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1. The Commission, in accordance with the advisory procedure referred to in Article 7(2), shall agree with the Kyrgyz authorities on clearly defined economic policy and financial conditions, focusing on structural reforms and sound public finances, to which the Union’s macro-financial assistance is to be subject, to be laid down in a Memorandum of Understanding (‘the Memorandum of Understanding’) which shall include a timeframe for the fulfilment of those conditions. The economic policy and financial conditions set out in the Memorandum of Understanding shall be consistent with the agreements or understandings referred to in Article 1(3), including the macroeconomic adjustment and structural reform programmes implemented by the Kyrgyz Republic, with the support of the IMF.

2. Those conditions shall aim, in particular, to enhance the efficiency, transparency and accountability of the Union’s macro-financial assistance, including public finance management systems in the Kyrgyz Republic. Progress in mutual market opening, the development of rules-based and fair trade and other priorities in the context of the Union’s external policy shall also be duly taken into account when designing the policy measures. Progress in attaining those objectives shall be regularly monitored by the Commission.

3. The detailed financial terms of the Union’s macro-financial assistance shall be laid down in a Grant Agreement and a Loan Agreement to be agreed between the Commission and the Kyrgyz authorities.

4. During the implementation of the Union’s macro-financial assistance, the Commission shall monitor the soundness of the Kyrgyz Republic’s financial arrangements, the administrative procedures and the internal and external control mechanisms which are relevant to the assistance, as well as the Kyrgyz Republic’s adherence to the agreed timeframe.

5. The Commission shall verify at regular intervals that the conditions in Article 4(3) continue to be met, including that the economic policies of the Kyrgyz Republic are in accordance with the objectives of the Union’s macro-financial assistance. In so doing, the Commission shall coordinate closely with the IMF and the World Bank, and, where necessary, with the European Parliament and the Council.