OREANDA-NEWS. May 22, 2015. The European Commission, (EC) on behalf of the European Union (EU), and the International Monetary Fund (IMF) have signed a new Framework Administrative Agreement that allows the two organizations to continue their close and fruitful cooperation in capacity development. IMF Deputy Managing Director Carla Grasso and Neven Mimica, Commissioner for International Development and Cooperation, signed the agreement yesterday in New York City.

Ms. Grasso made the following statement:

“Since the signature of the 2009 Agreement, the EU has become a key strategic partner in IMF capacity development. Together our two organizations have responded to increasing demand in our partner and member countries for hands on technical assistance and training that help build institutions in support of strong macroeconomic policy-making and financial stability. This new Framework Administrative Agreement will further strengthen our collaboration through bilateral engagements, topical trust funds, and importantly, the network of regional technical assistance centers, which effectively leverage our institutions’ expertise and global presence.”

“The EU-IMF partnership, with its strategic dialogue on domestic resource mobilization, public financial management, debt sustainability, assessment of developing countries’ vulnerability to exogenous shocks, and complementarities between EU budget support and IMF country programs, is highly appreciated by our member countries and development partners. Similarly, our capacity development cooperation under the Agreement will continue to strengthen recipient countries’ abilities to design and implement sound macroeconomic policies geared toward achieving sustainable economic growth and development. I am therefore delighted to sign this Agreement in this “Year of Development” as we anticipate the Financing for Development Conference in Addis Ababa in July,” Mr. Mimica said.

Background Information

Supporting macroeconomic and public finance institutions and policies in developing countries has long been a common objective of the EU and IMF. The 2009 Framework Administrative Agreement, which had to be revised due to changes in the EU financial regulations in 2013, provided a legal framework for cooperation. Since then the partnership has intensified with the organizations supporting each other’s work, through regular consultations at staff and management level, the development of an EC exogenous shocks facility and complementarities of EU budget support and IMF lending programs, as well as through developing capacity building instruments such as the Tax Administration Diagnostic Assessment Tool. The EU is now the second largest contributor to IMF capacity development, with contributions of about US\\$150 million to date. Because of its significant global presence, the EU is also the largest contributor to the IMF’s network of nine regional technical assistance centers, particularly in Africa, while also contributing to almost all of the IMF’s topical and country trust funds, as well as to a range of bilateral projects, mostly in African, Caribbean, and Pacific countries, but also in EU member and enlargement countries.