management by results; 45. Stresses however the need to take due care on the systemic issue of donor coordination, monitoring and evaluation according to a more systemic approach to obtain guarantees of trust funds’ effectiveness;

## Budget support to partner countries

46. Observes that budget support financed by the EDF in 2017 corresponded to EUR 860,2 million of which EUR 703,1 million were new commitments (covering 54 countries and representing 102 budget support contracts); notes that for the OCTs, EDF disbursements in 2017 amounted to EUR 57,7 million (for 11 countries and 15 budget support contracts); notes that in 2017, DG DEVCO has stopped budget support in two ACP countries respectively due to a lack of progress in the implementation of public finance management (PFM) and lack of stability-oriented macroeconomic policy and transparency in the PFM; 47. Calls on the Commission to ensure consistency between provisions of the General Financial Regulation (GFR) under Article 236 and Article 36 of the proposed Financial Regulation applicable to the eleventh EDF with regard to terms and conditions for the use of budget support to be provided to third countries; observes that the proposed eleventh EDF Financial Regulation includes provisions which are not included in the GFR, notably that budget support shall aim at strengthening contractual partnership between Union and ACP States or OCTs in order to support, inter alia, sustainable and inclusive economic growth, and to eradicate poverty, the latter leading to potential difficulties of application of the EDF rules; 48. Invites the Commission to further elaborate on, and clarify, the exact scope and meaning of its margin of flexibility or of interpretation in assessing whether the general eligibility conditions for the making of disbursements to a partner country have been met, with respect to the so called ‘differentiation and dynamic approach to eligibility’; is concerned by the final use of the funds transferred and the lack of traceability when the Union’s funds are merged within the partner country’s budget resources; 49. Believes that the budget support should support specific problem solutions at sectoral level, complemented as needed by the related technical assistance; 50. Remains concerned in relation to the final use of those transferred funds and their possible lack of traceability in the event of weak, unstable and deteriorated public sector financial management; draws attention to the need to support the fight against fraud and corruption in all areas of government covered by the Union’s development strategy; emphasises that the risk of resources being diverted remains high and that it is the areas in which public funds are managed which offer scope for corruption and fraud; 51. Urges the Commission to better define and clearly assess the development outcomes to be achieved in each case and above all to enhance control mechanism concerning recipient State´s conduct in the fields of corruption, respect of human rights, rule of law and democracy; expresses deep concern about the potential use of budget support in countries lacking democratic oversight, either due to the lack of functioning parliamentary democracy or freedoms for civil society and the media, or due to a lack of

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