9 Financing EU external action: 11th
European Development Fund
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10212/13
COM(13) 306
| Commission Communication: Provisional application of the Internal Agreement on the financing of EU aid for the period 2014 to 2020, in accordance with the ACP-EU Partnership Agreement
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| Legal base | —
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| Department | International Development
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| Basis of consideration | EM of 13 June 2013
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| Previous Committee Reports | None; but see (33530) 18431/11 and (33533) 18480/11: HC 83-iii (2013-14), chapter 20 (21 May 2013) and HC 83-i (2013-14), chapter 8 (8 May 2013); also see HC 428-xlviii (2010-12), chapter 12 (25 January 2012), HC 86-v (2012-13), chapter 6 (20 June 2012) and HC 86-xxxiv (2012-13), chapter 2 (6 March 2013); also see (33244) 15560/11 + ADDs 1-2: HC 428-xli (2010-12), chapter 6 (9 November 2011)
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| Discussion in Council | 24 June Foreign Affairs Council
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
9.1 The European Development Fund (EDF) is the main instrument
for delivering EU assistance for development cooperation under
the Cotonou Agreement with African, Caribbean and Pacific (ACP)
States and for financing EU cooperation with the Overseas Countries
and Territories (OCT). The EDF is funded outside the EU budget
by the Member States on the basis of specific contribution keys.
Each EDF is concluded for a multi-annual period. The 10th EDF
Internal Agreement, establishing the resources of the 10th EDF
and their share in broad sub-categories, covers the period 2008-13,
and includes provisions on implementation and financial monitoring.
As the current 10th EDF period will expire at the end of 2013,
the Communication and proposal for a Council Decision were produced
in January 2012, to start discussions on the EU's plans for 2014-20.
Commission Communication 18431/11
9.2 Commission Communication, Preparation of the multiannual
financial framework regarding the financing of EU cooperation
for African, Caribbean and Pacific States and Overseas Countries
and Territories for the 2014-20 period (11th European Development
Fund), included a draft EDF11 Internal Agreement. The proposed
overall figure for EDF11 was set at €34,275.6 million. The
UK's share would be 14.33%. The Commission are to present proposals
for the Implementing and Financial Regulations at a later stage.
Council Decision 18480/11
9.3 This Council Decision, on the position to be adopted by the
European Union within the ACP-EU Council of Ministers concerning
the multiannual financial framework for the period 2014-20 of
the ACP-EU Partnership Agreement, is based around the proposed
Internal Agreement, and embodied the position to be taken by the
EU in discussion at the EU/ACP Council of Ministers; once agreed
with the ACP, it forms a new annex to the Cotonou Agreement (and
thus forms part of the EU's External Action: Heading 4 of the
EU budget).
9.4 The Communication and Council Decision are part
of a total package covering Heading 4 of the EU budget, on External
Action, involving a range of other financial instruments (pre-accession
finance, European Neighbourhood Partnership, etc.).
9.5 As noted in our most recent Report on these documents,
the EDF element was de-coupled from the rest of the process and
adopted at the 28 May "Development" Foreign Affairs
Council, to enable a joint EU-ACP decision to be adopted at the
6-7 June annual Joint Ministerial meeting.
9.6 Annex 1c of the Council Decision[53]
sets out a total of €32.218.4 million under the 11th European
Development Fund (EDF) and the main components thereof. It says
that funds shall be made available from the entry into force of
the multiannual financial framework.
9.7 We cleared the Commission Communication and Council
Decision on 21 May 2013.[54]
The Commission Communication
9.8 In her Explanatory Memorandum of 13 June 2013,
the Parliamentary Under-Secretary of State at the Department for
International Development (Lynne Featherstone) explains that this
Commission Communication proposes the provisional application
of a number of articles of the EDF11 Internal Agreement. She
notes that, although the Internal Agreement will be signed by
Member States this month, it will only enter into force once all
27 Member States have ratified it, which is expected to take 18
months or more.
9.9 The Communication accordingly proposes a Decision
to allow for the provisional application of relevant Internal
Agreement articles, so as to ensure all appropriate decision making
procedures and modalities for the implementation and programming
of EDF11 are put in place whilst Member States ratify the agreement
— thereby minimising any delay to the disbursement of funds
once full ratification has been completed. The articles to be
provisionally applied include establishing the Investment Facility
Committee at the European Investment Bank (EIB), the adoption
of an Implementing Regulation and a Financial Regulation and allowing
for the adjustment of contribution keys on the accession of Croatia
to the EU.
9.10 With regard to the Legal and Procedural
aspects, the Minister says:
"The legal basis for the Decision annexed
to the Communication consists of Member States' inherent national
competence. In entering into this decision the 27 MS are acting
outside of the scope of the EU Treaties because they are entering
into it as MS meeting within the Council (but not acting as the
Council).
"Voting procedure: Consensus (because Member
States are acting independently of the EU)."
The Government's view
9.11 The Minister says that she is satisfied with
the EDF11 Internal Agreement and ready to sign it at the 24 June
Foreign Affairs Council. She notes that the Decision on provisional
application introduces no additional commitments on Member States
and does not allow any EDF11 funds to be committed until ratification
is completed by all Member States. The same approach was, she
says, followed for the transition from EDF9 to EDF10.
9.12 The Minister supports the proposed approach,
so as to ensure that any delays in disbursing EDF11 funds are
minimised. Based on the DFID's Multilateral Aid Review, the Minister
considers the EDF to be a good instrument for aid delivery with
a clear focus on poverty reduction, and therefore sees it as important
to ensure that EDF11 funds are available to be disbursed as soon
as possible after 1 January 2014.
9.13 Finally, the Minister notes that, although the
Commission cannot disburse EDF11 funds until all Member States
have ratified the agreement, she expects that, in order to ensure
some continuity and on-going predictability of aid flows to beneficiary
countries, balances from EDF8 and EDF9 and de-committed funds
from EDF10 will be made available during the period before EDF11
enters into force.
Conclusion
9.14 The proposal is, as the Minister notes, identical
to that followed with EDF 10, and continues to be appropriate
for the reasons she adduces.
9.15 As with all of the process thus far, we are
drawing this latest stage to the attention of the International
Development Committee.
9.16 We now clear the document.
Annex 1c of the Council Decision
18480/11
"ANNEX 1c
"Multiannual financial framework for the period
2014-20
"1. For the purposes set out in this Agreement
and for a period starting on 1 January 2014, the overall amount
of financial assistance available to the ACP States within this
multiannual financial framework shall be EUR 34.718.4 million,
as specified in points 2 and 3.
"2. The sum of EUR 32.218.4 million under the
11th European Development Fund (EDF), shall be made available
from the entry into force of the multiannual financial framework.
It shall be allocated between the cooperation instruments as
follows:
"(a) EUR 27.658.2 million to finance national
and regional indicative programmes.
"This allocation will be used to finance:
- "the national indicative
programmes of individual ACP States ;
- "the regional indicative programmes of support
for regional and interregional cooperation and integration of
Groups of ACP States;
"(b) EUR 3.960.2 million to finance intra-ACP
and inter-regional cooperation with many or all of the ACP States.
This envelope shall include structural support to the CDE and
the CTA, and to the Joint Parliamentary Assembly. It shall also
cover assistance with the operating expenditure of the ACP Secretariat
referred to in points 1 and 2 of Protocol No 1 'on the operating
expenditure of the joint institutions';
" (c) EUR 600 million to finance the Investment
Facility in accordance with the terms and conditions set out in
Annex II 'Terms and conditions of financing') to this Agreement,
under the form of grants for the financing of the interest rate
subsidies and project-related technical assistance provided for
in Articles 1, 2 and 4 of that Annex over the period of the 11th
EDF.
"3. The operations financed under the Investment
Facility, including the corresponding interest rate subsidies,
shall be managed by the European Investment Bank (EIB). An amount
of up to EUR 2.500 million in addition to the 11th EDF shall be
made available by the EIB in the form of loans from own resources
and will be subject to a revision clause at mid term. These resources
shall be granted for the purposes set out in Annex II to this
Agreement, in accordance with the conditions laid down in the
statutes of the EIB and the relevant provisions of the terms and
conditions for investment financing in that Annex. All other financial
resources under this multiannual financial framework shall be
administered by the Commission."
53 See the Annex to this chapter of our Report. Back
54
See headnote: (33530) 18431/11 and (33533) 18480/11: HC 83-iii
(2013-14), chapter 20 (21 May 2013) and HC 83-i (2013-14), chapter
8 (8 May 2013). Back
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