5 Financial instruments for EU external
action
| (a)
(30572)
9213/09
COM(09) 196
(b)
(30573)
9225/09
SEC(09) 530
(c)
(30612)
9268/09
COM(09) 195
(d)
(30639)
10408/1/09
+ADDs 1-3
COM(09) 197
|
Commission Communication: Mid-term review of the financial instruments for external actions
Commission Staff Working Document: Report evaluating the implementation of the financial implements for external action
Draft Regulation amending Regulation (EC) No. 1717/2006 establishing an Instrument for Stability
Draft Council Regulation amending Regulation (EC) No. 1934/2006 establishing a financing instrument for cooperation with industrialized and other high-income countries and territories
|
| Legal base
| (a) —
(b) —
(c) Article 181a EC; QMV; co-decision
(d) Article 179a and 181a EC; QMV; co-decision
|
| Documents originated
| (a)- (c) 21 April 2009
(d) 22 April 2009
|
| Deposited in Parliament
| (a) and (b) 29 April 2009
(c) 1 May 2009
(d) 5 June 2009
|
| Department
| Foreign and Commonwealth
|
| Basis of consideration
| EM of 7 July 2009
|
| Previous Committee Report
| None |
| To be discussed in Council
| To be determined
|
| Committee's assessment
| Politically important
|
| Committee's decision
| Not cleared; further information requested
|
Background
5.1 In preparation for the 2007-13 financial
perspective, the Commission, Council and the European Parliament
simplified a plethora of different financial regulations, or Instruments.
These include what the Commission's Europeaid website describes
as "The EU's financial toolkit", whose main elements
are as follows:
EUROPEAN NEIGHBOURHOOD AND PARTNERSHIP INSTRUMENT
(ENPI)
The ENPI provides EU assistance to 17
countries: Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia,
Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the Palestinian
Authority, Russia, Syria, Tunisia and Ukraine. It comprises a
specific cross-border co-operation component covering border regions
in the European Union Member States.
DEVELOPMENT CO-OPERATION INSTRUMENT (DCI)
The DCI covers three main components.
The first is to provide assistance to South Africa and 47 developing
countries in Latin America, Asia and Central Asia, and the Middle
East (only those countries not covered by the European Neighbourhood
and Partnership Instrument or the European Development Fund).[14]
Secondly, it supports the restructuring of sugar production in
18 ACP countries. Thirdly, it runs five thematic programmes: investing
in people; environment and sustainable management of natural
resources including energy; non-state actors and local
authorities in development; food security; as well
as migration and asylum.
The five DCI thematic programmes support
actions in all developing countries (including those covered by
ENPI and the EDF), global actions and external projections of
as well as the fleshing out of Commission internal policies.
EUROPEAN INSTRUMENT FOR DEMOCRACY & HUMAN RIGHTS
(EIDHR)
EIDHR contributes to the development
of democracy, the rule of law, respect for human rights and fundamental
freedoms. It has been designed to complement the various other
tools for implementation of EU policies in this area, which range
from political dialogue and diplomatic demarches to various instruments
of financial and technical co-operation, including both geographic
and thematic programmes. It also complements the more crisis-related
interventions of the new Stability instrument.
INSTRUMENT FOR STABILITY (IFS)
The IfS aims to contribute to stability
in countries in crisis by providing an effective response to help
preserve, establish or re-establish the conditions essential to
the proper implementation of the EU's development and co-operation
policies (the 'Crisis response and preparedness' component).
In the context of stable conditions
for the implementation of EU co-operation policies in third countries,
the IfS helps to build capacity both to address specific global
and trans-regional threats having a destabilising effect and to
ensure preparedness to address pre- and post-crisis situations
(the 'global and regional trans-border challenges' component).
The 'crisis response and preparedness'
component is managed by Directorate General External Relations.
The 'global and regional trans-border challenges' component is
managed by EuropeAid.
NUCLEAR SAFETY CO-OPERATION INSTRUMENT (NSCI)
NSCI finances measures to support a
higher level of nuclear safety, radiation protection and the application
of efficient and effective safeguards of nuclear materials in
third countries.[15]
5.2 In addition, the overall package
includes:
THE INSTRUMENT FOR COOPERATION WITH INDUSTRIALISED
COUNTRIES (ICI)
The ICI promotes cooperation between
the European Union and seventeen industrialised and other high-income
countries and territories in North America, the Asia-Pacific region
and the Gulf region
THE INSTRUMENT FOR PRE-ACCESSION ASSISTANCE (IPA)
This is the vehicle by which pre-accession
technical assistance is delivered to candidate countries.
THE HUMANITARIAN AID REGULATION
The extant Humanitarian Aid Regulation
was not amended.
5.3 The Committee considered these on
several occasions during the gestation process, culminating in
a debate in the European Standing Committee on 10 November 2005,[16]
and subsequently, particularly during the formulation of the thematic
programmes.
The Commission Communication
5.4 The Commission notes that the new
instruments are being implemented through Country Strategy Papers,
Regional Strategy Papers, Thematic Strategy Papers and, for the
IPA, Multi-annual Indicative Planning Documents. These programming
documents, accompanied by multi-annual financial allocations,
"allow clear commitment and delivery of aid in partnership
with the beneficiaries."
5.5 The Commission further notes that:
— they are required under
these regulations to submit a report on their implementation by
31 December 2010, and to propose any necessary amendments;
— in final negotiations before
the instruments were adopted, the Commission agreed — at
the European Parliament's request — to carry out the review
before the 2009 European Parliament elections and to take Parliament's
reports and recommendations into account;
— this mid-term review (MTR)
covers the legal instruments only;
— European Parliament recommendations
not affecting the legal texts will be considered in the mid-term
review of the strategy and programming documents;
— that latter review will
assess performance so far and update the strategies in the light
of developments in partner countries, when "particular attention
will be paid at that point to civil society participation and
aid effectiveness";
— the review process and updated
strategy papers, together with multi-annual indicative programmes
allocating the budget for 2011-2013 by sector, are expected to
be completed by the end of 2009;
— the IPA is governed by a
different strategy and programming framework which covers a rolling
three-year period updated annually in line with the Enlargement
Strategy Paper.
5.6 This present MTR "aims to verify
that the instruments are meeting the objectives set for the reform,
partly through major simplification". Thereafter, "simplification
being an ongoing process, the Commission will also consider the
scope for further improvements, including amendments to the Financial
Regulation, in particular as regards the control environment."
5.7 The Commission is accompanied by
a Commission Staff Working Paper reporting in more detail on the
individual instruments; and two legislative proposals, where the
Commission has concluded from the review that certain amendments
are necessary.
5.8 In her Explanatory Memorandum of
7 July 2009, the Minister for Europe at the Foreign and Commonwealth
Office (Baroness Kinnock of Holyhead) analyses the Commission
proposals as follows:
"The central objective of the
Development Cooperation Instrument (DCI) is the eradication
of poverty, including through the pursuit of the Millennium Development
Goals (MDGs). The Communication notes that delivery of the DCI
objectives is on track. The first wave of strategy papers and
the first three years of Annual Action programmes were drafted
on the basis of donor coordination, dialogue with partner countries
and participation by civil society.
"The European Parliament has
identified some proposed projects that it feels do not meet the
DCI objectives as they are not sufficiently focused on poverty
reduction or do not fulfil the criteria for Official Development
Assistance (ODA). These are primarily with countries that have
emerging economies and middle income countries, and cover projects
based around economic cooperation and education (for example a
European Business and Technology Centre in India). The Commission
proposes to amend the Regulation establishing a financing Instrument
for Cooperation with Industrialised and other high-income countries
and territories (ICI) to enable these activities to be included
in the ICI rather than changing the nature of the DCI.
"Cooperation under the European
Neighbourhood and Partnership Instrument (ENPI) goes beyond
promoting sustainable development and economic growth. It also
supports steps towards economic integration with the EU as enshrined
in the European Neighbourhood Policy (ENP). The Communication
describes how good progress is being made towards supporting the
implementation of ENP action plans, for example financing university
cooperation and twinning initiatives. The Commission propose that
the Regulation should be amended to give the option of setting
up revolving funds, the lack of which severely hampers the Union's
ability to support private sector operations.
"The primary objective of the
Instrument for Pre-accession Assistance (IPA) is to assist
candidates and potential candidates in the process towards EU
membership. In spite of some initial delays due to late approval
of the legal base, programming in 2007 and 2008 largely took place
in a smooth and effective way with implementation starting in
the course of 2008. To increase support in economic and social
development IPA support is coordinated with International Financial
Institutions and other donors. All beneficiary countries have
made progress towards assuming greater responsibility for the
management of IPA programmes. There is no need to modify the IPA
Regulation in the Commission's view.
"The aim of the Instrument
for Stability (IfS) is to provide the Community with a consistent
approach to crisis response. Short term (Article 3) crisis response
measures adopted since the instrument began in 2007 have started
to deliver results; the measures supported a broad range of issues
from transitional justice to post disaster recovery. The longer
term (Article 4) Strategies and Indicative Programmes for 2007-2011,
to counter global and transregional threats — organised
crime; trafficking; proliferation; and threats to infrastructure
and public health — have been adopted after receiving support
from both the IfS Committee (all Member States) and the European
Parliament. The Instrument's Annual Report is due to issue at
the end of June.
"The Commission proposes to
amend the IfS regulation to take into account a judgement by the
European Court of Justice on small arms and light weapons, the
regulations regarding third country participation in long term
measures, and to increase the allocation available for long term
critical infrastructure and public health measures.
"The contractual phase of the
European Instrument for Democracy and Human Rights (EIDHR)
only started in autumn 2008. The Communication states that it
is therefore too early to evaluate delivery against its objectives,
which are to address global, regional, national and local human
rights and democratisation issues, mainly in partnership with
civil society and independently of the consent of third-country
governments and other public authorities. In the Commission's
view the wording in the Regulation on taxes, duties and charges
needs to be aligned with the other Instruments.
"The Instrument for Nuclear
Safety Cooperation (INSC) covers actions in the field of nuclear
safety and safeguards, the transition from the previous instrument
has been smooth. The INSC has refocused cooperation and extended
geographical coverage to include third countries. The Communication
notes that no revision of the regulation is required at this stage.
"The Instrument for Cooperation
with Industrialised and other high-income countries and territories
(ICI) has proved effective in developing co-operation in the
areas of: public diplomacy; economic partnership and business
cooperation; and people to people links.
"From 2011 the ICI will also
incorporate the current pilot project on transatlantic methods
for handling global challenges (a European Parliament initiative),
this will be financed from the current financial envelope. The
Commission also proposes to amend the ICI regulations to cover
some DCI projects, by extending its geographical coverage"
(as noted above).
The Government's view
5.9 The Minister says that she "strongly
supports the need for reviews of Instruments funded from the EC
Budget, to ensure that objectives are being met as well as sound
financial management", and is "generally satisfied with
progress to date on all the Instruments, and looks forward to
the mid term performance reviews of each Instrument." She
continues as follows:
"The European Parliament has
taken the view that some proposed activities under the DCI programmed
by the Commission were not sufficiently geared to poverty eradication
and the Millennium Development Goals or did not fulfil the criteria
for Official Development Assistance (ODA). The Commission propose
to address this by amending the ICI regulation to extend its geographical
scope to include DCI countries. How the activities are funded
under the revised ICI needs to be closely monitored. The UK would
be opposed to any reduction in the financial allocation for the
DCI, so any proposed amendment to the ICI would need to be
framed within the ICI's current financial ceiling.
"Under the ENPI, the UK will
look carefully at the development of the newly agreed Eastern
Partnership initiative, a €600million programme of political
cooperation and economic integration between the EU and its six
Eastern neighbours (Ukraine, Moldova, Armenia, Georgia, Belarus
and Azerbaijan). The UK's key priority is to ensure that the new
proposal is realistic and in line with partner country needs,
priorities and absorption capacity.
"The Instrument for Stability
(IfS) Regulation will be amended in three areas:
· "to bring it in line
with case law, following a judgement of the European Court of
Justice (Case C-91/05 ECOWAS) on small arms and light weapons
(SALW). The Commission proposes to amend Articles 3(2)(i) and
4(1)(a) to remove the restriction on support for measures taken
by third countries to combat the illicit use of and access to
SALW;
· "to revise the provisions
on the participation of OECD countries which are not EU Member
States in longer term projects under Article 4(3) and bring them
inline with participation in the short term measures under Article
3.
· "to increase the budget
limit for Article 4(1) measures concerning threats to law and
order, critical infrastructure and public health, from 7% to 10%;
any costs will be met from within the overall SI budget allocation."
5.10 The Minister goes on to explain
that:
"The Council (including Member
States) and the Commission were in dispute over the role the Community
could play in countering the illegal trade in SALW, leading to
the Commission challenging the Council in the European Court of
Justice (ECJ) in Case C-91/05. The judgement states that measures
to combat small arms fall within the competences of the Community
and cannot be pursued under the Common Foreign Security and Defence
Policy (CFSP) if their main aim relates to development policy.
While the judgement makes the distinction between Council and
Commission competences clearer, the UK will work to ensure that
the amendments allow some SALW non-proliferation issues to remain
within the CFSP sphere without the risk of being challenged as
inconsistent with Article 47 of the EU Treaty."
5.11 Looking ahead, the Minister says
that discussion of the overview Communication is expected to begin
in July, with discussions on the individual proposals to amend
the various instruments expected to commence in the autumn.
Conclusion
5.12 As the Commission makes clear,
the next Mid-Term Review — assessing performance so far,
updating the strategies in the light of developments in partner
countries, paying "particular attention … to civil society
participation and aid effectiveness", updating strategy papers
and multi-annual indicative programme allocating — that
is to be completed by the end of 2009 is perhaps the more important
of these two exercises.
5.13 Even so, the Minister indicates
that the proposed amendments to the regulations are not entirely
straightforward. We should therefore be grateful if the Minister
would write to us after the "overview" Communication
has been considered by the Council; and would also keep us informed
about discussions with the European Parliament.
5.14 We also ask that she continues
to keep us informed over the unresolved question of where the
€600 million for the new Eastern Partnership is to be found.
5.15 In the meantime we shall retain
the documents under scrutiny.
14 European Development Fund
(EDF); based on the Cotonou agreement, which provides the bedrock
of EU co-operation with African, Caribbean and Pacific countries,
the EDF supports assistance to the Union's 78 ACP partner countries
and the overseas countries and territories of Member States. The
10th EDF entered into force in January 2008. Back
15
See http://ec.europa.eu/europeaid/what/delivering-aid/funding-instruments/index_en.htm
for full details. Back
16
See http://www.publications.parliament.uk/pa/cm200506/cmstand/euro/st051110/51110s01.htm
for the record of this debate. Back
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