Documents considered by the Committee on 12 January 2011 - European Scrutiny Committee Contents

17 EU External Action: the Instrument for Stability



COM(10) 512

+ ADD 1

Commission Report: Annual Report on the Instrument for Stability in 2009

Legal base
Document originated28 September 2010
Deposited in Parliament9 November 2010
DepartmentForeign and Commonwealth Office
Basis of considerationMinister's letter of 21 December 2010
Previous Committee ReportHC 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)
To be discussed in CouncilTo be determined
Committee's assessmentPolitically important
Committee's decisionCleared


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."


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 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   IbidBack

79   The Minister's italics. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 27 January 2011