9 Instruments for External Assistance
| (26041)
13686/04
COM(04) 626
| Commission Communication on the Instruments for External Assistance under the Future Financial Perspective 2007-2013
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| Legal base | — |
| Document originated | 29 September 2004
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| Deposited in Parliament | 21 October 2004
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| Department | International Development
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| Basis of consideration | EM of 7 November 2004
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| Previous Committee Report | None
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| To be discussed in Council | To be determined
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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Background
9.1 The Commission's Communications of February and July concerning
a new Financial Perspective for the EU for 2007 to 2013 included
a simplified political and administrative structure for the delivery
of the Community's external assistance programmes. In the first
of these Communications,[19]
the Commission envisaged funding to promote:
- a policy for the EU's near neighbourhood (countries immediately
bordering the Union): "stabilising" the near neighbourhood
and supporting its development through cooperation and integration
in trade, regulatory matters, transport, energy, education, training,
and immigration; tackling environmental and nuclear safety, energy
security, illegal immigration, organised crime, trafficking, terrorism
and communicable diseases; moves to consolidate democracy and
the rule of law and to encourage economic reforms and integration;
and measures, including "as a last resort by using force
under a UN mandate", aimed at guaranteeing stability, preventing
conflicts and managing crises;
- the EU as a sustainable development partner through
work aimed at eradicating global poverty, including the Union's
contribution towards the Millennium Development Goals;[20]
- "the EU as a global player", supporting
effective multilateralism and contributing to strategic and civil
security both within and beyond its borders; and
- improved coherence in bilateral relations and
international institutions and effective complementary actions
between the Union and Member States.
The Commission Communication
9.2 The present Communication proposes the replacement
of the existing range of geographical and thematic instruments
"that has grown up in an ad-hoc manner over time" by
six, all-encompassing instruments. Two already exist. The four
new ones are:
"1) An instrument for Pre-Accession Assistance
2) A European Neighbourhood and Partnership instrument
3) A Development Cooperation and Economic Cooperation
instrument
4) An instrument for stability." [21]
9.3 According to the Communication:
"Enlargement has entrusted the EU with even
greater responsibilities in the field of external actions, responsibilities
channelled towards three main objectives: providing stability,
security and prosperity in its Neighbourhood ('The EU and its
neighbourhood policy'); working actively to support sustainable
development at international level ('The EU as a sustainable development
partner'); promoting global political governance and ensuring
strategic and civilian security ('The EU as a global player')."[22]
9.4 The rationale for and "value added"
of EU intervention are addressed at length. The Commission argues
that with more than 450 million inhabitants and a quarter of
world output, and as the biggest aid donor and the first trading
partner of 100 countries, the Union "could wield considerable
influence over the political and economic choices determining
prosperity and stability in Europe and the wider world, which
in their turn influence the wellbeing and security of Europeans.
This potential is, however, partly unrealised. There is a gap
between the EU's economic weight and its political clout. The
cost of a reduced Europe in the field of external relations, whether
political or financial, is real ... day-to-day examples of this
cost are numerous" (though no examples are provided). It
continues:
"the EU must therefore take a long view and
set a course rather than reacting to events. If it wants to have
a greater say on the international scene, it needs to speak with
one voice and promote a real common strategy. It should strengthen
its capacity to make global governance more effective, to promote
sustainable development and political stability through its multilateral
and bilateral policies. The EU must improve its capacity to draft
substantial external policies by overcoming the division into
pillars that undermines the coherence of its action; it also has
to make sure that, once adopted, these policies are backed up
by all the resources of Community and national instruments, subject
to their respective decision-making procedures."[23]
9.5 The Commission also argues that "there is
a strong demand from Citizens for more Europe on the international
scene even where the Community's policies are not currently in
the lead". According to opinion polls (unspecified as to
when taken or as to their nature):
"the European level is considered the most appropriate
by a large majority of people when it comes to external action,
far ahead of the national level. Two thirds of European citizens
support a Common Foreign Policy and three quarters a Common Defence
Policy. They expect the EU to promote their common interests and
values more often on the international stage and in doing so,
to secure a sense of direction in multilateral negotiations and
a sense of influence in the development of globalisation."[24]
9.6 Moreover, says the Commission, an EU "increasingly
exposed to risks such as conflicts, natural disasters, and pandemics
[and] without internal frontiers, is vulnerable to the consequences
of such risks and threats, and must take appropriate external
action, and effectively support international efforts, which affect
not only the physical security of civilian populations and their
potential for development, but also overall security and stability".
All in all, "a coherent EU approach in the external relations
field will increase the EU's influence far beyond what Member
States could achieve separately or even working in parallel".
9.7 The Commission's views on "value added"
are in much the same vein, i.e. taken as read rather than convincingly
exemplified:
"The clear added value which the EU enjoys is
fundamental to the attainment of the strategic goals presented
above. This added value can still be further enhanced...For reasons
detailed below, each EURO spent at EU level has greater leverage
and consequently more impact than the equivalent spending at national
level…EU intervention can firstly be justified simply because
it is the most or even the only effective way to properly address
our objective. The value added comes from the fact that the Community
simply represents the right level for action. The very fact of
European integration means that the advantages accruing to one
Member State from its external operations also benefit the others.
However, it is difficult to incorporate these "European"
factors in decisions taken nationally, which as a result may ultimately
fail to live up to expectations. This clearly justifies intervention
at the Community level. The value added of Community spending
also comes from the fact that the Community alone has its hands
on all operational levers at once in dealing with third countries.
The Community can therefore ensure consistency and synergy between
main external relations instruments: political dialogue, trade,
aid, economic cooperation, external projection of internal policies.
Member States bilateral relations (in the political field for
example) with a particular third country or even region may well
be older and closer. However, the full panoply of instruments
lies at EU level only. As a result, Community expenditure, used
in combination with other available instruments has greater leverage
than national or even multilateral expenditure which is limited
by the impossibility of fully exploiting complementarities between
that expenditure and other policies."[25]
9.8 The Commission explains that Community assistance
and cooperation
"is delivered through a range of regional instruments,
for example CARDS, TACIS, MEDA[26]
etc. and through the arrangements set out for the European Development
Fund (EDF) in the Cotonou agreement, to which must be added a
substantial number of thematic instruments (for example the European
Initiative for Democracy and Human Rights). As an example of
the complexities involved, cooperation and assistance with the
Southern Mediterranean, Near East and Middle East region must
at present be managed through eleven different Regulations. A
similar situation applies for the TACIS region, and for the Asia/Latin
America regions. Pre-Accession assistance has been delivered through
three discrete instruments governed by separate Council Regulations
and a Co-ordination Regulation. All of these Regulations exhibit
significant differences of comitology and programming. Managing
the Community's programmes on the basis of such a mixed and complex
set of instruments, in an efficient and coordinated way, has become
an increasingly difficult task".
9.9 The Commission therefore proposes "a drastic
simplification of instruments", addressing the following
principles:
"— Ensuring overall policy coherence:
The appropriate policy mix and balance between the needs for short-term
response and long term strategies will be ensured through Country
Strategy Papers (CSPs) and Regional Strategy Papers (RSPs), as
well as accession and thematic strategies. Subject to regular
reviews, and calling upon the appropriate mix of the new instruments
proposed, this will ensure the necessary coherence in approach.
"— Simplifying structure and procedures:
Budget lines and procedures (financing instruments and their legal
bases) will be streamlined to make them more effective and more
efficient, in particular with regard to emergencies and crises,
and more responsive to new initiatives such as the Global Fund
to fight HIV/AIDS, Tuberculosis and Malaria or the Heavily Indebted
Poor Countries initiative.
"— Output-oriented resources allocation:
There is a broad consensus on the necessity of allocating resources
according to expected and measured performances. The CSPs—RSPs
process, backed up by stronger analytical capabilities, should
confront initial goals and real achievements.
"— Better dialogue and coordination with
other donors and institutions: First, with the other EU Institutions,
but also with Members States and Bretton Woods institutions.
"— Better dialogue with third countries:
All countries will be covered by the new and simplified set of
targeted instruments, bringing better understanding and readability."
9.10 The Commission "proposes three new main
instruments for the three overarching external relations policies,
namely pre-accession policy, Union policy towards the neighbourhood
countries, and Union policy to support economic cooperation and
development with other countries. These three main instruments
are then complemented by three specific instruments, of which
one is new, to address specific needs and in particular provide
a response to crisis situations". It outlines them in turn:
Pre-Accession policy
"This policy covers the candidate countries
(Turkey and Croatia) and the potential candidate countries (the
Western Balkans) and is driven by the accession and pre-accession
framework, namely the Strategy Papers, Regular Reports, the European
and Accession Partnerships and the negotiations.
"The instrument for Pre-Accession will replace
a range of existing instruments (PHARE, ISPA, SAPARD, CARDS etc.)
and will cover Institution Building, Regional and Cross-border
cooperation, Regional Development, Rural Development and Human
Resources Development and will address the need for a flexible
approach in order to accommodate new priorities quickly."
There is an increased emphasis on stabilisation,
regional co-operation, confidence-building measures and economic
development. Beneficiary countries are divided into two categories:
Potential Candidate Countries, which will continue to receive
assistance along current lines — Institution Building and
Democratisation, Economic and Social Development, Regional and
Cross-Border Co-operation and some alignment with the acquis communautaire;
and Candidate Countries, which will additionally receive assistance
aimed at fulfilling the Accession Criteria, building up administrative
and judicial capacity and preparing them for the use of EU Structural,
Cohesion and Rural Development Funds after accession. There are
procedures for moving from one of these categories to the other,
with Council agreement.
The European Neighbourhood and Partnership instrument
"This instrument covers countries targeted by
the European Neighbourhood Policy i.e. the countries of the south
and eastern Mediterranean (the MEDA countries), the Western NIS
[Newly Independent States] and the countries of the southern Caucasus.
This instrument will also support our strategic partnership with
Russia."
"The European Neighbourhood and Partnership
instrument (ENPI) has two main objectives namely to:
- promote progressive economic integration and
deeper political cooperation between the EU and partner countries;
and
- address the specific opportunities and challenges
related to the geographical proximity common to the EU and its
neighbours."
The ENPI will replace TACIS and MEDA and other existing
instruments such as the European Initiative for Democracy and
Human Rights (EIDHR). It will operate under the existing bilateral
agreements between the Community and neighbouring countries. Its
scope will go beyond promoting objectives such as sustainable
development or fighting poverty to encompass measures leading
towards participation in the EU's internal market. Legislative
approximation, regulatory convergence and institution building
will be supported through mechanisms such as the exchange of experience,
long-term twinning arrangements with Member States or participation
in Community programmes and agencies. An innovative feature is
the cross-border co-operation component, bringing together regions
of Members States and partner countries sharing a common border.
It will use a Structural Funds approach, based on multi-annual
programming, partnership and co-financing.
Development Cooperation and Economic Cooperation
policy with other countries
"This policy covers, in particular, all countries,
territories and regions that are not eligible for assistance under
either the Pre-Accession instrument or the European Neighbourhood
and Partnership instrument. The purpose of the Community's Development
Cooperation and Economic Cooperation policy is to support development
cooperation, economic cooperation, financial cooperation, scientific
and technical cooperation and any other form of cooperation with
the partner countries and regions, thereby helping developing
countries achieve the Millennium Development Goals, and so reduce
poverty. This cooperation is implemented in the framework of the
principles and objectives of the EU's external action and in accordance
with Articles 179 and 181 a of the European Community Treaty.
"The Development Cooperation and Economic Cooperation
instrument (DCECI) will be the main vehicle for supporting developing
countries in their efforts to achieve these objectives. The Development
Cooperation and Economic Cooperation instrument is comprehensive
and covers cooperation with both partner countries and partner
regions, as well as all the horizontal or thematic initiatives
for the benefit of the partner countries, and that are appropriate
for the achievement of the objectives set out in articles 177
to 181a of the European Community Treaty and for meeting the Community'
s international commitments. It will include the successor to
the ninth EDF. This incorporation into the budget will facilitate
cross-fertilisation and so moves up to the best practice levels
of the two systems.
"These three main instruments are policy driven
and have, as a consequence, particular geographical implications
and coverage. They are complemented by three instruments/programmes
that are designed to respond to particular crises. These are:
The Instrument for Stability
"This is a new instrument designed to provide
an adequate response to instability and crises and to longer term
challenges with a stability or security aspect: It will provide
assistance designed to establish the necessary conditions for
the implementation of the policies supported by the IPA, ENPI
and the DCECI.
"In particular, the Stability instrument will
allow the Community to:
- deliver an effective, immediate and integrated
response to situations of crisis and instability in third countries,
within a single legal instrument, until normal cooperation under
one of the general instruments for cooperation and assistance
can resume. This will build on the added-value already demonstrated
by the Rapid Reaction Mechanism and on the emergency provisions
already provided for in a number of existing external relations
financial instruments;
- address global and regional trans-border challenges
with a security or stability dimension arising in third countries,
including issues such as nuclear safety and non-proliferation,
as well as the fight against trafficking, organised crime and
terrorism and unforeseen major threats to public health; and
- enable the Community to deliver a timely response
to future urgent policy challenges faced by the Union, by piloting
measures unforeseen under the three policy-driven instruments,
until such time as they can adequately be integrated within the
policy framework of those instruments.
"The Stability instrument operates purely under
the first pillar.[27]
However its design takes into account the need for effective operational
coordination between Community actions and measures adopted under
the Common Foreign and Security Policy."
The Humanitarian Aid instrument and Macro Financial
Assistance
"These two instruments will remain unchanged
except that all Food Aid of a humanitarian nature will be included
under Humanitarian Aid instead of being dealt with under a separate
Regulation. As regards Humanitarian Aid this is regarded as already
sufficiently well defined in terms of scope and objectives and
is performing well in terms of delivery and efficiency. In addition,
since its inception in 1990, Macro Financial Assistance has proved
to be an efficient instrument for economic stabilisation and a
driver for structural reforms in the beneficiary countries, and
so no change is needed."
9.11 Finally, the Communication looks at "The
external aspects of internal policies". It states that
the three general instruments will cover all policy areas, either
thematically, or through Country/Regional Strategy Papers and
Programmes and European and Accession Partnerships, so there will
be no systematic need for separate legal instruments or Regulations
to deal with external aspects of internal policies. Within the
four draft Regulations, "appropriate and complete provision
has been made to ensure that the external aspects of internal
policies are properly covered", so as to allow measures in
support of policy areas such as the environment, education, transport
and customs and taxation. The Commission will discuss with the
Council and Parliament how it will ensure that the objectives
of these policies and instruments are consistent with the overall
direction of Union policy, and that overlaps and gaps between
thematic and geographical instruments are minimised.
The Government's view
9.12 In his Explanatory Memorandum of the 7 November,
the Secretary of State for International Development (Mr Hilary
Benn) says:
"The Government wants an external actions budget
which enables EC spending to assist a more coherent, pro-active
and capable EU external policy response, including a significant
contribution to the Millennium Development Goals (MDGs). This
means: refocusing grant resources on low-income countries while
retaining enhanced flexibility to respond to international events;
supporting crisis prevention and resolution; and continuing to
support external priorities including enlargement and the European
Neighbourhood policy.
"We welcomed the Commission's February Communication
on the future financing of external actions, which proposed a
simplified budget with instruments based firmly on policy objectives.
This included a single development instrument for all developing
countries, focused on achieving the Millennium Development Goals
(MDGs). These sound principles have been compromised in the July
and September Communications…Although they maintain the proposal
to simplify the budget, they substitute a policy-based approach
with [sic] a geographical one. By wrapping development
resources for countries in Eastern Europe and the Mediterranean
region within a wider Neighbourhood Instrument, the scope of the
Development Instrument to refocus resources on the MDGs is diminished.
"The Government is also concerned that the latest
proposals do not offer sufficient flexibility to improve our crisis
response, without jeopardising our long term policy objectives.
The global instruments should include reserves to provide the
necessary flexibility. In addition the external heading should
contain a significant margin. Nor has the Commission provided
the rigorous analysis or evidence to justify an overall increase
in budget volumes.
"The Government does not believe that integration
of the EDF into the EU budget is appropriate at this time."
9.13 On the financial implications, the Secretary
of State says:
"The proposed financial framework for the EU
as a global partner heading for 2007-2013 is €95.590
billion/£64.6 billion in 2004 prices...The funding available
will depend on the outcome of the overarching negotiations on
the finances of the EU from 2007-2013.
"The UK, along with five other Member States
(Germany, France, the Netherlands, Austria and Sweden) believes
that the Union's priorities can be funded by a budget stabilised
at 1% of EU Gross National Income. The level of funding available
for the instruments for external assistance would, therefore,
need to be consistent with this."
9.14 The Secretary of State says that working groups
in Brussels are currently in the early stages of discussion of
the Regulations for the External Actions instruments (the drafts
of which we examine elsewhere in this Report).[28]
Conclusion
9.15 At around 9% of the total EU Budget, the
external actions component is a distant third behind the agricultural
and structural and cohesion elements. But the sums involved are
nonetheless significant. And so are the policy implications.
The Community's interest in development cooperation dates from
its inception. But what is notable in the Communication is the
shift in emphasis, from a Community policy which, according to
the Treaty, "shall be complementary to the policies pursued
by Member States"[29]
to the opposite principle set out in this Communication —
that the Community leads the way, with Member States' programmes
being complementary and inherently less effective. Much of the
Commission's case is that the justification for and the value-added
of Community expenditure is self-evident. Not only is there
no sustained analysis or evidence to justify an increase in the
overall budget; there is none to justify current expenditure beyond
a proposal for a better management system. Particularly deplorable
is the weight placed on vague references to unspecified opinion
poll findings.
9.16 The Commission's view of the implementation
of the Constitutional Treaty as a pre-requisite — "overcoming
the division into pillars that undermines the coherence of its
action" — appears equally unsubstantiated.
9.17 It is likely that, in the future, we will
recommend the Communication for debate. In the meantime:
- We ask the Secretary of
State if he shares the Commission's assessment of its own importance
in the development process relative to the Member States; and
if so why. Does he agree with the Commission that "each
euro spent at EU level has greater leverage and consequently more
impact than the equivalent spending at national level"?
- We ask him to expand on the adverse effects
of what he refers to as "wrapping development resources for
countries in Eastern Europe and the Mediterranean region within
a wider Neighbourhood Instrument", and on how and to what
extent "the scope of the Development Instrument to refocus
resources on the MDGs is diminished". How has this change
of approach come about since February?
- We also note the Secretary of State's continued
opposition to the incorporation of the EDF funds into the main
EC Budget ("Budgetisation"). He argued, in November
2003, that the two main concerns were cost and the risk to poverty
focus and effectiveness, and that the efficiency of EDF expenditure
had been "historically poor". He said that "both
poverty focus and good practice would be at risk once brought
into the Budget". Since he was so critical of the external
actions component of the EC Budget a year ago, we ask him to what
extent, if at all, he believes the Commission's proposals would
improve matters.
- We ask the Secretary of State when he next
expects to be able to bring us up-to-date on the outcome of the
continuing discussions in the working groups on the Regulations
for the External Actions instruments, since that is likely to
determine when we recommend this matter for debate.
In the meantime we shall continue to keep the
document under scrutiny.
19 (25367) 6232/04; see HC 42-xv (2003-04), paras 5-37
(24 March 2004). Back
20
UN millennium development goals to be achieved by 2015 - the eradication
of extreme poverty and hunger, achievement of universal primary
education, promotion of gender equality and female empowerment,
reduction of child mortality, improvement of maternal health,
combat of HIV/Aids, malaria and other diseases, environmental
sustainability and a global partnership for development. Back
21
Page 2 of the Communication. Back
22
Page 2 of the Communication. Back
23
Page 3 of the Communication. Back
24
Page 3 of the Communication. Back
25
Page 4 of the Communication. Back
26
The CARDS, TACIS and MEDA programmes provide assistance to, respectively,
the Western Balkans, the Commonwealth of Independent States and
the EU's Mediterranean neighbours. Back
27
i.e. under the EC Treaty. Back
28
Para 13 of this Report. Back
29
Article 177 EC. Back
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