrial countries, has invited () OJ No C 96, 12. 4. 1991, p. 17. () OJ No C 158, 17. 6. 1991. them and other third countries to provide medium-term financial assistance to Bulgaria; Whereas the grant by the Community of a medium-term loan to Bulgaria is an appropriate measure to support that country’s balance of payments and strengthen its reserve position ; : Whereas the question of the risks associated with guaran- tees from the general budget of the European Communi- ties will be examined in the context of the renewal in 1992 of the Interinstitutional Agreement on budgetary discipline and improvement of the budgetary procedure ; Whereas the Community loan should be managed by the Commission ; Whereas the Treaty does not provide, for the adoption of this Decision, powers other than those of Article 235, HAS DECIDED AS FOLLOWS: Article 1 1. The Community shall grant to Bulgaria a medium- term loan facility of a maximum amount of ECU 290 million in principal, with a maximum duration of seven years, with a view to ensuring a sustainable balance-of- payments situation and strengthening the reserve posi- tion. 2. To this end, the Commission is empowered to borrow, on behalf of the Community, the necessary resources that will be placed at the disposal of Bulgaria in the form of a loan. 3. This loan will be managed by the Commission in full consultation with the Monetary Committee and in a manner consistent with any Agreement reached between the IMF and Bulgaria. Article 2 1. The Commission is empowered to negotiate with the Bulgarian authorities, after consultation with the Monetary Committee, the economic policy conditions attached to the loan. These conditions shall be consistent with any agreements as referred to in Article 1 (3) and with arrangements made by the Group of 24.