Select Committee on European Union Thirty-Fourth Report


APPENDIX 8: PROPOSED NEW FINANCIAL INSTRUMENTS FOR 2007-2013


The overall agreement on the Financial Perspectives reached at the December European Council included a Global Partner (External Actions) budget over the seven years 2007-2013 of €50.1 billion. This will increase annually from €6.28 billion in 2007 to €8.07 billion in 2013.

During 2004 the Commission proposed a simplification of the external relations budget in order to replace over 60 legal instruments under which money can be spent. The new simplified structure would entail having just six different instruments, each related to broad geographical or policy areas:

  • Instrument for Pre-Accession Assistance (IPA)—this will prepare candidate countries for accession to the EU.
  • European Neighbourhood and Partnership Instrument (ENPI)—this will encourage economic integration and political co-operation between the EU and 17 partner countries (those under the ENP and Russia), promote sustainable development and poverty reduction, and address security and stability challenges posed by their geographical proximity to the EU
  • Development Co-operation and Economic Co-operation Instrument (DCECI)—this will cover assistance to all countries not covered by the above two instruments, including both developing countries and countries in transition.
  • Stability Instrument (SI)—this non-geographical instrument will allow the Community to: 1) respond urgently to situations of crisis or instability, and threats to human rights and democracy; 2) address global, trans-border security and stability challenges such as those posed by organised crime and terrorism; 3) safeguard the EU's population against critical technological threats (such as nuclear pollution) and combat the proliferation of weapons of mass destruction; 4) promote international action in support of these general aims (for example by training civilian experts for deployment on EU crisis management missions, or by developing the peace-keeping capacity of other regional and sub-regional organisations); and 5) address other, unforeseen, global challenges to stability and security.
  • Humanitarian Aid Instrument (HAI)—this will provide humanitarian aid, including food aid.
  • Macro-Financial Assistance (MFA)—this will provide guarantees for loans from the EC to third countries to help with extraordinary balance of payments difficulties.

Discussions with the European Parliament concerning these instruments are on-going. The Parliament is concerned that fewer instruments will entail less Parliamentary oversight of spending. The Commission believe this will not be the case.[203]

There are, in addition, negotiations concerning proposals to have a separate instrument for Human Rights and Democracy and to split the DCECI into two separate instruments in order to ensure greater focus on the development needs of poorer countries.

It is expected that the instruments will be finalised and adopted during 2006.


203   International Development Committee, Oral Evidence (2005-2006) EU Development Co-operation and External Relations Policy (HC 745), Q 13. Back


 
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