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(Date Posted:15/04/2008 09:48:27)
Mauritius and the European Union (EU) signed yesterday a financing agreement under the 9th European Development amounting to nearly Rs 800 million. This money represents grant funding that Mauritius has received as compensation due to adverse fluctuations in its export earnings for 2006 and this is termed as FLEX in the EU terminology. These funds will be channeled as a general budget support for the implementation of the overall economic reform programme initiated by Government since 2006. The funds under the FLEX will be disbursed in two equal fixed tranches of 9.7 million Euros each, over the next two financial years provided that the reform programme is kept on track. Several conditions have also to be maintained under the FLEX funding. They are namely, the continued soundness of the macroeconomic framework, the quality of public management and satisfactory progress in the implementation of the overall economic reform programme. The total envelope for ACP countries for FLEX 2006 was 50 million Euros and Mauritius obtained almost 40% of this envelope as the country suffered a loss of 25% of its export earnings in the agricultural sector and an increase of the programmed budget deficit of 28%. The EU remains the major source of grant resources to Mauritius and in the cycle that covers the 10th EDF and the support under the Sugar Accompanying Measures, Mauritius expects to receive some 300 million Euro for the period 2008-2013, excluding any performance bonus the country might be eligible.
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