EU EXTERNAL RELATIONS BUDGET: UPDATE AND
OUTLINE PLANS FOR 2006 (11734/05, 5834/06, 5835/06, 5836/06, 5837/06,
6297/06)
Letter from Rt Hon Hilary Benn MP, Secretary
of State, Department for International Development to the Chairman
In your letter to me of 20 October 200[56],
you asked that the Committee be kept generally informed of the
ongoing discussions on the future structure of the external relations
budget. I thought it would be useful to provide an update and
outline our plans for 2006 at the conclusion of the UK Presidency
of the EU. This is a joint letter with the FCO and has been agreed
with HMT.
The overall agreement on the Financial Perspectives
reached at the December Council in Brussels included a Global
Partner (External Actions) budget over the seven years 2007-2013
of €50.1 billion / £32.24 billion (the figure proposed
by the Luxembourg Presidency in June). Although over 15% less
than the Commission's opening 2004 proposal, the `budget will
increase by about 4.3% annually from €6.28 billion / £4.3
billion in 2007 to reach €8.07 billion / £5.53 billion
by 2013. At the same time, Council agreed to establish a 10th
European Development Fund (EDF) to provide assistance to the African,
Caribbean and Pacific countries for six years from 2008. The figure
to be allocated of €22,682 million (£15,544 million)
is separate from, and additional to, the Global Partner budget
figure. The EDF will remain an inter-governmental fund.
Discussions throughout the UK Presidency focused
on the draft regulations for the European Neighbourhood and Partnership
Instrument (ENPI), Pre-Accession Instrument (IPA), the Development
Co-operation and Economic Co-operation Instrument (DCECI) and
the Stability Instrument (SI). Steady progress was made in discussions,
both on the specific language for each regulation and on cross-cutting
issues. The IPA, ENPI and SI are all now fairly well advanced,
but there are in each case some difficult sticking points still
to be resolved, in consultation with the European Parliament.
The UK Presidency presented a redraft of the
DCECI that was well received by all parties. This puts a stronger
emphasis than earlier versions on poverty reduction as the central
aim of the instrument and the use of best development practice.
The UK redraft helped change the European Parliament's earlier
position of rejecting the proposal: the Parliament is now in the
process of introducing amendments to the text.
While it was originally intended that questions
of nuclear safety be included in the Stability Instrument, it
was subsequently decided that they should be covered in a separate
instrument, drawing on the Euratom Treaty as their legal base.
An Instrument for Nuclear Assistance is accordingly under preparation.
I anticipate that the appropriate Regulation will be ready for
adoption at around the same time as the others.
In addition to the new instruments, the Humanitarian
Aid Instrument will continue: we look forward to further discussion
on this under the Austrian Presidency. We have argued against
retaining Macro Financial Assistance as a separate policy instrument
on simplification and rationalisation grounds, since its functions
could be absorbed into the geographical regulations. It seems
though that such an instrument will feature also under the next
Financial Perspective.
A number of issues which apply to the Global
Partner budget heading as a whole remain to be resolved, including
the question of financial provision between the instruments. The
debate on relative shares can only be finalised once the European
Parliament has endorsed the overall budget and the Global Partner
heading budget itself. We also need decisions on the numbers and
relative scope of the instruments. Discussions so far have focused
on the six instrument architecture proposed by the Commission
in early 2004. But it seems fairly clear that there will need
to be some adjustments to reflect the direction of the negotiations
as laid out above; and also, for example, to respect the distinct
nature of Common Foreign and Security Policy arrangements. Our
position (and that of many other Member States) remains that the
simplification and rationalisation of the current budget structure
is integral to a more effective budget structure.
Agreeing an appropriate role for the Parliament
and Council in setting policy priorities for external funding
will be a major challenge in the months to come. This makes it
difficult to predict when any of the Regulations will go to Council.
It is also important that policy commitments entered into during
2005 are fully reflected in the new external Regulations, including
the November 2005 Council Conclusions on the Orientation Debate
and the European Consensus on Development signed by the Council,
the Commission and the European Parliament on December 20th. They
provided considerable clarity on the overarching objective of
EU aid—reducing poverty—and guidance about a rational
allocation of resources of development resources. They also invited
the Commission and the European Investment Bank to investigate
the role of loans and grants in middle income countries.
We will support the Austrian Presidency in their
efforts to finalise the draft regulations for the external actions
instruments, building on the foundations provided by the decisions
taken in Brussels in December last year.
5 February 2006
Letter from the Chairman to Gareth Thomas
MP, Parliamentary Under-Secretary of State, Department for International
Development
Thank you for your Explanatory Memoranda which
Sub-Committee C considered at its meeting on 16 March. The Sub-Committee
agreed to clear the documents from scrutiny. The documents were
cleared, however, on the basis that we share the many concerns
expressed by you in the memoranda and urge you to press for the
further details which you state are necessary for the proper implementation
of these programmes.
We consider that the general themes of the programmes
are sound. In particular we are happy to see the specific attention
being paid to both food security and democracy and human rights,
each of which should inform all the Commission's development assistance
programmes. However, we also consider that all five documents
are poorly written, lacking in detail and incapable of being applied
in any measurable or objective manner. The Commission should give
further consideration to redrafting these communications prior
to their being agreed by the Council. We hope that you will support
this proposal.
We also recognise that these programmes are
an attempt by the Commission to simplify and realign its thematic
programmes in the light of the newly agreed budget lines contained
within the Financial Perspective 2007-2013. However, we fully
agree with you that it is unclear how these programmes will be
implemented in line with the budget, and ask that you write to
inform us of the budget allocations for each programme once they
have been approved. It is imperative that such allocations take
place in an open and transparent manner.
On each of the specific programmes we would
like to add the following additional specific comments:
Investing in people—We consider
that insufficient attention has been paid to women's rights within
these programmes as a whole, and that it should not be simply
one aspect of this programme on human and social development.
In particular, women's rights should be emphasised more strongly
within the programme on democracy and human rights given that
women suffer unduly in those states with poor records on human
rights and governance.
Non-state actors—We agree that
further consideration ought to be given to the Commission's wide
definition of non-state actors (para 11, EM). Support for development
NGOs ought to take priority over support for political foundations,
universities and local authorities.
Environment—We agree with the point
made in your explanatory memorandum that care is needed to ensure
that an integrated approach does not detract from the need to
ensure that geographical support is given to priority environmental
issues reflected in country plans (para 11, EM). We also urge
you to ensure that any EU support for the management of natural
resources takes full account of international guidelines.
Food security—We welcome the focus
of the programme on transition and fragile states, and the necessary
transition from relief to development assistance (para 14, EM).
However, we would like to see these issues being linked to the
establishment of the UN's Peacebuilding Commission (PBC): a guarantee
of food security by the EU in post-crisis situations would be
of great assistance to the work of the PBC.
Democracy and human rights—We agree
that the EU's valuable work in election monitoring should be funded
through a separate budget (para 20, EM) in order that it does
not affect the overall budget allocations between the various
programmes. We are, however, concerned about your proposal for
a contingency reserve to facilitate emerging opportunities and
to deal with emergencies (para 15, EM): we consider that this
would bypass all the usual rules for ensuring that funds are correctly
spent and, at the very least, would need to be closely monitored
and kept under review.
We ask to be kept fully informed on the outcome
of these programmes at the forthcoming discussion at the 10-11
April General Affairs and External Relations Council. Should the
programmes be amended, we ask that you submit the amended versions
along with a commentary on the specific changes made.
20 March 2006
Letter from Rt Hon Hilary Benn MP to the
Chairman
On 16 March 2006, your Committee discussed the
Communication on External Actions through Thematic Programmes
under the Future Financial Perspectives 2007-2013 (FP) and the
five specific thematic Communications as per above. Your Committee
cleared all Communications for scrutiny on the basis that I press
for more clarity on the issues raised in my EM. Similarly, you
asked me to inform you of the budget allocations for each programme
once decided.
There has been some development since I last
wrote. On February 16, Council decided in Coreper to pursue a
line of negotiations with the European Parliament based on including
all current geographic and thematic regulations into the DCECI—the
new Development Instrument. Promoting simplicity and effectiveness
in the management of EC external spend underpinned this decision.
We supported this line.
Following this, the Austrian Presidency prepared
procedural Council Conclusions on the seven specific thematic
Communications plus the global one. These Conclusions simply took
note of the respective Communications and invited the Commission
and Member States to integrate these as appropriate into the new
external action instruments, including the DCECI. The Conclusions
were adopted by the Environment Council on 9 March. A copy of
the Conclusions is attached (not printed).
The Presidency then brought forward proposals
on how to include these regulations into the DCECI. They were
briefly discussed in Council working groups. It is our understanding
that discussions on the Communications as part of the DCECI will
replace any discussions and adoption of the specific thematic
Communications in Council. We plan to raise concerns spelled out
in our respective EMs in the context of these discussions.
The EP Development Committee adopted their report
on the DCECI on March 21. They rejected the approach adopted by
the Council for the thematic regulations. We anticipate that high-level
political negotiations will be needed to move this dossier further.
We will write again once there is more progress.
It is our wish to keep you as informed as possible, but I hope
you share my view that this is a complex process where the outcome
is sometimes difficult to anticipate.
24 April 2006
Letter from Rt Hon Hilary Benn MP to the
Chairman
Following my letters of 5 February and 24 April,
we have set out to provide you with regular updates as regards
to the ongoing discussion on the Development Instrument (DCECI)
of the next EC Financial Perspective (FP) 2007-2013. As you are
well aware, negotiations on this Instrument have been complex
and are still a way from conclusion.
On 3 May, the Committee of Permanent Representatives
(COREPER) decided to present the European Parliament (EP) with
a "package deal" for the external instruments under
the next FP to advance these negotiations. This involved an approval
of the four instruments on which the text has already been agreed—Stability
Instrument, European Neighbourhood and Partnership Instrument
(ENPI), Instrument for Pre-accession Assistance (IPA) and Instrument
for Nuclear Assistance (INA)—together with a Development
Instrument split into four: one instrument for cooperation with
developing countries; one for cooperation with industralised countries;
one instrument for democracy and human rights; and one instrument
regrouping the other thematic programmes. The Development Instrument
would then be based soleley on TEC article 179, the development
article of the Treaty.
This deal was seen as going some way towards
meeting the EP's request to keep separate ll the current 16 regulations,
which would be regrouped under th eDCECI in the Commission's proposal.
We supported this deal as a constructive compromise and way forward.
Despite our support for the principle of reducing the number of
instruments to a minimum, we see sense in creating a new instrument
for managing cooperation with industralised countries, as separate
from cooperation with developing countries, and in raising the
political visibility of democracy and human rights through a further
separate instrument.
On 18 May, however, the European Parliament
voted in Plenary for the "Mitchell report", which effectively
suggests retaining all current regulations plus the DCECI, and
introduced a total of 117 amendments to the Commission's initial
proposal. Formally, this becomes the EP's first reading report,
a copy of which is attached for your information.
Essentially the EP report suggests:
— To retain the current legislative
structure of the EC budget for development spending, involving
a total of 16 regulations plus the DCECI, to safeguard the EP's
current role in setting policies for thematic and geographic programmes;
— A DCECI basedon TEC 179, developing
countries only, all aid classified as ODA and with clear barries
to other external instruments;
— A strong focus on poverty reduction
and the MDGs as the overarching aim for the Instrument, based
on development best practice, with active involvement of civil
society in all stages;
— A greater involvement of the
EP in the management of Community aid programmes, including in
the stages of design, approval, reviews and suspension:
— A call-back mechanism allowing
the EP to object to country/region and thematic strategy papers
and ask for adoption through co-decision;
— Added measures of control against
fraud, irregularities and human rights abuses;
— Sectoral spending targets in
the programmes.
Without doubt, this will take us into the second
reading as Council will not be disposed to endorse some of the
key demands put forward by the EP. While we welcome the EP's wish
to turn this into a true Development Instrument, forcused on development
priorities, developing countries and best practice—in fact
many of the EP's amendments build on the ideas we put forward
during our 2005 EU Presidency—we support the COREPER position
for a rationalised budget structure involving fewer regulations.
Also, we do not support the EP's demands for more involvement
in the management of Community aid, at the same time as Member
States are ready to step back and extend more autonomy to the
Commission.
The next step will be to agree a Council Common
Position on the EP 1st reading report. Ideally, this should be
designed as a compromise text acceptable to both the EP and Council,
thereby allowing for a rapid 2nd reading agreement. To do this,
the Austrian Presidency is holding parallel negotiations with
both parties. We await the outcome of these negotiations but it
is possible that discussions on a Common Position will fall into
the Finnish Presidency.
I will keep you informed of future movements
on this dossier and will forward you a copy of the Council Common
Position when it merges. It is also possible that negotiations
continue over the summer and during Parliamentary recess. We will
discuss with your Clerks on how best to keep you informed during
this period.
26 June 2006
56 Correspondence with Ministers, 45th Report of Session
2005-06, HL Paper 243, p 293. Back
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