17 EU External Action: the Instrument
for Stability
| (32103)
15764/10
COM(10) 512
+ ADD 1
| Commission Report: Annual Report on the Instrument for Stability in 2009
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| Legal base | —
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| Document originated | 28 September 2010
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| Deposited in Parliament | 9 November 2010
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| Department | Foreign and Commonwealth Office
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| Basis of consideration | Minister's letter of 21 December 2010
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| Previous Committee Report | HC 428-x (2010-11), chapter 7 (8 December 2010); also see (30859) 12674/10: HC 19-xxvi (2008-09), chapter 18 (10 September 2009); and (29656) —: HC 16-xxiv (2007-08), chapter 11(18 June 2008) and (27653-55) —: HC 34-xxxv (2005-06), chapter 11 (12 July 2006)
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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 | Cleared
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Background
17.1 Towards the end of the previous Financial Perspective, the
Commission and Council decided to replace the then plethora of
financial instruments for the delivery of external assistance
with a simpler, more efficient framework. Instead of the wide
range of geographical and thematic instruments that had grown
up in an ad hoc manner over time, the new framework comprises
six instruments only, four of them new. The four new instruments
are:
— an
Instrument for Pre-Accession Assistance;
— a European Neighbourhood and Partnership
Instrument;
— a Development Cooperation and Economic
Cooperation Instrument; and
— an Instrument for Stability.
17.2 The first three all essentially repackage existing
EC activity. The Instrument for Stability, however,
is a new instrument to tackle crises and instability in third
countries and address trans-border challenges including nuclear
safety and non-proliferation, the fight against trafficking, organised
crime and terrorism. [74]
17.3 The previous Committee cleared the draft IfS
Regulation on 12 July 2006.[75]
At that time, it noted that the then Minister for Europe (Mr Geoffrey
Hoon) confirmed that an original concern — how in practice
it would be prevented from encroaching on Common Foreign and Security
Policy (CFSP) activities and objectives — had been overcome:
the later stages of negotiation were difficult precisely because
of the need to maintain a clear distinction from CFSP activities;
but having worked hard to ensure that activities covered by the
Regulation were limited to those falling within the scope of the
Community's powers relating to development co-operation and economic
co-operation, he was satisfied that the agreed text met concerns
in these areas. He said that the Stability Instrument would cater
for many of the kinds of activities the existing Rapid Reaction
Mechanism was intended to cover as well as other existing Community
activities in relation to, for example, combating anti-personnel
landmines, reestablishment of civilian administration in DR Congo
and Afghanistan, planning economic reconstruction in Iraq and
supporting post-tsunami reconstruction around the Indian Ocean
— all of which, he said, were of critical importance to
the then Government's objectives. The Commission would be required
to submit all projects for the opinion of the Stability Instrument
Management Committee, composed of representatives of all Member
States — something on which he said that he had insisted,
in order to exercise proper political control.
17.4 The Instrument for Stability was allocated €2.1
billion between 2007 and 2013. The UK's share of the allocation
was 17%, i.e. €350.5 million.
17.5 An Annual Report must be submitted to the European
Parliament and the Council in compliance with Article 23
of Regulation (EC) No. 1717/2006 of the European Parliament and
the Council of 15 November 2006 establishing an Instrument for
Stability (the IfS Regulation).
17.6 The previous Committee's consideration of the
2008 Report noted that, on the key issue of evaluation, the then
Minister for Europe said the Commission intended to conduct a
full evaluation of 2007 and 2008 short term measures in 2009/10,
in which the UK was participating; and that the long term crisis
preparedness measures were harder to evaluate at that stage as
some 2007 projects had only started to be implemented in 2009.
17.7 The previous Committee thought that the good
start that it noted a year earlier appeared to have been consolidated,
but that the acid test would be the mid-term review in 2010.
17.8 Though the report raised no concerns at this
juncture, it considered that it warranted a Report to the House
because of the magnitude of expenditure, the nature of the issues
that the IfS is designed to tackle and the inter-relationship
with the Council's ESDP activities.
17.9 It also cleared the document.[76]
The 2009 Annual Report
17.10 Work undertaken by the IfS in 2009 is split
into:
— Article
3 (77% of total funding): short term projects designed to provide
assistance to help countries respond to crisis or emerging crisis;
— Article 4 (19% of total funding): longer-term
measures to address crisis preparedness and trans-regional security
threats;
— administrative costs (4%).
17.11 The 2009 Annual Report (which is summarised
in our previous Report)[77]
outlines the progress of the short term IfS measures launched
in that year and provides an update on the financial commitments
of the long-term projects. It was commented upon in his Explanatory
Memorandum of 22 November 2010 by the Minister for Europe (Mr
David Lidington), who noted that the IfS:
— enables
the EU to respond quickly to crisis and instability overseas when
timely financial help cannot be provided by other EU sources;
— complements wider EU engagement in line
with CSDP interventions and longer term goals; and
— focuses its projects on a range of key
issues, such as supporting mediation, confidence building and
strengthening the rule of law in EU partner countries.
17.12 The Minister also referred to the Council Decision
establishing the European External Action Service (EEAS), which
includes the future arrangements for the management of the IfS
and other Community Instruments:
"Precisely how these arrangements will operate
in practice will become clearer once the EEAS is fully up and
running. The Government is content with the principles set out
in the decision including the division of roles between the EEAS
and the Commission. The European Parliament tried without success
to reopen some of these principles during negotiations on the
EEAS budget and the amending of staff and financial regulations.
On 27 October the Commission announced it was creating a new "Foreign
Policy Instruments Service" which will be under the political
authority of Baroness Ashton in her role as Commission Vice-President."
Our assessment
17.13 We reported this information to the House for
the same reasons as did our predecessors.
17.14 Though the activities funded by the IfS appeared
to be entirely appropriate, we endorsed the previous Committee's
view that effectiveness is key, and therefore asked the Minister
what the Commission's evaluation is of the Instrument's effectiveness
thus far.
17.15 We also asked the Minister to elaborate on
the new "Foreign Policy Instruments Service"; and in
particular to remind the House what the principles set out in
the Decision are, including the division of roles between the
EEAS and the Commission; how the European Parliament sought have
them changed; and how the new "Foreign Policy Instruments
Service" safeguards the present arrangements.
17.16 In the meantime, we retained the document under
scrutiny.[78]
The Minister's letter of 21 December 2010
17.17 In his letter, Minister for Europe (Mr David
Lidington) responds as follows:
"The Commission argues that the IFS is a successful
financial instrument and they believe that the latest Annual Report
(2009) sufficiently measured the effectiveness of various IFS
projects. Since the creation of the IFS in 2007, the number of
projects has expanded and funding has been more effectively managed.
For instance, the execution rate of IFS funding related to actions
undertaken in response to crisis increased from 68% in 2007, to
86% in 2008 and stood at 90% in 2009. The Commission uses this
progressive increase as evidence that the IFS is effective.
"The UK continues to support the overall objectives
of the IFS and has received positive feedback on its activities
from FCO Posts in a number of countries where the IFS is engaged.
However, we would still like to see more information on the actual
outcomes achieved by IFS-supported activities. Although the 2009
Annual Report is an improvement on previous reports I believe
that it relies too much on measurable inputs (such as the level
of funding provided) rather than actual outcomes as a means of
assessing IFS effectiveness. A stronger focus on project results
is needed which I believe would help IFS projects adapt to changing
situations on the ground and better demonstrate their impact to
EU Member States in the future. Improving the general level of
EU reporting to better measure effectiveness and ensure greater
value for money is something that I am keen to pursue more broadly
in the future."
17.18 The Minister then recalls the split among IFS
activities between short term projects designed to respond quickly
to crises or emerging crises around the world and long term projects
with a stronger focus on addressing the root causes of instability,
and continues as follows:
"The division of roles between the European
External Action Service (EEAS) and the Commission for management
of EU external assistance instruments was agreed as part of the
wider Council Decision of 26 July 2010. Article 9 of this Decision
makes clear that 'the management of EU external cooperation programmes
is under the responsibility of the Commission' but that 'the High
Representative shall ensure overall political coordination of
the EU's external action'. In practical terms, this means that
staff based in the EEAS are responsible for the early stages of
the programming cycle, including country and regional strategies,
while staff in the Commission are responsible for the later stages
such as the implementation of projects on the ground. This division
of roles applies to most EU external assistance instruments including
the long-term component of the IFS. It is reflected in an Annex
to the EEAS Decision which makes clear that staff responsible
for management of financial instruments will remain in the Commission
rather than transferring into the EEAS.
"For a limited number of instruments with a
stronger foreign policy focus, including the short-term component
of the IFS, the EEAS Decision grants the High Representative a
stronger role in her capacity as Vice-President of the Commission,
as set out in Article 9(6):
'Actions undertaken under the CFSP budget, the
Instrument for Stability except the part referred to in the seventh
indent of paragraph 2, the Instrument for Cooperation with Industrialised
Countries, the Communication and Public Diplomacy as well as the
Election Observation Missions are under the responsibility of
the High Representative/EEAS. The Commission shall be responsible
for their financial implementation under the authority of the
High Representative in her capacity as Vice-President of the Commission.
The Commission department responsible for this implementation
shall be co-located with the EEAS.'[79]
"The agreed division of roles set out in Article
9 followed a prolonged debate both between Member States in Council
and between the various EU institutions. The UK was content with
the outcome including the principle that responsibility for practical
implementation of projects should remain with the Commission.
"Since July the debate has focused on practical
implementation of the principles set out in the EEAS Decision.
In the course of negotiations on the EEAS budget for 2011, as
well as on amending staff and financial regulations, a number
of MEPs raised questions and concerns about the IFS staffing arrangements.
In particular, the EP's IFS Rapporteur argued that all staff responsible
for the short-term IFS component, including those responsible
for practical implementation of projects, should be transferred
into the EEAS. The Commission rejected this argument, citing Article
9 of the EEAS Decision in its defence. Instead, the Commission
announced on 27 October the creation of a new Foreign Policy Instruments
Service (FPIS) to assume responsibility, inter alia, for practical
implementation of short-term IFS projects. As part of the same
announcement the Commission also confirmed that DG Europe-Aid
and DG Development would be merged to form a new 'Europe-Aid Development
and Co-Cooperation Directorate-General' (DG DEVCO).
"Further details of how the FPIS will operate
are still awaited but our understanding is that its responsibilities
will include implementation of the short-term IFS component as
well as other instruments referred to in Article 9(6) of the EEAS
Decision — e.g. public diplomacy and electoral observation
missions. In order to facilitate a joined-up approach, FPIS staff
will be co-located with the EEAS and will report to the High Representative
in her capacity as a Vice-President of the Commission. On 14 December
the Commission announced a series of senior appointments including
the transfer of Tung-Lai Margue, a Luxembourg official, who will
head up the FPIS.
"In light of the EEAS Decision, the UK judges
this to be a satisfactory outcome and will now focus on ensuring
that the agreed arrangements will work smoothly. In particular,
we shall want to ensure that EEAS staff who are responsible for
setting strategic priorities for the short-term IFS component
adopt a comprehensive approach to stabilisation integrating both
the military and civilian dimensions. In addition, we also want
to ensure that EEAS staff build up an effective working relationship
not only with the FPIS but also with DG DEVCO which will have
responsibility for implementing the long-term IFS component. All
these arrangements will be assessed in due course as part of the
planned review of the EEAS in 2013. The UK will also have an opportunity
to contribute to longer-term thinking on the IFS as part of a
consultation exercise just launched by the Commission on the role
of EU external assistance instruments in the 2014-2020 Financial
Perspective."
Conclusion
17.19 We note what the Minister has to say about
the need for more information on the actual outcomes achieved
by IfS-supported activities as a means of assessing IfS effectiveness,
and for a stronger focus on project results. We also note what
he has to say about the need to ensure that EEAS staff responsible
for setting strategic priorities for the short-term IfS component
develop an effective working relationship not only with the Foreign
Policy Instruments Service but also with DG DEVCO, given its responsibility
for implementing the long-term IfS component. We accordingly ask
that, when he submits the report on IfS activity in 2010, he evaluates
the extent to which this has all been achieved.
17.20 We also endorse his determination to improve
similar EU reporting so that it better measures effectiveness
and thus ensures greater value for money, and hope to see that
reflected in other such annual reports in the coming years.
17.21 We now clear the document.
74 Two existing instruments, for Humanitarian Aid,
and for Macro Financial Assistance, were judged not to be in need
of modification, and were maintained. See http://europa.eu/rapid/pressReleasesAction.do?reference=IP/04/1151&format=HTML&aged=0&lg=et&guiLanguage=en
for further background. Back
75
See headnote: HC 34-xxxv (2005-06), chapter 11 (12 July 2006). Back
76
(30859) 12674/10: see headnote HC 19-xxvi (2008-09), chapter 18. Back
77
See headnote: HC 428-x (2010-11), chapter 7 (8 December 2010). Back
78
Ibid. Back
79
The Minister's italics. Back
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