EU financial instruments for external action

In December 2011, the European Commission (EC) published the “Global Europe” Communi­cation and a package of proposals for EU instruments for external action for the period 2014-20. The instruments are set in the context of the recently agreed Multiannual Financial Framework (MFF) 2014-20, notably its heading 4 with resources of €66.3 billion (in current prices), or 6.12% of the total. This is a 3% increase compared to the previous MFF, but 16% less than the EC’s initial proposal.

The legislative package comprises nine geo­graphic and thematic instruments, and a hori­zontal regulation setting common imple­ment­ing rules for six of them:

• Instrument for Pre-accession Assistance (IPA II);
• European Neighbourhood Instrument (ENI);
• Partnership Instrument for cooperation with third countries (PI);
• Development Cooperation Instrument (DCI);
• Instrument for the Promotion of Democracy and Human Rights (EIDHR);
• Instrument for Stability (IfS).

The structure of previous instruments is retained, with some changes: more differenti­ation (assistance given according to a country’s needs, commitments, performance and poten­tial EU impact); concentration of external spending; more flexibility; simplified rules and procedures for programming and deliver­ing assistance; and greater focus on human rights, democracy and good governance.

The main legal bases are Articles 209(1) TFEU (development cooperation programmes) and 212(2) TFEU (economic, financial and technical cooperation with other third countries). Instruments may have additional legal bases.

Agreement on the MFF led to changes in the financial envelopes (see annex) initially allocated by the EC. The new regulations should apply from 1 January 2014.

Common implementing regulation: for the first time a horizontal regulation sets common, simplified rules and procedures for the exter­nal action instruments. EC financing decisions will take the form of action programmes based on multiannual programming documents. In certain situations, individual measures or special measures not included in program­ming documents can be adopted, as well as measures to support implementation. Moreover, the EC may set specific rules for some instruments (e.g. ENI, IPA II). The regulation also sets out the conditions for access to assistance. The new Financial Regulation governs the instruments, and the types of financing may include innovative approaches, some already in use (blending of grants and loans, equity and risk-sharing instruments). The common regulation and each instrument will be reviewed by end-2017.

IPA II: helps countries in the enlargement process to prepare for EU accession. IPA II replaces IPA I (2007-13). Its main objectives are to provide support for political reforms; for economic, social and territorial development; and for alignment with the EU acquis. It aims to be more flexible (dropping differentiation by “candidate” and “potential candidate” status), simpler, more coherent, and conditional on improved governance and country ownership. It also includes an incentive-based approach.

ENI: replaces the European Neighbourhood and Partnership Instrument (ENPI) which addressed the 16 partner countries covered by the European Neighbourhood Policy (ENP), plus Russia. While it retains the structure of the ENPI (bilateral, multi-country and cross-border cooperation (CBC) programmes), the ENI builds on the 2011 review of the ENP, introducing significant changes. These include increased differentiation and an incentive-based approach (“more for more”); modification of geograph­ical scope (ENI no longer covers bilateral assistance to Russia, but it remains eligible for regional and CBC programmes); simplification and reduced time for program­ming; increased coordination between EU and national programmes; and amended provisions on CBC.

PI: a new instrument, replacing the Instrument for cooperation with industrialised and high-income countries. It will be the main instrument for cooperation with middle and upper income countries, including Russia, China, Brazil and India. The PI will be used to implement the international dimension of the Europe 2020 agenda, including cooperation with partners on issues of global concern; to facilitate market access, trade, investment and other business opportunities for EU companies; and to improve the EU’s visibility internationally through public diplomacy.

DCI: its various programmes cover all developing countries, except those eligible for IPA II. The new DCI takes into account the EU’s “Agenda for change” in development policy and focuses primarily on combating poverty. Its structure has: geographic programmes to support bilateral and regional cooperation (not for ENI, IPA II and European Development Fund countries); two thematic programmes (“Global public goods and challenges” and “Civil society organisations and local authorities”); and a new Pan-African programme to support imple­mentation of the Joint Africa–EU Strategy. Countries graduating from bilateral DCI programmes to new partnerships with the EU will remain eligible under the thematic and regional programmes. EU assistance will be directed to those countries most in need and where it can have greatest impact.

EIDHR: its added value comes from providing assistance to improve the situation of human rights and fundamental freedoms in countries where they are at risk, independent of those countries’ authorities. The new EIDHR focuses on the most problematic countries, on more flexibility and swifter response, through grants for human-rights defenders in urgent need of protection and direct grants in countries where calls for proposals are impossible. An EU Human Rights Defenders Mechanism is also created.

IfS: contributes to preventing and responding to crises or global/trans-regional security challenges. The new IfS maintains the key elements of its predecessor, but increases its flexibility (e.g. extending the maximum length of crisis response measures and enabling a second Exceptional Assistance Measure in protracted conflicts).

As co-legislator, the EP put forward changes to the EC proposals, aimed at ensuring clear impact of the instruments and results on the ground; transparency in planning and implementation; a greater role for civil society organisations and local authorities of bene­ficiaries; more conditionality; synergies among instruments and with EU policies, as well as more coordination between the EU, its Member States and other donors; rapid reaction to unforeseen events; and more democratic scrutiny. The Committees responsible (AFET and DEVE) approved the texts agreed in trialogue negotiations with the Council and the EC. Strategic dialogue with the EC will ensure the EP is better involved during implementation and in any substantial revision.