No L 66/22 Official Journal of the European Communities 13. 3. 91 COUNCIL DECISION of 4 March 1991 concerning a Community loan in favour of the Hellenic Republic (91/136/EEC) THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 1969/88 of 24 June 1988 establishing a single facility providing medium-term financial assistance for Member States’ balances of payments ('), and in particular Article 1 thereof, Having regard to the proposal from the Commission, submitted after consultation of the Monetary Committee, Whereas the Greek Government has applied for me- dium-term financial assistance to support its balance of payments and economic programme of adjustment and reform ; Whereas the amounts outstanding under previous loans granted to the Member States are within the ceiling speci- fied in Regulation (EEC) No 1969/88 ; Whereas in addition to the immediate problems in the balance of payments arising from the deterioration in the current account and the need to make substantial repay- ments of external debt, the Greek economy suffers from serious structural deficiencies affecting its external per- formance and prospects ; whereas a balance of payments loan disbursed in tranches is justified ‘whilé measures of rectification and adjustment are undertaken ; Whereas the improvement in the performance of the Greek economy which will enable the Hellenic Republic to participate more fully in Community integration and in particular to join the exchange rate mechanism (ERM) of the European Monetary System before the agreed starting date for the second stage of Economic and Mone- tary Union will require a significant reduction in inflation and an improvement in the structure of the economy; whereas such objectives will only be met by a substantial reduction in public sector deficits, by a tight monetary policy and a firm exchange rate policy and by reform and liberalization of product, labour and financial markets ; Whereas the Community -is already offering support to the Greek economy through its funding of Community programmes in favour of the Hellenic Republic and in particular the Community support framework for struc- () OJ No L 178, 8. 7. 1988, p. 1. tural assistance ; whereas the benefits from Community support would be enhanced by the achievement of finan- cial stability and in particular a reduction in inflation to low levels; Whereas the repayments due on the loan granted to the Hellenic Republic in 1985 by Council Decision 85/543/EEC of 9 December 1985 concerning a Commu- nity loan in favour of the Hellenic Republic () will be made as scheduled ; Whereas the Greek authorities have adopted a three-year programme of adjustment and reform and following consultation with the Commission have presented this programme at the same time as their application for a loan ; whereas the Greek Government will implement fully its programme of adjustment and reform over a three-year period from 1991 to 1993 so as to achieve the objectives described in that programme, including the restordtion of the external accounts to a sustainable posi- tion and the achievement of a low rate of inflation; whereas an external current account deficit of 3 % of the Gross Domestic Product (GDP) and an inflation rate of 7 % or less by the end of 1993 would be consistent with these objectives ; Whereas the Greek Government will take the necessary steps to achieve the targets and introduce the specific measures indicated in their programme over the three - year period from 1991 to 1993 agreed as follows : 1. The central government net borrowing requirement expressed as a percentage of GDP will not exceed 10,4 % in 1991 and 5§ % and 1,5% in 1992 and 1993 respectively. In 1991, in addition to the measures already proposed by the Greek authorities, the target will be achieved by freezing 150 000 million Drachmas of reserves included in the 1991 budget until the end of September 1991 when a review will take place with the Commission of central government revenue and expenditure trends. If it is agreed on the basis of the trends that the net bor- rowing requirement will be less than the target set out above (i.e. excluding 150 000 million Drachmas of reserves) then the reserves will be released on a pro rata basis but to an amount no greater than 150 000 million Drachmas. If it is foreseen that the net bor- rowing requirement will exceed the above target the Greek Government will take measures to ensure that the target is met. () OJ No L 341, 19. 12. 1985, p. 17.