European Union and Development Policy

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European UnionandDevelopment Policy

• Policies, organization and trends
• Tuukka Castrén, adviser, MFA, Finland
• March 27th, 2007

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• Some statistics

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Scale of EU (251) ODA

• 40 billion in 2005
• 0.35 ODA/GNI ratio EU average
• 55 of global ODA
• EC in own right is the 3rd largest donor after US
  and Japan
• Scaling-up, increase in EU aid 30 bill./year

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Scaling-up

• EU15 0.7 of GNI by 2015.
• EU10 to reach 0.33
• EU planned increase by 2010 around 30 billion
  per year
• Commission 2007-2013 3 billion in extra
  funding per year

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Regions
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How increase is focussed?

• 7.5 billion, up 20 from 2004
• Africa, Caribbean, Pacific 3 511 m 33
• Middle East/Mediterranean 1 075 m 7
• Asia 834 m 37
• Tacis 515 m 2
• Latin America 329 m 5
• South Africa 155 m 15
• Thematic Programmes others 1 090 m 5

Increase of commitments with 54 since
2001 Including 18m accounting correction
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How is EU aid used?

• Social sectors 44
• Infrastructure 12
• Debt forgiveness 17
• Emergency aid 8
• Administration 6
• Focus on poverty eradication MDGs

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Different channels
6.2 billion
52 increase since 2001 Budget payments for ACP
350 million
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European Development Fund - EDF

• Not part of the Community budget
• Based on Cotonou Agreement
• Applies to Sub-Saharan African, Caribbean and
  Pacific countries (ACP) only
• Implementation managed by the Commission
• 10th agreed in 2006 and administrative procedures
  not finalised
• Total value 23 bill. for 2008-2013
• Hungary contributed in the 10th EDF, not 9th -gt
  eligibility

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European Development Fund - EDF

• Operates separately from the EU budget
• Inter-governmental agreement, resources consist
  of direct contributions from the Member States
• currently 9th EDF is being implemented

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10th EDF financial allocations

• Financial protocol -gt Internal agreement -gt Final
  allocations
• Financial allocation 2 steps
• Initial amount
• Incitative tranche Programming dialogue
• Formal notification initial amount confirmed or
  increased
• Result-based approach
• Indicators
• Annual reviews (possibility of increase)
• Mid-term and end of term reviews
• Programming still on-going

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EU Budget - DCI

• Geographic programmes
• Privileged cooperation instrument
• Development priorities of partner country/region
• Asia,Latin America, South Africa
• Thematic Programmes
• Specific area of interest with global coverage
• Distinctive added value subsidiarity
• Geographic programme not best instrument to
  achieve policy objectives
• Multi-regional actions, pilot projects, difficult
  partnerships
• Also ACP

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EuropeAid speed
Average 3.3 implementation years EDF down to 4
years
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• Institutions and structures

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Institutions of the EU

• European Commission
• Council of the European Union
• European Council (NOT Council of Europe)
• Presidency of the European Union
• European Parliament

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Commission

• Politically independent institution the general
  interest of the European Union
• Appointed for five-year term by the Council and
  vote of appointment by the Parliament
• 25 Commissioners
• Directorates-General (DGx)

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Functions of the Commission

• Power of initiation of legislation
• Managing and implementing Community policies and
  programmes
• Executing the Community budget
• Ensuring that Community law is applied

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Workings of the Commission

• Directorate General (DG) for Development
• DG for External Relations (RELEX)
• DG EuropeAid
• DG Trade
• European Community Humanitarian Office (ECHO)
• DG Enlargement

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DG Development Louis Michel

• Initiates and formulates the EUs development
  co-operation policy for all developing countries
• In charge of thematic policies (human and social
  development gender)
• Coordinates the Communitys relations with
  African, Caribbean and Pacific countries (ACP)
• Responsible for administrating the European
  Development Fund

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DG RELEX Benita Ferrero-Waldner

• DG for External Relations and the European
  Neighborhood Policy
• Manages Community bilateral relations with all
  non-ACP countries
• Coordinates Commissions external relations
  activities (including CFSP)
• Coordinates Commissions neighborhood policy
• Responsible for administrating the appr. 120
  Commission delegations in third countries

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EuropeAid Benita Ferrero-Waldner

• Established in 2001
• Implements Community external assistance
  (Community funds and EDF)
• Responsible for all phases of the project cycle

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Others

• DG Trade Peter Mandelson
• European Community Humanitarian Office (ECHO)
  Louis Michel

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Council of the European Union

• Intergovernmental, ministerial level
• 27 Member States
• Organised in
• Configurations (GAERC)
• Presidency
• Coreper (Permanent Representatives Committee)
• Secretary General

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Functions of the Council of the European Union

• Main decision-making body
• Legislator (with the Parliament)
• Coordination of broad economic policies of Member
  States
• Defining and implementing Common Foreign and
  Security Policy
• Coordination of actions in police and judicial
  cooperation in criminal matters

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Workings of the Council

• Regular meetings of COREPER (of officials in
  charge of development who are based in Brussels)
• Regular meetings of GAERC
• Informal meeting of Development Ministers

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European Council

• Heads of States
• Meets a few time a year to take major political
  decisions

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Presidency of the European Union

• Rotating every six month
• Functions
• Organising and chairing meetings of the Council
  and its working groups
• Representing the Council
• Take forward outstanding negotiations from the
  previous Presidency

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The EC as a donor

• Potential value added of EC
• Political neutrality
• Scale global reach
• Framework for coordination
• Common mechanism
• Some challenges
• Lack of specialist expertise lack of staff
• Cumbersome procedures
• Poor image though has much improved
• Unfamiliar culture
• Difficulties to focus

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Conclusions

• EU joint action on DC
• Policy basis strengthening step by step
• Good debate on aid effectiveness
• Committed to increasing ODA
• First steps on joint programming
• But at same time
• Poor coordination complementarity
• EC share of EU ODA likely to go down
• EU still weak in international affairs
• Stronger agreement on common policy in other
  external action areas

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• The European Consensuson Development

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Background

• Joint Council-Commission Statement
  (November 2000)Why revise it?
• The world has changed (security,migration, social
  dimension of globalisation, ..)
• Europe has been enlarged
• The global development agenda has been
  strengthened (MDGs, Monterrey, etc.)

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Key ideas of revision

• Maintain the philosophy of the 2000 Statement
• Better articulate development policy with other
  elements of the EU external action
• Ensure its application to all developing
  countries
• Better associate Member States to the elaboration
  of a common vision of development
• Fully associate the European Parliament
  Tripartite Statement

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The European Consensus on Development

• Common vision of development for Commission and
  member States
• First time in 50 years
• Legitimating the EU role in the world

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The European Consensus on Development

• Joint Declaration by Council, Commission,
  Parliament
• Two parts
• Part I The EU Vision of Development (Commission
  and Member States)
• Part II The EC Development policy (Commission)

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• Part I
• The EU Vision of Development

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Objectives

• Primary objective
• Poverty reduction and, eventually, poverty
  eradication in the context of sustainable
  development
• Millennium Development Goals
• Complementary objectives
• good governance, human rights

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Approach to poverty reduction

• Poverty has many dimesions
• economic, human, political, socio-cultural
  capabilities
• Balanced approach
• human development
• protection of natural resources
• investments in pro-poor wealth creation

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Common values

• Respect for human rights
• Fundamental freedoms
• Peace
• Democracy
• Good governance
• Gender equality
• The rule of law
• Solidarity
• Justice
• Commitment to multilateralism

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Key principles

• Ownership, Partnership
• Political dialogue
• Participation of civil society
• Gender equality
• Commitment to fragile states

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Means and modalities

• Aid effectiveness and predictability
• harmonisation and alignment (Paris Declaration
  additional EU commitments)
• general and sector budget support
• new mechanisms (more predictable, less volatile)

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• Part II
• The European Community Development Policy

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Commissions comparative advantages

• The particular role of the Commission
• global presence and expertise as a delivery agent
• promotion of policy coherence
• promoting best practices and stimulating the
  debate on development
• facilitation of coordination and harmonisation
• support to democracy, human rights, good
  governance and respect for international law
• promotion of participation of civil society and
  North-South solidarity

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Guiding principles

• Differentiated approach
• mix of objectives and modalities depending on
  contexts and needs (LDCs, LICs, MICs, fragile
  states)
• Concentration at country/ regional level

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Areas for Community action

• Trade and regional integration
• Environment and sustainable management of natural
  resources
• Infrastructure, communications and transport
• Water and energy
• Rural development, territorial planning,
  agriculture and food security
• Governance, democracy, human rights, and support
  for economic and institutional reforms
• Conflict prevention and fragile states
• Human development
• Social cohesion and employment

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Mainstreaming

• Democracy, good governance, human rights, the
  rights of children and indigenous peoples
• Gender equality
• Environmental sustainability
• HIV/ AIDS

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Other actions

• Support to global funds and initiatives
• linked to MDGs and Global Public Goods
• Policy coherence for development
• rolling work programme to be agreed between
  Commission and Member States

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Aid modalities

• A wide range of modalities based on needs and
  performance
• budget Support
• micro-finance approach
• project aid
• EIB investments

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• External cooperation instruments

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The new instruments

• Pre-accession (IPA)
• Neighbourhood (ENPI)
• European Development Fund
• Development (DCI)
• Human rights (EIDHR)
• Stability (IfS)
• Nuclear Safety (NSI)
• Industrialised countries (ICI)

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Pre-accession instrument (IPA)

• Scope Transition assistance
• Institution building
• Cross-border cooperation
• Regional, rural human resources
• development
• Region 6 Western Balkans countries and
• Turkey
• Funding Average 1.6 billion per year
• Start January 2007
• Replaces Phare, Ispa, Sapard, Cards and
• Turkey pre-accession Regulations

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Neighbourhood instrument (ENPI)

• Scope Country specific programmes
• Cross border cooperation with EU Member
  States
• Region 17 countries Mediterranean, Eastern
  Europe, Russia, Caucasus, Middle East
• Funding Average 1.6 billion per year
• Start Expected January 2007
• Replaces Mainly Tacis and Meda Regulations

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10th European Development Fund (EDF)

• Scope Based on Cotonou agreement
• Country specific programmes
• Horizontal programmes
• Region 78 African, Caribbean, Pacific countries
  and OCTs
• Funding Average 3.7 billion per year
• Start Expected January 2008
• Replaces 9th EDF

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Development instrument (DCI)

• Scope I Country specific programmes
• Region Latin America, (Central) Asia, East of
  Jordan, South Africa
• Funding Average 1.4 billion per year
• Start Expected January 2007
• Replaces Mainly ALA, Tacis and South Africa
  Regulations

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Development instrument (DCI)

• Scope II Support to sugar production
  restructuring
• Region African, Caribbean, Pacific countries
• Funding Average 180 million per year
• Start Expected January 2007
• Replaces Sugar Regulation

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Development instrument (DCI)

• Scope III Thematic programmes
• Human social development
• environment, non-state actors
• food security
• migration and asylum
• Region All third countries
• except industrialised / preaccession
• Funding Average 800 million per year
• Start Expected January 2007
• Replaces More than 10 thematic Regulations

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Democracy and human rights (EIDHR)

• Scope Democracy (election observations)
• Rule of law
• Human rights
• Fundamental freedoms
• Region All third countries
• except industrialised countries
• Funding Average 160 million per year
• Start Expected March 2007
• Replaces Previous EIDHR Regulation

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Stability instrument (IfS)

• Scope I Crisis response and preparedness
• II Global and trans-regional border
• challenges
• Region All third countries
• except industrialised countries
• Funding Average 290 million per year
• Start Expected January 2007
• Replaces Mainly Rapid Reaction Mechanism

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Nuclear safety instrument (NSI)

• Scope Nuclear safety
• Radiation protection
• Nuclear material safeguards
• Region All third countries
• except industrialised countries
• Funding Average 75 million per year
• Start Expected March 2007
• Replaces Part of Tacis Regulation

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Industrialised countries (ICI)

• Scope Cooperation programmes
• Exchange programmes
• Region Industrialised countries (North
  America, Australia, New Zealand)
• Funding Average 25 million per year
• Start Expected January 2007
• Replaces Previous ICI Regulation

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All instruments

• Simplification From 35 instruments to 10
• New for all partner countries
• Coverage One main instrument/country Several
  specific instruments
• Example Egypt
• Main instrument ENPI
• Others DCI / EIDHR / NSI / IfS

8 new instruments and humanitarian and
macro-financial assistance
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Instruments managed by AIDCO

• Strategies (CSP/IP) DGs RELEX and DEV
• Democratic Informal dialogue on CSP/IP
• Scrutiny with EP (except EDF)
• New for all instruments
• Annual (AAP) AIDCO
• programmes All countries
• New for ALA/EDF/SA countries

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Instruments managed by AIDCO

• Comitology (CSP / IP / AAP) Member states
  committees
• New to be set up (except EDF)
• EP droit de (CSP / IP / AAP) formal check
• regard Not for NSI / EDF
• New for all other instruments
• Rules Financial Regulation /
• Practical Guide
• New adaptation from 01.01.07

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Instrument specific

• ENPI New CBC in the EU
• EDF / DCI New annual programmes
• DCI Financing types projects / budget
  support / SWAPs / etc
• New twinning / co-financing /
• debt relief / operating costs
• NSI New coverage all third countries
• (except ICI countries)
• IfS New approach drugs / energy
• / trafficking / etc

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• Changes and challenges

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Aid Effectiveness
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Aid Effectiveness

• EU committed to Paris Declaration on Aid
  Effectiveness
• Forefront in implementation
• EU encourages
• using budget support and sector programmes
  instead of small projects
• capacity building through coordinated programmes

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Aid Effectiveness

• Untying of aid
• New aid instruments
• New financing modalities

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Some challenges

• All partners need to commit
• Knowledge on the PRSP
• Roles of governments, parliaments, civil society
• Difficult partnerships, conflict prevention and
  governance
• Alignment means more budget support
• Are we ready
• How to ensure linkages
• PRSPs going beyond health and education
• Infrastructure for trade and growth
• Market access not everything
• Using trade regimes means rightdomestic
  conditions
• Domestic reform and strengthen supply-side

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Conclusion

• EU has chosen to be in the forefront
• The EU is mobilising more and better aid
• The EU as the most open market in the world The
  EU is working on greater policy coherence
• The EU is focusing on Africa
• Challenges ahead
• Maintaining the commitment of EU member states
• Demonstrating the commitment of partner countries
• ensuring mutual accountability for development
  results

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http//ec.europa.eu/europeaid/frontoffice

• Info Point
• External Cooperation
• Rue de la Loi 41
• 02 299 98 14
• Mo-Fri 10.00-16.00

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Questions and answers

• discussion