From a financial discipline point of view, the EU prefers to provide assistance in the form of loans rather than grants. The EU is a high-rating borrower on the international markets and all the main credit-rating agencies consider it to have a very low default risk (see Table 1). Therefore, it can borrow at a very favourable rate and lend to the assisted countries on the same terms. Grants, meanwhile, come from the EU budget and have to respect the limits set by the budget appropriations of the multi-annual financial framework. Nevertheless, in the last two multi-annual financial frameworks (i.e. since 2007), the resources allocated for grant payments have almost never been exhausted and have stayed well below the ceilings, while grants have represented only around 10 % of total macro-financial assistance
Table 1 – The EU’s rating as a debtor (2016)
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