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EU approves €150 million disbursement in Macro-Financial Assistance to Tunisia

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The European Commission, on behalf of the EU, has approved today the disbursement of a €150 million loan to Tunisia.

This is the third and final disbursement under the second Macro-Financial Assistance (MFA) programme to Tunisia, and follows the completion of an important set of policy measures intended to support the country’s economic transition.

The disbursement of MFA funds is conditional on the implementation of specific policy measures agreed in a Memorandum of Understanding. The reforms undertaken as part of this MFA reflect the efforts made by Tunisian authorities to implement a set of far-reaching reforms designed to fight corruption, build a more equitable tax system, increase the quality of public administration, and improve the country’s social protection system. The programme has also supported reforms to enhance labour market policies and reduce unemployment, especially among the youth, as well as improve the business climate in Tunisia.

Following these reform efforts and the recent strong democratic support to continue the transition begun in 2011, Tunisia can count on the EU’s partnership to strengthen its economy and political governance, to improve Tunisians’ daily lives and ensure social protection for all. The EU will continue to support Tunisia in its efforts to address the remaining economic, financial and institutional reform challenges in support of growth and the socio-economic transition.

PierreMoscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “This disbursement underlines our sustained commitment to supporting Tunisia and its people. While the country has delivered on key policy commitments these past years, pursuing and deepening economic and structural reforms remains essential to building on Tunisia’s democratic and political achievements, and securing a more prosperous future. We thus stand ready to work closely with Tunisia to help deliver on the reforms necessary to secure investment, jobs and inclusive growth for the benefit of its people, notably its youth”.

The second MFA programme was proposed in 2015 to support Tunisia’s economic recovery. The disbursement of MFA funds is conditional on the implementation of specific policy measures agreed in the Memorandum of Understanding. The MFA programme was designed to assist Tunisia in covering its external financing needs while implementing a wide-ranging and ambitious structural reform agenda.

The European Parliament and the Council adopted the second MFA programme, worth €500 million, in July 2016. With today’s disbursement, the EU has now provided Tunisia with €800 million in MFA funds since 2015.

Background

MFA programmes are part of the EU’s wider engagement with neighbouring countries and are intended as an exceptional EU crisis response instrument. They are available to EU neighbouring countries experiencing severe balance-of-payments problems. This instrument includes the respect of human rights and effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, as pre-conditions.

MFA is also conditional on the existence of a non-precautionary credit arrangement with the IMF and a satisfactory track-record of implementing IMF programme reforms.
MFA funds are released in tranches strictly tied to the fulfilment of conditions aimed at strengthening macro-economic and financial stability. These conditions are listed in a Memorandum of Understanding signed between the EU and the beneficiary country.

Unlike other forms of financial aid to non-EU members, the Commission proposes MFA programmes before both the European Parliament and the Council approve them. The first MFA operation with Tunisia was concluded in July 2017 and provided €300 million in loans.

Following Tunisia’s request, the Commission proposed a second MFA programme worth up to €500 million in February 2016. The European Parliament and the Council adopted the Commission proposal in July 2016. The policy conditions agreed between the EU and Tunisia are laid down in the Memorandum of Understanding (MoU) and Loan Facility Agreement signed in Brussels on 27 April 2017

For the release of the third and final disbursement under the second MFA programme, the specific measures were designed to support fiscal consolidation and sustainable economic growth in the country. They included reforms better to protect depositors’ savings in Tunisian banks, increase transparency in public financial management, strengthen social safety nets to assist vulnerable Tunisians, facilitate bilateral exchanges through enhanced air connections with the EU, and improve the country’s business climate to help attract domestic and foreign investment.

EU-Tunisia relations

Since the beginning of the 2011 Revolution, Tunisia has been working towards a modern democracy based on freedoms, economic development, and social justice. The European Union has been Tunisia’s key partner in this process. Cooperation in a wide range of domains has been reinforced through the Privileged Partnership established in 2012.

The EU’s commitment to support Tunisia to help it achieve its ambitions was reiterated in the 2016 Joint Communication “Strengthening EU support for Tunisia” and through the launch, by High Representative/Vice President Mogherini and late President Caïd Essebsi, of the EU-Tunisia Youth Partnership which is high on the common bilateral agenda. The 15th meeting of the EU-Tunisia Association Council in May 2019 highlighted the importance of the bilateral relationship and EU support for inclusive and sustainable development in the country.

The EU remains committed to strengthening its privileged partnership with Tunisia. It has boosted its financial assistance for Tunisia in order to help it in consolidating its democratic transition and reviving its economy. The EU’s strategy of assistance to Tunisia makes use of a wide range of financial and technical assistance instruments, including budget support programmes under the European Neighbourhood Instrument (ENI), of which Tunisia is a major recipient among the Southern Neighbourhood countries (€300 million in grants per year since 2017), benefiting also from substantial loans from the European Investment Bank.

The EU’s relations with Tunisia go beyond financial assistance and development funding, into cooperation on a broad-range of policy areas and opportunities for EU-Tunisia cooperation, including under EU’s initiatives such as Creative Europe, Erasmus+ or Horizon2020.

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EU Politics

Coronavirus: EU Strategy for the development and availability of therapeutics

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The European Commission is today complementing the successful EU Vaccines Strategy with a strategy on COVID-19 therapeutics to support the development and availability of much-needed COVID-19 therapeutics, including for the treatment of ‘long COVID’. Today’s Strategy covers the full lifecycle of medicines: from research, development and manufacturing to procurement and deployment.

It is part of the strong European Health Union, in which all EU countries prepare and respond together to health crises and ensure the availability of affordable and innovative medical supplies – including the therapeutics needed to treat COVID-19.

The Strategy includes clear actions and targets, including authorising three new therapeutics to treat COVID-19 by October 2021 and possibly two more by end of the year. Concretely:

  • Research, development and innovation
    • Invest €90 million in population studies and clinical trials to establish links between risk factors and health outcomes to further inform public health policy and clinical management, including for long-COVID patients.
    • Set up a ‘therapeutics innovation booster’ by July 2021 to support the most promising therapeutics from preclinical research to market authorisation. It will build on current initiatives and investments in therapeutic development, working in a close cooperation with the European Health Emergency Preparedness and Response Authority (HERA) preparatory action on mapping therapeutics. It will therefore ensure the coordination of all research projects on COVID-19 therapeutics, stimulating innovation and boosting therapeutic development.
  • Access to and swift approval of clinical trials
    • Invest €5 million under the EU4Health programme to generate better, high-quality safety data in clinical trials, which will help produce robust results in a timely manner.
    • Provide EU countries with financial support of €2 million under the EU4Health 2021 work programme for expedited and coordinated assessments to facilitate approval of clinical trials.
    • Explore how to support developers of therapeutics to build capacity to produce high-grade material for clinical trials.
  • Scanning for candidate therapeutics
    • Invest €5 million to map therapeutics and diagnostics to analyse development phases, production capacities and supply chains, including possible bottlenecks.
    • Establish a broader portfolio of 10 potential COVID-19 therapeutics and identify five of the most promising ones by June 2021.
  • Supply chains and delivery of medicines
    • Fund a €40 million preparatory action to support flexible manufacturing and access for COVID-19 therapeutics under the EU Fab project, which in turn will become over time an important asset for the future the European Health Emergency Preparedness and Response Authority (HERA).
  • Regulatory flexibility
    • Authorise at least three new therapeutics by October and possibly two more by the end of the year and develop flexible regulatory approaches to speed up the assessment of promising and safe COVID-19 therapeutics.
    • Start seven rolling reviews of promising therapeutics by end-2021, subject to research and development outcomes.
  • Joint procurement and financing
    • Launch new contracts for the purchase of authorised therapeutics by the end of the year.
    • Secure faster access to medicines with shorter administrative deadlines.
  • International cooperation to make medicines available to all
    • Reinforce engagement for the therapeutics pillar of the Access to COVID-19 Tools Accelerator.
    • Boost ‘OPEN’ initiative for international collaboration.

Next Steps

The Commission will draw up a portfolio of 10 potential COVID-19 therapeutics and by June 2021, identify the five most promising ones. It will organise matchmaking events for industrial actors involved in therapeutics to ensure enough production capacity and swift manufacturing. New authorisations, rolling reviews and joint procurement contracts will be up and running before the end of the year.

The therapeutics innovation booster, matchmaking events and preparatory action to support flexible manufacturing and access for COVID-19 therapeutics under the EU Fab project, will feed into the HERA, for which a proposal is due later in the year. The pilot project on access to health data will feed into the European Health Data Space proposal expected later this year.

Members of the College said:

Vice-President for Promoting our European Way of Life, Margaritis Schinas, said: “The situation in many intensive care units across the continent remains critical. We need to focus both on vaccines and therapeutics, as two powerful and complementary ways to combat COVID-19. But currently we have only one authorised medicine to treat COVID-19. By acting on better availability of medicines today, we are making sure patients receive the treatments they need while also preparing our future biomedical preparedness. A coordinated strategy on quick access to therapeutics will boost our strategic autonomy and contribute to a strong Health Union.”

Commissioner for Health and Food Safety, Stella Kyriakides, said: “Vaccinations save lives, but they cannot yet eradicate COVID-19. We need a strong push on treatments to limit the need for hospitalisation, speed up recovery times, and reduce mortality. Patients in Europe and across the world should have access to world-class COVID-19 medicines. This is why we have set a very clear goal: by October, we will develop and authorise three new effective COVID-19 therapeutics that can have the potential to change the course of the disease. We will do so by investing in research and innovation, the identification of new promising medicines, ramping up production capacity and supporting equitable access. Our Therapeutics Strategy is a strong European Health Union in action.”

Commissioner for Innovation, Research, Culture, Education and Youth, Mariya Gabriel, said: “By increasing vaccine availability across Europe, more and more Europeans are now protected against COVID-19. In the meantime, the development of innovative medicines to treat coronavirus patients remains a priority when it comes to saving lives. Research and innovation is the first step to finding effective and safe therapeutics, which is why we are proposing to establish a new COVID-19 ‘therapeutics innovation booster’ and will invest € 90 million in population studies and clinical trials.

Background

The Strategy on COVID-19 therapeutics complements the EU strategy for COVID-19 vaccines from June 2020 and builds on ongoing work by the European Medicines Agency and the Commission to support research, development, manufacturing and deployment of therapeutics.

The Strategy forms part of a strong European Health Union, using a coordinated EU approach to better protect the health of our citizens, equip the EU and its Member States to better prevent and address future pandemics, and improve the resilience of Europe’s health systems.

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EU Politics

EU defence gets a boost as the European Defence Fund becomes a reality

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Commission welcomes the adoption of the European Defence Fund (EDF), following the European Parliament’s approval. The EDF, with a budget of €7.9 billion, is the Commission’s flagship instrument to support defence cooperation in Europe. EDF will co-finance collaborative research and capability development projects amplifying national investment. It will also foster an innovative and competitive defence industrial base. In doing so, it will enhance Union’s technological sovereignty and therefore its open strategic autonomy.

Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age, said: “This is an important step for a stronger Europe. The Fund will play a key role to enable SMEs to participate in defence supply chains and widen cross-border industrial cooperation. Providing opportunities to companies all sizes helps achieving more innovative solutions, to foster an open internal market. So besides a stronger defence cooperation it contributes to our competitiveness.”

Thierry Breton, Commissioner for Internal Market, said: “Today marks a historic day for Europe. The idea of working together for promoting our Defence Union and for the security of EU citizens is now a tangible reality.  In a global context where Europe needs to be stronger, more resilient and more autonomous in strategic areas, the European Defence Fund is a milestone and will significantly contribute to the security of EU citizens.”

A Fund to deepen EU defence industrial cooperation

Without substituting Member States’ efforts, the Fund will promote cooperation between companies of all sizes and research actors throughout the EU, in research and development of state-of-the-art and interoperable defence technology and equipment.

The Fund will support competitive and collaborative defence projects throughout the entire cycle of research and development, focusing on projects that have the potential to be game-changers for the armed forces of Member States. The Fund will foster innovation and incentivise the cross-border participation of SMEs. Projects will be defined based on defence capability priorities agreed by Member States within the framework of the Common Security and Defence Policy and particularly in the context of the Capability Development Plan. The projects will aim at contributing to the security and defence interests of the Union.

The EDF allows for the participation of European subsidiaries of third country companies and also for the cooperation with third country companies provided that their involvement  ensure the security and defence interests of the EU, and meet the rigorous security conditions as set in the EDF Regulation.

A strong budget for ambitious and inclusive defence programmes

2021 constitutes the first year of the rollout of the new EDF, which will be operational for the period 2021-2027, in alignment with the Multiannual Financial Framework.

It will be endowed with a budget of €7,953,000,000 in current prices. This financial envelope will be divided into two pillars: €2,651,000,000 will be allocated to funding collaborative defence research to address emerging and future security threats and €5,302,000,000 to co-finance collaborative capability development projects.

Up to 4%-8% of the Fund budget is devoted to development or research for disruptive technologies (i.e. technologies that have the potential to create game-changing innovations). This budget represents an unprecedented opportunity to contribute to the development of a competitive and innovative European defence industry.

Next Steps

The complete establishment of the Fund both legally and financially will now allow the Programme Committee (PC), chaired by the Commission and composed of Member States representatives, to discuss priorities and confront topics with the aim to open calls for proposals in summer 2021. The Commission will directly manage the programme. The European Defence Agency (EDA) is invited to participate as observer and the European External Action Service (EEAS) will assist in the Committee.

Background

The creation of a European Defence Fund was first announced in 2016. The Commission presented the first version of the European Defence Fund in June 2017, which has allowed defence cooperation at EU level to embark thanks to   two pilot projects, the Preparatory Action on Defence Research (PADR) for 2017-2019 and the European Defence Industrial Development Programme (EDIDP) for 2019-2020.

The Fund is part of the priorities of the von der Leyen Commission for a ‘Stronger Europe in the World’.

A political agreement between the Member States and the European Parliament was found in December 2020 and today’s decision gives legislative effect to the EDF that will operate for the next 7 years.

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EU Politics

Dual-use goods: what are they and why are new rules needed?

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The EU is working on new export rules for so-called dual-use goods to prevent them being misused in human rights violations.

What are dual-use goods?

Dual-use products are goods designed for civilian use that in the wrong hands could be used to supress human rights or launch terrorist attacks. They can be anything from drones to chemicals.

Although these goods can improve people’s lives, they can be misused. Authoritarian regimes might use them to keep the population under control, while terrorist groups could use them to stage attacks.

Why are new rules needed?

To prevent dual-use goods being repurposed in ways that violate human rights , the EU wants to make sure strict export rules prevent them being sold to people or organisations wanting to misuse them.

The EU is currently working on an update of the existing rules to take into account recent technological developments, including new cyber surveillance tools, and beef up protection of human rights.

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