Select Committee on European Scrutiny Thirty-Seventh Report

52 EC External Action — new instruments for co-operation







Draft Regulation establishing an Instrument for Pre-Accession Assistance

Draft for a Regulation establishing European Neighbourhood and Partnership Instrument

Draft Regulation establishing an Instrument for Stability

Legal base(a) Article 181a EC; unanimity for candidate countries, QMV for others; consultation

(b) Articles 179 and 181a EC; QMV; co-decision

(c) Articles 179 and 181a EC; QMV; co-decision

DepartmentForeign and Commonwealth Office
Basis of considerationLetter of 17 August 2006
Previous Committee Reports(26041-5) 13686-90/04: HC 34-iv (2005-06), para 3 (20 July 2005), HC 38-v (2004-05), para 9 (26 January 2005) and HC 38-i (2004-05), para 13 (1 December 2004). Also see (25367) 6232/04: HC 42-xv (2003-04), paras 1-37 (24 March 2004) and (25847) 11607/04: HC 42-xxxiv (2003-04), para 13 (27 October 2004)
To be discussed in Council17-18 July 2006 General Affairs and External Relations Council
Committee's assessmentPolitically important
Committee's decisionCleared, but further information requested


52.1 Hitherto, the EC's External Actions spending has been funded from a multitude of diverse instruments and budget lines. As part of the 2007-13 Financial Perspective, the Commission proposed, in September 2004, that all External Actions' spending should be rationalized and simplified under one heading (Heading 4) and implemented under six Instruments. Three new instruments would support EU external policies directly:

—  a Pre-Accession Instrument (IPA) for candidate and potential candidate countries covering institution-building, co-operation, rural development and human resources development;

—   a European Neighbourhood and Partnership Instrument (ENPI) for all countries covered by the European Neighbourhood policy, to enhance political security, economic and cultural co-operation and to offer participation in EU activities; and

—  a Development Co-operation and Economic Co-operation Instrument (DCECI) , which would both encompass co-operation with developed and developing economy partners and support the poorest countries in reaching the UN Millennium Development Goals, and which the Commission proposed should incorporate the successor to the 9th European Development Fund (i.e. that the EDF should be "budgetised").

52.2 These three Instruments would be complemented by three thematic Instruments, principally to respond to crisis situations until normal co-operation can resume: the existing, essentially unchanged Humanitarian Aid and Macro Financial Assistance Instruments and a new Instrument for Stability.[132]

52.3 Although broadly supportive of the Commission proposals, the relevant FCO and DfID Ministers had a number of concerns, principally that the IPA, ENPI and DCECI were more geographical than developmental; about the EDF "budgetisation" proposal; and that the Stability Instrument was much less well-defined than the others, with a real risk of overlap with both CFSP and actions under the JHA pillar and an uncertain legal basis (Article 308 TEC).

52.4 Both we and our predecessors considered these documents on several occasions, eventually recommending them for debate.[133] On 10 November 2005 the European Standing Committee concluded that it "agrees with the Government that they provide a good basis for discussion of external actions spending (Heading 4) in the next Financial Perspectives 2007-2013".[134]

The Proposed Regulations

52.5 In his three Explanatory Memoranda of 5 July 2006, the Minister for Europe (Mr Geoffrey Hoon) explains that, following agreement in Coreper, the text of each Instrument was agreed by the European Parliament on 4 July, and the Presidency will aim for Council approval at the 17-18 July General Affairs and External Relations Council.


52.6 The countries covered by the IPA are: Croatia, Turkey, the former Yugoslav Republic of Macedonia, Albania, Bosnia and Herzegovina, Montenegro and Serbia, including Kosovo (as defined in UNSCR 1244). The IPA will replace the existing geographic and thematic programmes of assistance (Phare, ISPA, SAPARD and Turkey pre-accession instruments, as well as the CARDS instrument). The Minister continues as follows:

"The IPA's overall objective is to assist EU candidate countries and potential candidate countries in progressive alignment with the standards and policies of the EU, with a view to eventual membership. The overall scope of the instrument is set out in Article 2, and includes a wide range of areas. IPA programming and implementation is divided into five components. These are Transition Assistance and Institution Building; Cross-Border Co-operation; Regional Development; Human Resources Development; and Rural Development.

"The IPA makes a distinction between EU candidate countries and potential candidate countries. Only candidate countries are eligible for assistance under the Regional Development, Human Resources Development and Rural Development components. These three components are aimed at preparing candidate countries for the management of Structural Funds, and largely mirror Structural Funds regulations. To manage this type of assistance, a country has to operate decentralised management structures, and have demonstrated autonomous programming and management capabilities. Potential candidates are still eligible to receive funds in the areas covered by the three components, but the assistance must be provided through the Transition Assistance and Institution-Building component. This enables potential candidates to build their capacity in these decentralised programming and management structures, and will allow them to prepare for structural funds once they become candidates.

"The political framework for the IPA will remain the annual enlargement package. This includes the European and Accession Partnerships, the Progress Reports and the Enlargement Strategy Paper. This package will also include a Multi-annual Indicative Financial Framework (MIFF), which will present the planned allocation of funds, in line with the priorities outlined in the package. The MIFF will be established on a three year rolling basis.

"A Multi-annual Indicative Planning Document (MIPD) will be established for each country. This planning document will present indicative allocations for the main priorities within each component. Like the MIFF, this will be established on a three year rolling basis, and reviewed annually. Assistance on a programme level will be provided through specific multi-annual or annual programmes, by country and by component. Article 7 outlines the content of these documents.

"The IPA regulation establishes an IPA Committee, composed of Member State representatives and chaired by the Commission. This will assist the Commission in ensuring the co-ordination and coherence between assistance granted under the different components, and will operate according to the procedure laid down for a management committee."

52.7 The Commission will submit to the Council and European Parliament, by 31 December 2010, a report evaluating the implementation of the Regulation in the first three years. This is in addition to regular evaluation reports, of efficiency and effectiveness against objectives, which shall be sent to the IPA Committee for discussion and feedback into programme design and resource allocation.

The Government's view

52.8 The Minister says that the Government remains a great supporter of EU enlargement; that it has spread security and prosperity across Europe; and that it is in the interests of current and future EU states that the process continues. He continues as follows:

"The new IPA will support candidates and potential candidates in their preparations for EU membership. We welcome the streamlining of all pre-accession assistance within a single framework, which should ensure that EU assistance is provided in a co-ordinated, coherent, and effective manner.

"The UK is committed to improving the effectiveness of EU expenditure. Therefore, we welcome the language on best practice in the delivery of assistance. Specifically, we welcome the requirement in Article 7 that all programme objectives shall be specific, relevant and measurable, and have time-bound benchmarks; we support the provisions for donor co-ordination in Article 20, which will further effective coordination of EU assistance with that of other donors, including member states and other multilateral donors such as the UN; and we are pleased that the regulation has taken on board many of the findings of the recent evaluations of previous instruments of assistance to the region and the lessons from the accession countries. The framework regulation contains sufficient recognition of the economic and social challenges that countries face on the path towards EU integration, and of the need to address these."

52.9 The Minister says that the Indicative Financial Framework for this instrument for 2007-13 is €11,468 million at current prices — a reduction from the Commission's original proposed allocation of €12,919 million — which he believes will provide the necessary funding to support the preparations of all candidates and potential candidates for EU accession.


52.10 The countries covered by the ENPI are: Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the Palestinian Authority of the West Bank and Gaza Strip, the Russian Federation, Syria, Tunisia and Ukraine. The ENPI will cover all assistance by the European Union to these countries, except areas covered by the Stability Instrument and proposed new Instruments for Democracy and Human Rights and Thematic Programmes[135] (including migration and the environment). The ENPI will replace existing geographic and thematic programmes of assistance (TACIS, MEDA, Euratom, financial and technical co-operation with the West Bank and Gaza). The ENPI aims to promote enhanced co-operation and progressive economic integration between the European Union and the partner countries and, in particular, in the implementation of Partnership and Cooperation Agreements, Association Agreements or other existing and future agreements; and to encourage partner countries' efforts aimed at promoting good governance, and equitable social and economic development.

52.11 The Minister describes an extended list of areas of potential co-operation, running from (a) to (y), as "combining neighbourhood issues with traditional development objectives" in which "a new emphasis will be placed on cross-border co-operation, bringing together regions of Member States and partner countries sharing a common border (land or sea)". Assistance is to be for the common benefit of both Member States and partners, and adjoining regions can be associated. "Specific provisions for cross-border programmes, modelled on the Structural Funds approach, are included in the Regulation."

52.12 The objectives will be met through country or multi-country, and cross-border programmes, based on Strategy Papers and Multi-annual Indicative Programmes for 2007-10. The baseline will be the level of assistance provided under the present Financial Perspectives to beneficiary countries and regions; thereafter, "due account will be taken of the readiness of these countries to set and implement objectives agreed with the Union, and future funding will grow accordingly". Priorities for assistance will be developed on the basis of action plans established in bilateral agreements between the EU and partner countries. Where action plans do not exist, assistance may still be provided when relevant to pursue EU objectives. The same evaluation process will be applied as in the IPA.

The Government's view

52.13 The Minister says:

"We support the European Neighbourhood Policy, for which this instrument will provide financial and technical support. This policy is designed to strengthen relationships with neighbouring countries, encouraging the same sorts of reforms that have been generated through the enlargement process. We support the list of countries included in the European Neighbourhood and Partnership Instrument and welcome the new emphasis on cross-border programmes. We are pleased that the scope of the Instrument now specifies support for equitable development in addition to general cooperation and integration.

"We broadly welcome the objectives set out in Article 2 of the draft Regulation, particularly the strengthened references to civil society, and support their implementation. We similarly welcome the provision in Article 4 to waive a requirement for co-financing in certain cases when this is necessary to support the development of civil society and non-state actors for measures aimed at promoting human rights and fundamental freedoms and supporting democratisation.

"We are also pleased that the Regulation does not include a percentage split between the eastern and southern neighbours. The annexed Commission Declaration makes clear that, although the baseline for assistance to particular countries and regions will be the levels under the present Financial Perspectives, resource allocation in future years will be determined objectively rather than on historical precedents. We welcome the inclusion of clauses aiming to ensure best practice in the management of these Community programmes, including by strengthening coordination with other donors and increased emphasis on learning lessons from past assistance."

52.14 The Minister says that the Indicative Financial Framework for this instrument for 2007-13 is €11,181 million in current prices:

"We believe that there is scope for a smaller overall budget increase than proposed, in order to ensure a fairer share of resources for areas where funding looks set to decline while needs remain acute (particularly Asia). The Government will keep a close eye on annual budget appropriations and will seek to maximise resources where needs and impact are greatest."


52.15 The Minister says that the scope of the Stability Instrument has changed in the course of the negotiations. He recalls that nuclear safety elements were originally included and says that "the decision (which we supported) to change the legal base of the Instrument from Article 308 to Articles 179 and 181a of the Treaty establishing the European Community meant that a separate Instrument for Nuclear Assistance would be required to cover these elements". The General Objectives are set out in Article 1 as follows:

a)  "In a situation of crisis or emerging crisis, to contribute to stability by providing an effective response to help preserve, establish or re-establish the conditions essential to the proper implementation of the Community's development and cooperation policies.

b)  "In the context of stable conditions for the implementation of Community cooperation policies in third countries, to help build capacity both to address specific global and transregional threats having a destabilising effect and to ensure preparedness to address pre- and post-crisis situations."

52.16 In addition, sub-paragraph 3 of that Article notes that "Measures taken under this instrument may be complementary and shall be consistent with and without prejudice to measures adopted under Title V and Title VI of the TEU", which are the Titles that relate, respectively, to the provisions on a Common Foreign and Security Policy and on Police and Judicial Cooperation in Criminal Matters.

52.17 Article 2 says that Community assistance under this Regulation shall complement that provided under related Community instruments for external assistance and be provided only to the extent that those instruments are inadequate to the task in hand; be consistent with the strategic policy framework for the partner country; and be closely coordinated, at decision-making level and on the ground, with Member States' activities. "Long term priorities will be addressed through multi-annual programmes, based on multi-country strategy papers. These will be consistent with, and avoid duplication of, country, multi-country or thematic strategy papers adopted under other Community instruments for external assistance." Annual Action Programmes will set out measures to be adopted on the basis of multi-country Strategy Papers and Multi-annual Indicative Programmes.

52.18 Article 3 sets out in detail, from a) to p), a wide range of assistance that may be provided "in response to situations of crisis or emerging crisis". Together with Article 6, measures are also allowed for in exceptional and unforeseen crisis situations where effectiveness is particularly dependent on rapid or flexible implementation. The Minister explains adds that "these will have a comitology (management procedure) threshold of €20m (below this the Commission is committed to seek the views and guidance of the Council)". There is also scope for Special Measures not provided for in the multi-country Strategy Papers or Multi-annual Indicative Programmes which, if costing more than €5 million, will be subject to the same comitology procedure.

52.19 Article 4 covers "Assistance in the context of stable conditions for co-operation", under the headings of:

—  threats to law and public order, to the security and safety of individuals, to critical infrastructure and to public health;

—  risk mitigation and preparedness relating to chemical, nuclear and biological materials or agents; and

—  pre-and post-crisis capacity building.

52.20 The Commission shall regularly evaluate the results efficiency and effectiveness of measures carried out, and send "significant" evaluation reports to the Management Committee for discussion and feedback into programme design and resource allocation. The Commission shall also submit annual reports to the Council and European Parliament, and, by 31 December 2010, a review evaluating the implementation of the Regulation in the first three years.

The Government's view

52.21 The Minister says that the around 70% of funding under the Stability Instrument will be directed towards short-term assistance to help countries respond to crises or emerging crises, and that the remainder will support longer-term activities to help build capacity to address specific and transregional threats having a destabilising effect, e.g., counter-terrorism, organised crime and trafficking. He goes on to say that the Stability Instrument covers a number of areas where the Government is "keen to see the Community providing financial and technical support including areas where the Community has been very active to date" and that "the UK has therefore been a strong supporter of the Instrument overall".

52.22 He continues as follows:

"One key concern has been to protect the scope of CFSP action. Given that the Stability Instrument inevitably provides a general basis for Community action across a wide range of areas and in fields which are close to those covered by CFSP, we have taken the lead in seeking to ensure that it does not encroach on CFSP activities and objectives."

52.23 The Minister says, without further comment, that the Indicative Financial Framework for this instrument for 2007-13 is €2,062 million in current prices.


52.24 Close to €25 billion over the next Financial Perspective is a large amount of the European taxpayers' money. Measures to rationalise, control and evaluate that expenditure in the ways outlined are therefore much to be welcomed, as is the inclusion in the regulations of mechanisms for continuing Member State involvement in management and for continuing evaluation and feedback.

52.25 Nevertheless, it is plain from some of the Minister's comments that there are still important areas of ambiguity. His remarks on the ENPI suggest that there remain real differences of view over the issue of its "developmental versus geographical" nature. He feels able only "broadly" to welcome its objectives. Moreover, it is not as clear to us as it seems to be to him that the wording in the Commission Declaration to which he refers does make clear that future allocations will be "determined objectively". Furthermore, he suggests that the budget is bigger than it needs to be for the wrong reasons, yet is not able to explain how he will be able to do anything about it, other than to say that he "will keep a close eye on annual budget appropriations" and "seek to maximise resources where needs and impact are greatest" — phrases that are as broad as they are long.

52.26 As for the Instrument for Stability, it is good to know that the UK has taken the lead in seeking to ensure that it does not encroach on CFSP activities and objectives, since it is plain that the very wide range of activities covered by Articles 3 and 4 are precisely those that are being and/or could be carried out inter-governmentally in third countries. But it would have been more reassuring if the Minister had said somewhat more about how this essential outcome has been achieved: were there any difficulties in the negotiations with the Commission and, if so, regarding what aspects? Also, what are the areas where the Community has been very active to date and where the Government is keen to see the Community providing financial and technical support?

52.27 We should therefore be grateful if he would elaborate on the means by which encroachment will be prevented and on his somewhat qualified endorsement of the ENPI, since it will be important in monitoring how these new arrangements work to have as clear a picture as possible of the starting point.

52.28 In the meantime, we clear the documents.

132   (26041) 13686/04, HC 38-i (2004-05), para 9 (1 December 2004). Back

133   See headnote. Back

134   Stg Co Deb, European Standing Committee, 10 November, 2005, Cols 3-36. Back

135   See HC 34-xx (2005-06), paras 5 and 15 (1 March 2006). Back

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