EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 8.4.2009 
SEC(2009) 444 
COMMISSION STAFF WORKING PAPER 
 
accompanying the 
COMMUNICATION FROM THE CO MMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMI TTEE OF THE REGIONS 
 
Supporting developing countries in coping with the crisis 
 
Where does the EU go from Doha? 
 
What prospects for meeting the EU targets of 2010 and 2015? 
 
Annual progress report 2009 on  financing for development 
  
 
{COM(2009) 160 final} 
{SEC(2009) 442} {SEC(2009) 443} {SEC(2009) 445}
 
 
EN 2   EN TABLE OF CONTENTS 
1. Introduction................................................................................................................ .. 4 
2. The UN Conference at the highest level on the world financial and economic crisis 
and its impact on development..................................................................................... 5 
2.1. The EU priorities......................................................................................................... .6  
2.2. The preparatory process ............................................................................................... 6 3. Mobilising domestic financial resources for development – EU focus on economic 
and financial governance.............................................................................................. 7 
3.1. Better inclusion of tax and customs rela ted matters in the policy dialogue and 
cooperation programmes for improved gove rnance in developing countries.............. 8 
3.2. Closer cooperation under bi lateral tax agreements between EU Member States and 
developing countries .................................................................................................. 10 
3.3. Supporting an enabling international environment.................................................... 10 3.4. Next steps................................................................................................................ ... 11 
4. Mobilising international resources for de velopment: foreign direct investment and 
other private flows...................................................................................................... 13 
4.1. EU trends on mobilising internat ional resources for development............................ 13 
4.1.1. Support for private investment................................................................................... 13 4.1.2. Corporate social responsibility................................................................................... 14 4.1.3. Public procurement – a tool to enhan ce social and environmental standards............ 15 
4.1.4. The way forward ........................................................................................................ 1 5 
4.2. The role of remittances............................................................................................... 16 4.2.1. Remittances: resilient to the global economic crisis? ................................................ 16 4.2.2. Main findings of the survey: Con tinuing progress on implementing the EU 
commitments on remittances...................................................................................... 16 
4.2.3. What needs to be done?.............................................................................................. 18 5. Increasing international financial and technical cooperation for development ......... 18 
5.1. ODA levels are on the increase but by and la rge insufficient to reach agreed EU and 
international targets.................................................................................................... 18 
5.1.1. Global ODA trends .................................................................................................... 18 5.1.2. EU ODA levels in 2008 ............................................................................................. 21 5.1.3 Short-term and medium-term adaption of EU assistance to deve loping countries in 
response to the financial and economic crisis............................................................ 23 
 
EN 3   EN 5.1.4. Prospects of achieving the collective EU targets for 2010 ........................................ 24 
5.1.5 Prospects for Member States' individual targets for 2010 ......................................... 26 5.1.6. Little progress with mu lti-annual ODA timetables to enhance ODA predictability.. 32 
5.1.7. ODA for Africa .......................................................................................................... 32 
5.1.8. ODA for the least developed countries (LDCs)......................................................... 34 5.1.9. Continued need to enha nce ODA reporting capacity................................................. 35 
5.1.10. Outlook................................................................................................................ ....... 35 
5.2. Bridging the finance gap: innova tive sources of financing........................................ 36 
5.2.1. Innovative finance: a timely matter............................................................................ 36 5.2.2. A small number of EU Member States ar e promoting innovative sources of finance
............................................................................................................................... ..... 36 
5.2.3. Actions required for implementing new m echanisms and partnerships allowing an 
increase in financing for development ....................................................................... 38 
6. External debt: Challenges to debt su stainability in de veloping countries.................. 39 
6.1. The implementation of the HIPC initiati ve and preserving debt sustainability......... 39 
6.2. Next steps................................................................................................................ ... 40 
7. systemic issues: Working Together fo r international govern ance and stability ........ 41 
8. Copenhagen and beyond: the challenge to mobilise funding for climate change 
related efforts of developing countries....................................................................... 42 
8.1. Financing related to climat e change and other environmental challenges in the wake 
of the crisis ................................................................................................................. 4 2 
8.2. The follow-up to the EU position for Doha and Poznan:........................................... 45 9. Conclusions................................................................................................................ 4 5 
ABBREVIATIONS.................................................................................................................. 47 
Annex 1: UN Convention against Corruption (Mer ida Convention) - State of signature and 
ratification by the EU (on 15.03.2009) .................................................................................... 50 
Annex 2: The Commission methodology applie d for analysing ODA indications of EU 
Member States:................................................................................................................. ........ 51 
Annex3: Africa – infrastructure priorities................................................................................ 52 Annex 4 – Infrastructure priorities : Union for the Mediterranean ........................................... 53 
 
EN 4   EN 1. INTRODUCTION  
A series of high level events (the UNCTAD XII Conference, the Third High Level Forum on 
Aid Effectiveness, held in Accra, and the two UN High Level Events on the MDG and the 
Special Needs of Africa, held in New York ) made development a key priority on the 
international agenda of 2008, culminating with  the Doha Financing for Development Follow-
up Conference in December.  
The global crisis is having a serious impact  on developing countries. The international 
community has repeatedly underscored that devel opment needs to be an integral part of the 
response to the crisis. This promis e has to be turned into practical  actions; keeping in line with 
the financing for development commitments given at EU and G8 level is a central pillar for this. The focus on development will remain sharp throughout 2009; no international debate on global issues ( e.g. financial stability, economic reco very, global governance architecture, 
climate change. ) can escape from integrating the development dimension into the design of 
solutions. This year's Monterrey report
1 is set against this inte nse international background.  
A strong, united and visible EU position played a key part in making the Doha conference a 
success, producing an explicit action-oriented Declaration. One major success in Doha was 
that, UN member states reconfirmed their aid commitments , including 0.7% of /GNI for 
ODA, and also called for establishing  rolling timetables for scaling up aid. The aid 
effectiveness principles agreed  in Paris and Accra were prominently stressed and support 
was expressed for  exploring  innovative sources of financing . Governance and better 
mobilisation domestic resource were seen as other vital ar eas to develop. A shared 
understanding was expressed that the new gl obal challenges need to be tackled in a 
comprehensive and inclusive fashion.  
This strong position on the part of UN members was made possible by the clear and 
comprehensive commitments given by EU in the common position for the Conference adopted by the General Affairs and External Relations Council   on 11 November. The EU 
needs to honour the commitments  given. The 2008 Monterrey report  follows the structure of 
the 2002 Monterrey Declaration, but also includes  the new subjects decided in Doha. It will 
provide baseline information for monitori ng progress on these a dditional topics.  
The EU reconfirmed, in 2008, its role as the worl d leader in terms of development financing: 
It increased its spendi ng by 8% reaching almost €50 billion, wh ich is 0.40% of EU GNI. This 
is an all-time high in current prices and corresponds to almost €100 spent on aid per EU inhabitant. This aid increase is a commenda ble correction of the downward trend the EU 
registered in 2007; aid disbursements have t hough not yet gone back to the 0.42% ODA/GNI 
level achieved in 2006. Moreover, the prospects for reaching the EU collective commitment to provide 0.56% of its GNI as ODA by 2010 rema in bleak; reaching this target would require 
additional ODA disbursements of around €20 billion by 2010 from current levels. Most of the Member States are increasing th eir ODA, but can reach their indi vidual targets of 0.51% or 
0.17% of GNI only through demonstra ting substantial extra efforts. 
                                                
 
1 Comprising the Communication COM(2009)160 of 08.04.2009 'Supporting developing countries in 
coping with the crisis' and four related Staff Working Papers, this one and Aid for Trade ("2009 Aid for Trade Monitoring Report" - SEC(2009) 442), Aid eff ectiveness ("Aid Effectiveness after Accra – where 
does the EU stand?" - SEC(2009) 443) and on the Millennium Development Goals ("Millennium 
Development Goals – impact of the financial crisis on developing countries" - SEC(2009) 445) 
 
EN 5   EN The EU needs to remain in line with the leve l of ambition and commitments it showed in 
Monterrey and Doha. Implementation of the action-o riented Doha Declaration-the 
culmination of the internationa l high-level events in 2008 and a success at a time of a 
worsening financial and economic crisis must follow closely . A clear common 
understanding emerged in Doha that shared re sponsibility can only work if global governance 
processes and structures are inclusive enough and reflect the global partnership, with the 
voices and interests of the ric h, the emerging and the poorest all taken into account. This 
concern underpinned the decision taken at Doha that the UN s hould hold a conference at the 
highest level on the world financial and economic crisis and its impact on development (at the 
beginning of June 2009). Core concerns of th e Doha Declaration could resurface in this 
context.  
This report is the Commissi on's seventh annual assessment of how Europe has been 
delivering on the commitments made to contribute to the broad international financing for development agenda since Monterrey (2002) and evaluates how Europe has moved from 
rhetoric to reality since the n. The report builds on and assesses  the opinions expressed by the 
27 Member States (EU-27) in their replies to the monitoring questionnaire ("Monterrey 
survey 2009”
2) and to an additional survey of early 2009 that had the ob jective to explore 
what measures Member States' are consid ering in their cooperation programmes and 
instruments to react to the impact of the cris is on developing countries. The results of this 
analysis will inform the EU position in the forthcoming international meetings. Individual "donor profiles" of the Member States and the Commission are being prepared to reflect the 
positions they expressed in the survey.  
The initial and continuing EU commitments on financing for development raise the questions 
of to the volume and sources of financing, the quality of aid, support for mobilising domestic 
financial resources for development, mobilisi ng additional international financial flows and 
trade, creating a development-fr iendly international governance system and dealing with new 
challenges. Building on shared concerns the EU commitments have been deepened and extended and now also cover govern ance with a focus on tax issues  and financial transparency 
and on foreign direct investment and remittances  
Progress on the EU commitments on aid for trad e, Aid effectiveness and on the Millennium 
Development Goals is assessed in th ree separate Staff Working Papers
3. 
2. THE UN CONFERENCE AT THE HIGHEST LEVEL ON THE WORLD FINANCIAL 
AND ECONOMIC CRISIS AND ITS IMPACT ON DEVELOPMENT  
The United Nations will hold, in  June 2009, a conference at th e highest level on the world 
financial and economic crisis and its impact on  development. The decision to organise this 
event was taken at the Doha Financing for Development Follow-up Conference in December 
2008 as stated in paragraph 79 of the Doha Declaration on Financing for Development. 
Following the G20 London summit in April 2009 this  conference will be another mile-stone 
international event this year. The most importa nt meeting of 2009 is, lik ely to, be the United 
Nations Framework Convention on Climate Change in Copenhagen. All these events will – 
                                                 
2 http://ec.europa.eu/development/icenter/repository/EU-progress-on-financing-for-development-and-
MDGsQuestionnaire11-12-2008.pdf  
3 see footnote 1 
 
EN 6   EN once again – illustrate that financing for deve lopment remains a key contribution to tackling 
global challenges. These conferences also offer great opportunities for in clusive global debate 
on the impact of the financial,  economic and environmental cris is and should produce a global 
response to mitigate the negative impact of th e crisis on development and particularly the 
most vulnerable developing count ries with limite d resilience  
The European Union should engage actively an d constructively in the UN Conference and the 
preparatory process. 
2.1. The EU priorities 
Numerous international conferences and events  in 2008 - On Financing for Development in 
Doha, Aid Effectiveness in Accra, MDGs and Africa in New York and Climate Change in 
Poznan – produced important decisions and co mmitments to achieve the global development 
goals, including the MDGs, to meet aid targets, to make aid more effective and to carry out 
inclusive reforms of global governance. The European Union's strong united stance, 
leadership and determination were necessary in order to secure these significant successes in 
2008. The same united EU resolve is needed even  more now to face the global financial and 
economic crisis. 
The Commission considers that the EU's positio ns for the UN Conference should be based on 
the global partnership, which is the foundation fo r all EU development efforts. This means 
that all partners, rich, emer ging and poor are expected to contribute to the decisions, 
commitments and actions needed to tackle the impact of the crisis on development. 
As regards the substance of the EU contributio n to and priorities for the UN Conference, the 
Communication "Supporting developi ng countries in coping with the crisis", accompanied by 
this and other Staff Working Papers, puts forw ard concrete proposals for the EU to take 
forward in the various intern ational fora, including in th e UN . These proposals and the 
ensuing Council Conclusions should form the co re of the EU input to  the UN Conference and 
should focus on: 
• honouring aid commitments;  
• leveraging other means of providing assistance and s mobilising resources  
• taking and facilitating c ounter-cyclical actions;  
• improving aid effectiveness;  
• cushioning the social impact, protecting th e most vulnerable a nd supporting the real 
economy; 
• making a "governance pact" wi th developing countries; 
• improving openness, efficiency and inclusiv eness of global governance systems. 
2.2. The preparatory process 
At the time of writing, the consultations on the arrangements for the UN Conference were still 
in progress in the UN General Assembly. It s eems likely that the Conf erence will take place 
from 1to3 June 2009 in New York. The UN Gene ral Assembly consultations/negotiations on 
 
EN 7   EN the outcome are expected to star t in early April with a view to adopting a political declaration 
during the Conference itself.  
3. MOBILISING DOMESTIC FINANCIAL RESOURCES FOR DEVELOPMENT – EU FOCUS ON 
ECONOMIC AND FINANCIAL GOVERNANCE  
The Doha Declaration reaffirmed that each co untry bears prime responsibility for its own 
development and underscored the consequent requirements relating to democratic governance, respect of human rights and rule of law. In the field of economic governance, it 
one a particular EU priority was to tackle  taxation, where there is potential for further 
mobilisation of domestic resour ces. The current financial and economic crisis underscores the 
importance of raising domestic resources, wh ich will - in the long-term - provide more 
predictable, secure and sustainable sources for development and enable poor countries to 
grow out – over time - of the aid dependenc y. The Doha Declaration there are strong 
commitments on  tax reform, the improvement of public financial management and 
combating tax evasion leading to more efficient tax coll ection and broadening the tax base 
with an overall view of making tax systems more  pro-poor. Underscoring that each country is 
responsible for its tax system, th e Declaration stresses the need to support natio nal efforts in 
these areas by stepping up technical assistance and enhancing international cooperation and 
participation in addressing international tax ma tters. The Declaration also meets related EU 
concerns with strong messages on battling corruption, capital flight and on enhancing 
international tax cooperation . 
The deepening financial and economic crisis ha s revealed the vulnerability of advanced, 
emerging and developing economies in a globalised world. Tax havens
4 and under regulated 
international financial centres,  both in developed and devel oping countries, which do not 
operate according to the principles of transp arency and information exchange, have come 
under the enhanced scrutiny5. The assets supposed to be hos ted in the world's tax havens 
exceed by a wide margin the annual globa l flows of ODA to developing countries6, and their 
origin is often linked to capital flight, m oney laundering as well as tax fraud and tax 
avoidance. Tax havens deprive ot her countries of reve nues urgently required to foster social 
development and other policy objectives, while in vulnerable economies, which have turned 
themselves into tax havens, poor pockets of th e population persist and ha ve little or no gain 
nothing from the off shore status of their country. 
In a global economy, the EU and developing count ries have a common interest in building 
sustainable tax systems that interoperate sm oothly notably in order to mobilize domestic 
financial resources for development. In this  respect namely good govern ance in the tax area 
(including through transparency, exchange of in formation and fair tax competition,) has an 
                                                 
4 As defined in the 1998 OECD report "Harmful tax competition: an emerging global issue". The OECD 
lists four key factors to determine whether a jurisdiction is a tax haven – i) the jurisdiction imposes no 
or only nominal taxes; ii) there is a lack of transp arency; iii) there are laws or administrative practices 
that prevent the effective exchange of information for tax purposes with other governments on 
taxpayers benefiting from the no or nominal taxation; iv) there is an absence of a requirement that the 
activity be substantial. Certain jurisdictions which had not yet made commitmen ts to transparency and 
effective exchange of information have been identified by the OECD's Committee on Fiscal Affairs as 
uncooperative (Andorra, Liechtenstein, Monaco). This could change in view of their recent commitments 
5 Cf. Outcome of the London G20 Summit in April 2009  
6 OECD estimates range from US$5 to 7 trillion 
 
EN 8   EN important role to play. For developing countries, good govern ance in the tax area could 
contribute to balancing the need to stimul ate growth with generation of the revenues 
necessary to implement policies to eradi cate poverty. For developed countries, it will 
contribute to the sustainability of their tax systems, thus creating room for manoeuvre for 
providing development assistance. 
Against this background the EU, in its common  position for the Doha Conference, has called 
for national and interna tional action to fight corruption, ta x fraud and illicit flows and has 
itself taken concrete commitments, expressed in the EU Guidelines for the Doha Conference7. 
In line with those commitments this report refl ects the views expressed by EU Member States 
in return to the surv ey and takes account of the current  thinking within the Commission on 
how to promote good governance in tax matters. 
3.1. Better inclusion of tax and customs relat ed matters in the policy dialogue and 
cooperation programmes for improved governance in developing countries 
24 EU Member States and the European Comm ission provide active s upport to developing 
countries' customs, judiciary and tax administ rations in one or another form. Support is 
namely provided through 
• technical assistance programmes in countri es covered by the European Neighbourhood 
Policy (ENP) and a number of ACP countries; 
• programmes for the reform and modernization of customs administrations focusing, in 
particular, on the application of customs le gislation and on traini ng regarding selected 
aspects, such as rules of origin, valuati on, classification, securit y, Intellectual Property 
Rights, enforcement etc;  
• bilateral cooperation with deve loping countries or their regi onal organisations (different 
formats, e.g. technical assistance,  study programmes, budget support); 
• financial contributions to activities of inte rnational organisations, e.g. the World Bank 
(WB)/ International Finance Corporation (IFC), United Nations Office on Drugs and 
Crimes (UNODC), United Nations Democr acy Fund (UNDEF) and the United Nations 
Development Programme (UNDP); 
• cooperation with interna tional organisations, such as the In ternational Centre for Tropical 
Agriculture (Centro International de Agricult ural tropical, CIAT), OECD, Inter-American 
Development Bank (IDB), the International Development Law Organisation (IDLO) and 
the World Customs Organisation (WCO), that has developed the Framework of Standards 
to secure and facilitate global trade.. More over Member States refer to support they 
provide through cooperation with civil society organisations su ch as the Association of 
European Parliamentarians for Africa (A WEPA) or through the Investment Climate 
Facility for Africa (ICF); 
At Commission level the governance policy dialogue  with developing c ountries benefitting 
from support under the European Neighbourhood Policy (ENP) and with ACP countries is 
underpinned by financial incentives for governance reforms, including in the area of 
                                                 
7 Adopted by the GAERC on 11 November 2008 - Guidel ines for EU participation in the International 
Conference on Financing for Development (D oha, 29 November - 2 December 2008) 
 
EN 9   EN public finance management and taxation  (Governance Facility for ENP countries to 
support implementation of national Action Plans under the overall Partnership and 
Cooperation or Association Agreements or ; the governance incentive tranche for ACP 
countries with Governance Action Plans). 
Economic and financial statistics  in developing countries provide primary tools for 
economic governance and for formulating appropriate  policies, especially in response to the 
global crisis. Endemic tax evasio n is closely linked with statis tical misreporting and thus mis-
measurement.  
For most (21) of the EU Member  States (21) the commitments on  the part of partner countries 
to general good governance principles is one crit erion for aid allocation, but there has been, 
until recently, no special focus on good governance in the tax area. The financial crisis has 
sharpened the awareness of the importance of good governance especially in the tax area and 
triggered new initiatives reflecting a change of  approach, such as the strong messages from 
the G8 and the G20 , most recently at the London Summit of 2 April 20098 or the French-
Germany initiative on uncooperati ve jurisdictions in tax matters  launched in October 
2008. DE followed this initiative up with the proposal to create an International Tax 
Compact (ITC) , as announced at Doha. The declared ai m of the ITC is to contribute to the 
fight against tax evasion and a busive tax avoidance a major caus e of loss of domestic revenue 
in developing countries. The ITC should promot e, on the international and domestic levels, 
tax systems make developing countries more  effective at fighting tax evasion and 
inappropriate tax practices in order to achieve  national and international development goals. 
Strengthening the ownership, voice and participa tion of developing countries in international 
tax fora, raising confidence in tax systems,  promoting domestic accountability and state 
building are among the key objectives that the ITC will attempts to promote in the context of 
international development.  
Sound, transparent and reliable customs systems  contribute to incr easing domestic public 
revenues, reducing evasion and smuggling and f acilitating access to international markets. 
Cooperation amongst customs administrations a nd between customs authorities and business 
or other government agencies must be furthe r developed. Customs administrations need to 
ensure that they have the capac ity and skills perform all custom s controls most efficiently and 
effectively. Capacity building for customs ad ministrations promoting regulatory compliance 
to facilitate legitimate trade and increase participation in international supp ly chains should be 
provided, for instance under the Columbus Program me of the WCO. Furthermore, the fight 
against corruption and the prot ection of Intellectual Property Rights remain important tasks 
that should be enhanced over th e years to come. In this contex t revised Arusha Declaration of 
the WCO (June 2003) will remain the reference document for all Customs administrations. The comments made by the Member States in response to the survey show that the WCO 
Framework of Standards to secure and facili tate global trade could be considered the 
appropriate international instru ment for stronger information sharing and for risk management 
and detection of fraud and other threats.  
With a view to sustaining lasting capacity building for customs administrations around the 
world additional standards for combating counter feiting and other forms of  illicit activity are 
required. This will further prom ote a strong partnershi p and tight links between developed and 
                                                
 
8 G20 London Summit Leaders' Statement of 02.04.2009, §15 
 
EN 10   EN developing countries and their eco nomies, a partnership that is also important to foster an 
attitude of mutual and active cooperation.  
3.2. Closer cooperation under bilateral tax agreements between EU Member States 
and developing countries 
However, a number of Member States have concluded or started negotiating Double Tax 
Conventions  (DTC) and Tax Information Exchange Agreements  (TIEAs) with developing 
countries. These Member States also state that the agreements that they have concluded or 
started negotiating are in line with the principles of good gove rnance in the tax area. Other 
Member States indicated that they have not  entered into negotiati ons of new or into 
renegotiations of existing bilateral tax agreements with developing countries. 
Agreements recently concluded by EU Me mber States with developing countries: 
Bilateral double taxation conventions : BE (with Moldova), CY (with Moldova and 
Qatar), CZ (with Ethiopia, Armenia and Syria), NL (with Uganda, Ghana and South 
Africa), PT (with Guinea Bissau), RO  (with India), and IE (with Vietnam). 
Developing countries currently involved  in negotiations on double taxation 
conventions and of tax information exch ange agreements with EU Member States :  
Algeria, Azerbaijan, Barbados, Bosnia and Herzegovina, Botswana, Brazil, China, 
Costa Rica, Cuba, the Democratic Republic  of Congo, Egypt, Ethiopia Georgia, 
Ghana, India, Indonesia, Iran, Kenya, Kyrg yz Republic, Libya, Mexico, Moldova, 
Mongolia, Morocco, Oman, Pakistan, Peru , South Africa, Sudan, Tajikistan, 
Tanzania, Tunisia, Turkey, Turkmenistan, Ukraine and Vietnam. 
The OECD provides continuously updated information on this type of agreements 
concluded by EU Member States wi th developing and developed countries9. 
3.3. Supporting an enabling international environment 
Creating an international envir onment that is conducive to th e fight against corruption, tax 
evasion and illegal financial fl ows requires determined nationa l and international action. The 
EU has identified several key conventions and in itiatives, where progress is necessary and has 
given firm commitments to inte rnational initiatives to prevent money laundering, financing of 
terrorism and proliferation, intern ational co-operation and on the repatriation of stolen assets, 
to promote the principles of transparency and accountability over natu ral resource revenue, 
either directly or under the United Nations  (Merida) Convention against Corruption.  
The Commission has conducted an initial assessment  of the state of play and will continue to 
monitor progress in the future on: 
• The UN (Merida) Convention against Corruption), which entered into force in 
December 2005: So far 22 EU countries  have ratified the Convention. The EC acceded to 
the Convention in November 2008. Estonia , the only country that ha s not yet signed, plans 
ratification in 2009. Ireland  in the process of adjusting its domestic legal framework, 
whereas Germany  has not yet initiated the necessary adjustment of domestic law, a 
                                                 
9 http://www.oecd.org/topic/0,3373,en_2649_33767_1_1_1_1_37427,00.html  
 
EN 11   EN precondition for ratification. The Czech Republic  and Italy are the other Member States 
that have yet to ratify the Merida Conventi on, it would be best to  do so before 2010, to 
keep to the commitment given prior to Doha10 (see annex 1  for an overview of the state of 
ratification of the Merida Convention). 
• The OECD Convention on Combating Bribery of Foreign Officials in International 
Business Transactions:  Seven  EU Member States are not yet in a position to access to the 
Convention, because they must first be a pa rty to the OECD Working Group on Bribery in 
International Business Transactions. 
• International cooperation on repatriation of  stolen assets, in  particular the Stolen Assets 
Recovery Initiative  (STAR): While several Member States have expressed interest in the 
initiative and are committed to considering s upport in the future, to  date only seven have 
reported that they support the initiativ e (CY, EL, ES, FR, IT, PL and UK). 
• The situation is similar with the Extractive Industries Transparency Initiative  (EITI), 
which currently has the support of eight MS (B E, EL, ES, FI, FR, IT, SE and UK) and the 
EC. Transparent management of natural reso urces is essential if revenues earned from 
them are to contribute to national development. The EITI and other international initiatives, such as the Kimberley Process,  the Forest Law Enforcement, Governance and 
Trade (FLEGT) Action Plan a nd the Action Plan to Fight Illegal Logging should be 
strengthened. 
Extractive Industries Transparency Initiative (EITI) 
Good governance and transparency in extrac tive industries in resource-rich 
developing countries can substantially incr ease domestic revenues and as a result 
foster growth and reduce poverty, especially in Africa. The EITI is a coalition of 
governments, companies, civil society, inves tors and international organizations that 
aims to promote transparency and accountab ility in the extrac tive industries, by 
supporting the verification and full publication of company payments and 
government revenues from oil, gas and mining. In 2007 the EU endorsed the EITI 
politically in the statements at the 9th EU-Africa Summit. 
As part of the "Thematic Programme for Environment and Sustainable Management 
of Natural Resources including Energy" (ENTRP) in 2007 the European Commission 
committed € 0.53 million to the EITI via th e World Bank Multi-Donor Trust Fund 
(MDTF).  
3.4. Next steps 
In follow-up to the GAERC Conclusions of  November 2008 and the Doha Conference on 
financing for development: 
• It will be important to assess progress, in th e context of the forthcoming mid-term review 
of the EC external cooperati on instruments (including the 10th EDF) among others, in the 
actual implementation of the commitments made  in the area of governance, including in 
the area of taxation, and to consider a reallocation of  funds to countries that are 
                                                 
10 Council Conclusions GAERC 11.11.2008 (EU Guidelines for Doha) 
 
EN 12   EN satisfactorily implementing commitments they  have taken on governance and, conversely 
consider cancellation of funds earmarked from  countries that did not implement their 
commitments. There is also a need that Me mber States adopt a similar, coordinated 
approach for their national cooperation programmes. 
• It is essential to promote and strengthen te chnical assistance to de veloping countries in 
order 
• to improve capacities in the area of economic and financial statistics, linked to tax 
and customs reform measures; 
• to improve the soundness and effectivene ss of their tax and customs systems and 
• to support efforts of the developing countries in meeting international 
commitments they have taken in tax and customs cooperation matters, 
while ensuring effective donor coordination at  relevant levels for maximum synergy. 
• Practical aspectis of customs cooperat ion and good governance in tax matters should 
become an integral part of Member States ' policy dialogue with developing countries. ; 
• Specific provisions related to  good governance in the tax ar ea should be included in all 
relevant EC agreements with de veloping countries, in line w ith the Council Conclusions of 
May 200811. Such provisions can provide a framewor k for future bilateral tax cooperation 
between the Member States and developing co untries; EU Member States and developing 
countries to should enhance tax coopera tion between themselves, among others by 
establishing a wide network of tax informa tion exchange agreements with developing 
countries and, if appropriate, through  bilateral double tax conventions; 
• Coordinated action by the Member States is required, as already outlined in the 
Commission Communication on the application of anti-abuse m easures in the area of direct 
taxation12; 
• Member States that have not yet done so, n eed to accelerate the ratification of the United 
Nations Convention against Corruption (Merida) to ensure adherence of the EU as a whole 
before 2010; 
• Strengthened support to spec ific initiativ es aiming at improved governance and 
transparency in the extractive sector , namely to the EITI, is important; 
• Member States need to expand their support to STAR and other relevant initiatives such as 
the International Tax Compact, aiming to incr ease domestic tax revenues in developing 
countries. 
                                                 
11 ECOFIN Council of 14 May 2008 
12 COM(2007) 785) 10.12.2007 
 
EN 13   EN 4. MOBILISING INTERNATIONAL RESOURCES FOR DEVELOPMENT : FOREIGN DIRECT 
INVESTMENT AND OTHER PRIVATE FLOWS  
The private sector can play a key role in  achieving economic grow th and development. 
Private international capital flows exceed aid flows by a great margin and are vital 
complements additions to national and internationa l development efforts, as they contribute to 
competitiveness, creating jobs and transferring, knowledge and technology. 
Promotion of sustainable international in vestment flows is a central challenge . On the 
one hand, this requires greater support for priv ate investment by both international institutions 
and source countries' governments, by providing sp ecific development-oriented financial tools 
such as lending facilities and risk guarantees . On the other, there is a need for private 
stakeholders to engage actively in developmen t processes, taking into account the social and 
environmental dimensions of their activities. 
Remittances are another sizeable fina ncial flow to developing countrie s and a significant 
source of income, going directly to private hous eholds. For some countries, remittances flows 
are far more significant than ODA. 
The next two sections discuss measures to  promote sustainable international private 
investment and remittances flows implemented in the EU by both public authorities and the 
private sector. 
4.1. EU trends on mobilising international resources for development 
4.1.1. Support for private investment 
There is general agreement on the importanc e of private interna tional capital flows 
for development. However, trends establishm ent and use of specific financial tools to 
support private investment in developing count ries are rather mixe d. Almost half the 
Member States have specific tools, mostly  in the form of investment guarantees, 
dedicated funds, preferential loans, and ve nture capital. Specific financial tools for 
small and medium-sized enterprises (SMEs)  have been developed both by European 
institutions (the European  Investment Fund – EIF) and by a number of Member 
States. Some Member States also have  special programmes to promote of 
microfinance. 
In a number of EU countri es specific tools and projects are run by dedicated 
institutions, such as national developmen t agencies and national development banks. 
At European level, the European Bank for Reconstruction an d Development (EBRD) 
and the European Investment Bank (EIB) are supporting infrastructure, private 
investments and the overall business climate in developing countries. 
Any comprehensive assessment of progress made  in this area, should also take into 
account that the lack of speci fic financial tools in a number of Member States should 
not be interpreted as lack of support for private investment in developing countries. 
This objective can be pursued us ing standard financial tools. 
Several Member States did not specify an y target countries. However, Africa 
emerges as the main overall target re gion, followed by Latin America and the 
Caribbean. There is also strong interest in supporting private investment in the major 
emerging economies - notably China, India, and Russia. 
 
EN 14   EN 4.1.2. Corporate social responsibility 
A large majority of Member States (19) are actively promoting adoption and 
implementation of corporate social respons ibility (CSR) principl es and standards. 
Most Member States expressed their strong commitment to multilateral 
initiatives , such as: 
• the OECD Guidelines for Multinational Enterprises , a set of voluntary 
principles covering a broad range of issues in business ethics, including 
employment and industrial relations, the environment, information disclosure, competition, financing, corruption, taxation, science/technology, and the need to encourage suppliers and sub-c ontractors also to comply. 
• The UN Global Compact , a voluntary corporate ci tizenship initiative for 
companies committed to, supporting and enacting a set of ten core values in the 
areas of human rights, labour, the environment and anti-corruption. 
• the International Labour Organisation (ILO) conventions and recommendations 
on labour standards. 
• Austria and the UK also stressed  their involvement drafting the ISO standard on 
social responsibility (ISO 26000) , which aims at offeri ng guidance on socially 
responsible behaviour to both publ ic and private organizations. 
• Specific initiatives undertaken by Member States include: 
– public information and awareness-raising  by means of campaigns, conferences, 
training, specific educatio n programmes, direct i nvolvement of economic 
missions etc; 
– public private partnerships programmes; 
– dialogue with stake-holders , with different degrees of institutionalisation 
(consultations, coordination mechanisms, committees); 
– support for initiatives le d by the private sector; 
– inclusion of CSR among the essential criteria for access to public 
funding/specific financial tools . 
The attitude of companies to CSR principl es varies across countries. Some Member 
States (AT, IT, PT, and UK) highlighted autonomous CSR-related activities launched 
by the private sector, such as adoption of  codes of conduct, establishment of CSR 
platforms, training activities, and awaren ess rising campaigns. Other (PL and LV) 
stated that private companies were still showing very limited interest in CSR. The 
G20 Summit of London underscored the importance of corporate social 
responsibility of all firms
13. 
                                                 
13 G20 London Summit Leaders' Statement of 02.04.2009, §15 
 
EN 15   EN 4.1.3. Public procurement – a tool to enha nce social and environmental standards 
In the EU public procurement is subject to a series of rules, which lay down 
transparent open procedures and ensure fa ir conditions of competition for suppliers. 
Directives 2004/17/EC and 2004/ 18/EC set this public procurement framework in the 
EU, the objective of which is to ensure be st value for taxpayers' money. Under this 
Community legislative package  there are a number of references to the inclusion 
of environmental and social criteria in  public purchasing, which are considered 
secondary objectives of this legislation . The EC public procurement Directives 
include clauses which give publ ic contracting authorities the possibility to address 
environment/social objectives  by allowing the inclusion of  environmental and social 
criteria at all the stages of the proc urement procedure (technical specifications, 
selection and ward, contract performance), provided that the are linked to the subject 
matter of the contract and are objective, tr ansparent and non-discriminatory in terms 
of the fundamental principles of the EC Tr eaty. Most Member States report that their  
national laws on public procurement (20 Member States) include social and 
environmental clauses . In some EU countries the EC  Directives have triggered a 
reform of the legislation. 
Several Member States provided neither any detail of the specific requirements 
included in their public procurement regulati ons nor information on the stages of the 
procurement procedure to which such requirements apply. It seems, however, that various approaches are taken , ranging from the possibili ty for the contracting 
authorities to set social and environmental requirements for the performance of a contract (BE, DE, ES, PT, SI) to the possibi lity of dissolving a c ontract if the winner 
of the tender is found not to comp ly with the standards set (FI). 
In some Member States, specific rules a pply to tender procedures managed by 
national development agencies , making compliance with of social and 
environmental conditions a mandatory obligat ion (AT, FR). Also, an environmental 
impact assessment is often required as pa rt of the documentation for development 
projects (ES, LT, and RO). 
4.1.4. The way forward 
• Promotion of sustainable private capita l flows is an important focus for the 
European Union. Interest seems to be increasing for enhancing the development dimension of private companies' activities. 
• Continued efforts are needed to promote mobilisation of international private 
resources for development, notably : 
– develop specific financial tools in ev ery EU Member States in order to 
make it easier private capital flows to contribute to economic growth 
and development; 
– raise the awareness of both private companies and public  opinion in the 
field of CSR, and ensure that all stakeholders engage in an active 
dialogue; 
 
EN 16   EN – sharpen the specific focus on the social and environmental dimension in 
the legislation on ODA public procurement. 
4.2. The role of remittances 
4.2.1. Remittances: resilient to the global economic crisis? 
According to the latest estimations of  the World Bank, remittances flows to 
developing countries reached $305 billi on in 2008 after severa l years of strong 
growth. Whereas the impact of the crisis  on remittances flows cannot yet be fully 
assessed remittances  are expected to shrink in 2009 , although they are considered 
being more resilient than other pr ivate or official financial flows14. There is a risk 
that, if the global economic downturn turns out  to be deeper or longer than currently 
expected and an increasing number of migrants become unemployed, remittances might fall more substantially
15. 
Remittances flows from the EU to devel oping countries have followed the general 
trend of an increase of 60% since 2004, and they are estimated to have amounted to 
about €25 billion in 2008.16. More than 40% of this amount has been flowing to 
Africa, the main recipients of EU origin ated remittances flows are Morocco, Turkey, 
Nigeria and Ecuador. In the co ntext of the financial crisis  the EU's commitments on 
remittances are even more relevant.  
4.2.2. Main findings of the survey: Conti nuing progress on implementing the EU 
commitments on remittances 
The higher awareness in recent years of th e importance of remittances and various 
international initiatives are gradually b ecoming visible in the form of tangible 
measures. Some of the main initiatives were the guidelines for the compilation of 
data on remittances issued by the "Luxembourg Group" , the "General 
Principles for International Remittances Services"  and the recent G8 initiative for 
a "Global Remittances Working Group"  coordinated by the World Bank. 
Regarding the three main areas covere d by of EU commitments on remittances 
(ensuring more reliable da ta on remittances, favouring cheaper, faster and more 
secure flows of remittances and, stimulati ng the development impact of remittances 
on development) Member States and EC contributions to the survey can be 
summarised as follows: 
(1) Improving data on remittances 
• In addition to bank transfers, Member  States are increasingly integrating 
remittances transfers by money transfers operators (MTOs) in their balance of payments statistics and progressively a dopting the best practices recommended by 
                                                
 
14 http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-
1110315015165/MD_Brief8.pdf ; RATHA Dilip et al., “Outlook for remittance flows 2008-2010”, 
WORLD BANK, 2008 
15 SEC(2009)445 of 08.04.2009 Millennium Development Goals ("Millennium Development Goals – 
impact of the financial crisis on developing countries" chapter 3.2.2 
16 The estimation is based on the estimation of remittances flows from the EU in 2004 as provided by 
Fundacion de Estudios de Economia Aplicada, 2007, and the latest World Bank estimate on remittances 
flows in 2008. 
 
EN 17   EN the Luxemburg Group. Household surveys and targeted studies are the main tool 
used to obtain better estima tes of informal flows. 
(2) Favouring cheaper, faster and more secure remittances flows 
• Most EU Member States made progressed in recent years on re ducing the cost and 
improving the safety of remittances. In particular the five Member States, which 
account for most remittances from the EU  to developing countries, i.e. Germany, 
France, Spain, the United Kingdom and Ital y, have been progressing on all these 
issues. 
• Member States generally share a common anal ysis of the nature of the drivers of 
financial exclusion for migrants. The l ack of transparency and of financial 
products suitable for migrants needs, th e insufficient competit ion on a number of 
remittances corridors and the unattractiv e regulatory and business environment in 
countries of destination explai n the high transaction costs. 
• Substantial progress has been achieve d in the form of adoption of the Payment 
Services Directive (PSD)  in November 2007, which lays  the legal foundation for 
an EU-wide single market for payments . "Payment institutions", i.e. money 
transfer operators, are now recognised as a separate entity and subject to specific 
authorisation. They have to comply with  appropriate regulatory requirements 
harmonised throughout the EU. The Directiv e requires payment se rvices providers 
to make charges, including exchange ra tes, and other cond itions such as the 
transfer time and the charge to the reci pient fully transparent to customers. 
However, the PSD will apply only to paym ents made within the EU and will not 
therefore cover international remittances. Yet, remittances costs could be 
lowered further if money transfer operators with global reach  (such as 
Western Union or Money Gram) were to extend most of the PSD requirements 
to extra-EU transfers , something that they are envi saging in order to avoid the 
operational problems and extra costs asso ciated with running different systems 
and practices for the same activity. A group of MS is already planning to apply 
most of the requirements to some extra-EU transfers. The Directive will be implemented throughout the EU by November 2009. 
• Member States confirmed that they are applying international and EU rules on 
anti-money laundering and combating the financing of terrorism ("AML-
CFT")  while aiming to avoid unnecessary administrative burdens and costs on 
remittances. 
• Several initiatives have been taken to ma ke the private banking sector more aware 
of the specific needs of migrants to whom  products should be better tailored. A 
number of Member States have  supported the construction of websites  making it 
possible to compare  the costs of the various operators  and, in this way, fostering 
competition and reducing costs.
17  
                                                 
17 Examples of such websites are: www.sendmoneyhome.org  (UK), www.geldtransfair.de  (Germany), 
www.envoidargent.fr  (France), www.geldnaarhuis.nl  (Netherlands). Italy is  currently preparing a 
similar project. 
 
EN 18   EN (3) Enhancing the impact of remittan ces from the EU on development 
• A group of EU Member States a nd the Commission are implementing 
programmes in partner countries with the aim of developing the financial sector 
(e.g. microfinance, technical assistance on financial sector regulation and 
supervision) and improving financial literacy in order to familiarise households receiving remittances with banking services. If some of the remittances are saved, banks can build up their role as interm ediaries turning savings into productive 
investment with a positive impact on development. 
• Other initiatives, for example in Belgium,  are currently exploring development of 
remittances transfers via cell phones  which would lower costs substantially and 
improve accessibility, given the proportion of cell phone-owners in developing countries. Others, like France, favour the de velopment of bank se rvices especially 
for migrants (creation of specific agencies, insuran ce products, etc.).  
• Several Member States and the Commissi on are supporting developing countries 
in establishing a policy framework more c onducive to remittances. With the aid of 
its development cooperation (whether undert aken bilaterally or by the European 
Community), the EU is supporting cr eation of a more favourable business 
environment in developing countries. A numb er of targeted initi atives have been 
set up in that framework, such as EU support for the African Remittances 
Institute  under the leadership of the African Union and in collaboration with the 
World Bank (WB). The WB will provide, among other things, policy advice and 
training to African central banks and governments.  
4.2.3. What needs to be done? 
A significant number of initiatives ar e being undertaken by the EU, which will 
continue to focus on implementing its current commitments. Specific attention should also be paid to the following issues: 
• supporting new technology-ba sed transfers (via cell phones or Internet) by 
targeted projects; 
• extend the requirements of the Payment Se rvice Directive to extra-EU transfers 
when the time comes for revi sion of the Directive in 2011; 
• coordinate work better on specific remittances corridors where flows from several 
Member States are of particular importance. 
5. I
NCREASING INTERNATIONAL FINANCIAL AND TECHNICAL COOPERATION FOR 
DEVELOPMENT  
5.1. ODA levels are on the increase but by and large insufficient to reach agreed EU 
and international targets 
5.1.1. Global ODA trends 
Global ODA levels increased stead ily between 2000 and 2005. After the 
disappointing drop in 2006 and 2007 as a consequence of th e end of the debt relief 
 
EN 19   EN spike, a positive trend was restored in 2008 , with global development spending 
increasing by around 10% to an historical  high of US$ almost 120 billion (€84 
billion). This increase falls short , however, of creating the dynamics required for 
reaching the international ODA commitments , including those given by the G8 in 
Gleneagles. Out of the additional US$50 billio n per year promised to be available 
annually as from 2010, US$20 billion remain to be  delivered. In light of the crisis the 
G20 Summit of London reaffirmed the commitment to achieving ODA pledges, including commitments on Aid forTrade , debt relief and the Gleneagles 
commitments, especially to sub-Saharan Africa
18. 
In 2008 , as in previous years, most of the global ODA increase came from the EU , 
which provided 60% of the aid financing to the developing world coming from the 
DAC members. The same is forecast for the years ahead: the EU is set to continue shouldering the lion share of the global sca ling up of aid, i.e. 76% of the forecast 
ODA increases by 2010 from 2008 levels. By  that year EU ODA could represent 
62% of the aid mobilised by all DAC donors. 
Figure: Aid flows of the EU and non- European G7 countries 2000 – 2010 (in € 
million constant 2006) 
Global aid flows 2000 – 2010 (in € million current prices )
01000020000300004000050000600007000080000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010€ millionEU27
Canada
Japan
US
* Data linearly approximated based on OECD 2010 aid simulation Source: European Commission calculations on OECD/ DAC data
 
Source: European Commission calculations on OECD/ DAC data. 
In view of moving to a more balanced international burden sharing  the ambitious 
plan of the new US administration to double the nation's ODA from $25 billion to 
$50 billion is a welcome contribution to  the global effort. The 2010 budget outline 
puts the US on the path to doing so. The Obama campaign pledge to deliver this 
increase by 2012 is expected to be modulated  to take into account the impact of the 
economic crisis on the US. According to the DAC simulation Japan's aid is also set to increase by around US$4 billion from 2008 le vels, while Canada's aid will slightly 
increase in volume and as a share of GNI. 
                                                
 
18 G20 London Summit Leaders' Statement of 02.04.2009, §25 
 
EN 20   EN So far, outside the EU only Norway  has reached an ODA level of 0.7% of GNI or 
more. The EU continues to stand out as the only group of donors that has given a 
time-bound commitment on th e 0.7% of GNI goal for ODA  (by 2015) and a 
collective intermediate  target of 0.56% by 2010. EU dis bursements in line with this 
pledge could add up to € 69 billion in 2010, mobilising an additional € 21 billion compared with 2006 levels (in current pric es). A general understanding is emerging 
that ODA is a long-term investment in a mo re stable world and more decisive action 
is needed to maintain the possibility of achieving the Gleneagles and other agreed global aid targets. Switzerla nd and Australia have also  set time-bound ODA targets, 
albeit aiming at lower levels. Comparable efforts are needed on the part of other 
donors, particularly G8 partners , new donors and emerging economies. 
 
EN 21   EN Figure: EU ODA as percentage share of DAC ODA and in € million 
EUROPEAN UNION AID
(in € million current prices and as a percent of DAC ODA)
010000200003000040000500006000070000
2001 2002 2003 2004 2005 2006 2007 2008 2010*in € million current prices
0%10%20%30%40%50%60%70%
percent of global ODA
EU 27 ODA in millions of €
EU 27 ODA as a percent of DAC ODA
Source: EC calculations on OECD DAC data and EC Monterery Survey *percentage based on linear assumption of global scaling up as EU MS c ommitment 
Source European Commission simulation based on OECD/ DAC data and on  information provided 
by the EU Member States in the2009Monterrey questionnaire  
5.1.2. EU ODA levels in 2008 
After the disappointing decline in 2007, EU ODA volumes have reached almost € 
50 billion,  an all-time high in volumes (in current prices) which corresponds to 
almost €100 spent on aid per EU inhabita nt. This brought the developing countries 
almost €4 billion of additional financi ng compared with 2007 and €1.8 billion more 
than in 2006. However, the upward trend  – corresponding to 0.40% of the EU's 
combined GNI  - has not been pronounced enough to reach again 2006 aid levels 
relative to income  (0.42% of GNI). Instea d, in 2008 EU aid basically recovered 
part of the ground "lost" in 2007  for the sustained scali ng-up of aid required to 
meet the EU targets for 2010. 
The picture among EU Member States countries varies . In most countries ODA 
increases remain volatile . The overall rise in EU aid was led by Spain, which 
contributed almost € 0.9 billion to the coll ective increase in EU aid accounting for a 
quarter of it, followed by Germany, the UK,  France, the Netherlands and Belgium. 
Despite having missed its self-set na tional ODA target of 0.5% for 2008 and 
notwithstanding the economic downturn, in  early 2009 Spain adopted a new and 
ambitious multi-annual policy framework, whic h confirms the decision to continue 
scaling up aid at a more ambitious pace than the EU to achieve 0.7% of GNI by 
2012. This is a good example of how far-sight ed understanding and political will can 
translate into practical and bold decisions. Significant scaling-up was also seen on 
the part of the UK af ter the 2007 drop-off due to completion of big debt relief 
operations – and accounted for more than 16%  of the total increase in EU ODA. The 
"0.7% club" mobilised more than €500 m illion additional financing, led by Sweden 
which increased its ODA by 0.05% of GNI. Sim ilar relative efforts were made by 
Portugal, followed closely by Belgium, Cyprus, Greece and Finland, Ireland and 
 
EN 22   EN Slovenia. Several other Member States (D E, DK, FR, IT, LT, LU, LV, RO, SK) also 
either maintained or slightly increased their ODA levels. This modest effort added in case of Germany another €666 million and in case of France € 385 million. Greece reported a sizeable increase to 0.20% of GNI, albeit from very lo w levels. Italy, also 
reaching 0.20% of ODA/ GNI, has moved to the bottom of the 15 EU countries that 
are DAC members. For the Netherlands and Poland, although absolute ODA amounts increased, the ODA to GNI ra tio actually decreased. Austria's 
disbursements decreased by €154 million, the biggest decline in aid in both absolute and relative terms in the EU, leading the way on the downward path also taken by 
Bulgaria, Estonia and Hungary. Malta' s ODA (2008: 0.11 % of GNI) has taken a 
particularly worrisome downw ard trend since 2005 when it  had been already above 
the 2010 target level (18% of GNI). 
Figure: Percentage share of Me mber States in EU ODA 2008 
Share of MS ODA in Total EU ODA (2008)
in € million and %
PT   425; 0,9%
E L  480; 1,0%
FI  790; 1,6%LU  283; 0,6%
E U12  805; 1,6%
IE   918; 1,9%
AT   1165; 2,4%
BE   1651; 3,3%
DK  1941; 3,9%
IT   3081; 6,2%
SE   3286; 6,6%
E S; 4635; 9,4%DE   9644; 19,5%
NL  4848; 9,8%UK  7919; 16%
FR  7596; 15,4%
Source: DAC data and European Commission sources (Monterrey survey 2009)
 
Source: DAC data and European Commi ssion sources (Monterrey2009 survey) 
The ratios of ODA to GNI might be subject to changes  after the public ation of this 
report. For the year 2008 only preliminary GNI  figures were available from Eurostat 
and from EU Member States' replies provi ded to the OECD/ DAC in March 2009 in 
response to the DAC advance ODA questionnaire. 
 
EN 23   EN Table: EU ODA levels 2005 – 2008 
ODA in € 
million ODA in % 
of GNIODA in € 
million ODA in % 
of GNIODA in € 
million ODA in % 
of GNIODA in € 
million ODA in % 
of GNI
Austria 1266 0,52 1194 0,47 1320 0,50 1165 0,42
Belgium 1580 0,52 1576 0,49 1425 0,43 1651 0,47
Bulgaria 2 0,01 1 0,00 16 0,06 13 0,04
Cyprus 12 0,09 21 0,15 18 0,12 27 0,17
Czech Republic 109 0,11 128 0,12 131 0,11 146 0,11
Denmark 1697 0,81 1782 0,80 1872 0,81 1941 0,82
Estonia 8 0 , 0 7 1 20 , 0 9 1 60 , 1 2 1 40 , 0 9
Finland 726 0,46 665 0,39 716 0,39 790 0,43
France 8067 0,47 8446 0,46 7212 0,38 7596 0,39
Germany 8112 0,36 8313 0,35 8978 0,37 9644 0,38
Greece 309 0,16 338 0,16 365 0,16 480 0,20
Hungary 80 0,10 119 0,14 75 0,08 72 0,07
Ireland 578 0,42 814 0,53 870 0,55 918 0,58
Italy 4096 0,29 2901 0,20 2897 0,19 3081 0,20
Latvia 8 0 , 0 7 1 00 , 0 6 1 20 , 0 6 1 40 , 0 6
Lithuania 12 0,06 18 0,08 30 0,11 41 0,13
Luxembourg 206 0,82 232 0,90 274 0,91 283 0,92
Malta 8 0 , 1 87 0 , 1 58 0 , 1 56 0 , 1 1
The Netherlands 4116 0,80 4344 0,78 4542 0,81 4848 0,80
Poland 165 0,07 236 0,09 265 0,10 264 0,08
Portugal 303 0,21 316 0,21 343 0,22 425 0,27
Romania N A N A 3 0 , 0 0 8 00 , 0 7 9 40 , 0 7
Slovak Republic 45 0,12 44 0,10 49 0,09 65 0,10
Slovenia 29 0,10 35 0,11 38 0,11 51 0,14
Spain 2428 0,27 3038 0,31 3755 0,37 4635 0,43
Sweden 2706 0,92 3151 0,99 3170 0,93 3286 0,98
UK 8666 0,47 9931 0,51 7191 0,36 7919 0,43
EU 15 TOTAL 44857 0,43 47039 0,43 44930 0,39 48663 0,42
EU 12 TOTAL 479 0,08 634 0,09 739 0,09 805 0,09
EU 27 TOTAL 45336 0,41 47673 0,41 45668 0,37 49468 0,402005 2006 2007 2008
 
Source: OECD/DAC, where available; Commission data based on Member States' information to the 
Commission or the DAC for 2008. Note: shaded cells  contain information supplied by Member States, 
white cells  DAC data. ODA is at current prices. Annex 2 describes the Commission's methodology for 
analysing Member States' indications on ODA pr ovided in response to the Monterrey survey. 
5.1.3 Short-term and medium-term adaption of EU assistance to developing countries in 
response to the financial and economic crisis 
The Communication19 identifies protection of the most vulnerable and sustaining 
economic activity and employment in deve loping countries as the priority areas 
requiring special support. This includes main taining and building in frastructure, e.g. 
closing the infrastructure financing gaps for the key missing links in Africa (see 
annex 3 ) and regional infrastructure in the Mediterranean (see annex 4 ), revitalising 
agriculture, investing in green  growth and stimulating tr ade and private investment. 
The Commission endeavoured to collect information from the Member States  on 
their planned measures to respond to the impact of the crisis in developing 
                                                 
19 COM(2009) 160 of 08.04.2009 'Supporting developing countries in coping with the crisis' 
 
EN 24   EN countries . For that purpose a questionnaire that  complements the Monterrey survey 
had been prepared, looking at ODA and non-ODA instruments that Member States 
were willing to use to the benefit of deve loping countries. So far, 12 Member States 
have reacted to this questionnaire20. The other Member States are invited to provide a 
response soon, as a coordination of EU ac tions and instruments will enhance the 
efficiency and effectiveness of the fort hcoming EU support to developing countries 
hit by the crisis. The return to the survey  shows that Member States' reaction to the 
crisis in developing countries has been cautious, in li ne with the uncertainty with 
regard to the actual impacts in partne r countries. There is, however, a wide 
agreement that development cooperation need s to respond to the ne w situation on the 
ground. Reprogramming to target  the key sectors of infras tructure, agriculture and 
climate change is considered in this contex t, while some Member States cite already 
elevated support to these sectors. 
In the short term, given the budget constraints of Member States, frontloading ODA 
is not considered feasible by most , while some see EC and EIB instruments as 
primary vehicles for additional fl exibility to respond to the crisis . Member States 
considered rapidly increasing aid effectiven ess a crucial part of increasing financing 
to the developing countries. 
Mobilising other sources of financi ng - besides ODA - to support developing 
countries has been considered important and is in line with the EU commitments on Policy Coherence for Development. Member Stat es stressed that such efforts need to 
be seen as additional to and separate from ODA. Finding it very difficult to quantify such measures in terms of development be nefit, Member States were not in position 
to provide comprehensive data on such support. 
5.1.4. Prospects of achieving the collective EU targets for 2010 
In 2005 the EU committed itself to additional aid targets, aiming to take individual 
ODA to 0.51% (EU-15) or 0.17% (EU-12)  by 2010, while those countries that 
already had high aid le vels promised to maintain them. Collectively, the EU should 
achieve 0.56% of GNI by 2010. Buoyed by higher national pledges from some 
Member States, the projection was that the co llective result could be in that order of 
magnitude. 
This projection was based on the policy d ecisions, which had been made by several 
EU countries at that time, and the following assumptions:  
• Countries with ODA levels of 0.7% of GNI or  above will maintain  that level: SE, 
LU, DK and NL have consiste ntly ensured the pledged levels, albeit with small 
variations that show how difficult it is for even the most ambitious EU ODA 
providers to deliver on their aspirations. 
• Countries that pledged to achieve 0. 7% before 2015, following more ambitious 
national deadlines, will increase their aid volumes linearly to meet the targets. Policy and budget decisions have, unfortuna tely, not confirmed this hypothesis: 
                                                
 
20 AT, BG, CY, DK, FI, HU, LV, MT, NL, SE, SI, UK, some of these Member States have though not 
provided full replies but rather general statements on priorities that need to be maintained despite the 
crisis situation. 
 
EN 25   EN France and Finland have lowered their sights and postponed the 0.7% deadline 
from 2012 to 2015. Others, while sticking to their target years, i.e. the UK (2013), 
Spain and Ireland (both 2012) , have taken policy and budget decisions implying a 
back-loading of the scali ng- up to the period after 2010. 
Despite the evident challenges to achievi ng 0.56% after unfavour able decisions by 
major stakeholders, the EU has repeatedly confirmed its resolve to achieve this objective. Getting there will require efforts from every Member State beyond 
the existing plans and minimum baselines  to which EU MS have individually 
committed themselves . 
 
EN 26   EN Figure: Progress towards and forecast fo r the collective EU target of 0.56% of 
GNI 
*Simulation based on European Commission calculations based on OECD/ DAC data 
Note: The red line  indicates the EU collective target of 0.56% of GNI; the blue line  marks the path 
that the EU needs to take to achieve t hat target by 2010. The broken line  shows the estimated progress 
if Member States fulfil their individual ODA commitmen ts, as known at present; the upper dotted line  
stands for the Member States' current forecasts on their ODA increases until 2010; and the lower 
dotted blue line  estimates the direction that the EU collec tive aid levels as a share of the GNI will take 
if Member States, which have not provided forward- looking data for 2009 and/ or 2010, maintain their current ODA level wit hout any further increases. 
5.1.5 Prospects for Member States ' individual targets for 2010  
As a consequence of the global financia l and economic crisis, public finance in 
Europe and donor countries is becoming increasingly strained. Tax revenues are 
lower than expected prior to  the crisis; higher expenditure  is needed to support the 
financial sector, stabilis e the economy and assist the increasing number of 
unemployed people. External policies risk therefore being considered of a lesser 
political priority and therefore suffer fr om reduced budget allocations. Even where 
the targeted ratios of ODA relative to GNI have been achieved, this can imply lower ODA in absolute terms compared to pre-cris is projections because  of lower nominal 
economic growth and depreciating exchange rates.  Strong political determination 
will be required and EU Member States need to prioritise budgetary 
expenditures in a way that ODA commi tments can be reached and are not 
curtailed in a time when developing  partners need this support most . 
In their reply to the survey a majority of  Member States expressed their resolve to 
increase their ODA. Although some MS ma y see a cut of ODA spending in 2009 due 
to crisis-related budgetary constraints, the overall trend is in the right direction . 
But the pace  for moving to the individual base line targets of 0.51% ODA/ GNI for 
the EU15 and of 0.17% ODA/ GNI for the EU12 is by and large insufficient . A fair 
burden-sharing between different EU countries risks becoming a contentious issue in light of the widening gap of the le vel of commitments and delivery: 
 
EN 27   EN • Meanwhile four EU Member  States – Sweden, Luxembourg, the Netherlands and 
Denmark are spending 0.8%  of their GNI or more on development and are 
planning either to maintain this level or to achieve the 1% target [LU, SE]. The contribution by these four countrie s to improving the EU average ODA 
performance is substantial, although their relative economic weight within the EU 
is not. 
• Some Member States (UK, ES, IE, and BE ) had set themselves national deadlines 
more ambitious than the EU time limits fo r achieving the target  of 0.7% but have 
decided to deviate from linear increases and backload the new development financing. This means that they will need  to be prepared to  increase their ODA 
spending drastically during this year 2009 and in the target date, which creates 
political uncertainty and might lead to postponement. However, these Member States are well on track to achieving th e minimum individual targets. The same 
applies to Finland. 
• While remaining far behind the agreed ta rgets and not on track to meet the 2010 
target, Greece and Portugal have taken not eworthy steps to increase their ODA 
and are moving in the right direction. 
• After achieving 0.5% of GNI in 2007, Austri a has slid backwards and the forecast 
continuation of this downward trend is  not in line with the EU-15 baseline 
objective. 
• Despite consistent but small aid incr eases since 2002, Germany, the EU's single 
biggest donor in 2008, cannot be considered on-track: aid levels to date are still 
lingering below the EU average; the c ountry has not yet mobilised resources 
commensurate with the amounts required for bridging the gap to 0.51%; nor have multi-annual ODA timetables been prepared. The same is true for France, which has shown high volatility in its past effo rts and is also still far from the 2010 
baseline threshold. 
• Italy is the only Member State apparently abandoning its commitments and 
planning significant cuts for 2009 and 2010, reducing its aid by €1 billion by 2010 
(corresponding to 0.11% of its GNI) and set to cut it to 0.09% by 2011. 
• There is some good news from EU-12 Member States: Cyprus has already 
achieved the 0.17% target and Slovenia, Li thuania, Malta and Poland are planning 
to attain it in 2010. Four other Member States (t he Czech Republic, Estonia, 
Hungary and Latvia) are also  increasing their aid, but do not plan to meet the 
target by 2010. Slovakia, Romania and Bulgaria  seem to be even further off track. 
Their ODA volumes will remain below 0.10% of GNI, unless the current forecasts 
are revised upwards substantially. 
 
EN 28   EN Table: EU ODA estimates for 2008-2013 (ODA in € million and % of GNI) 
2008 2009 2010 2011 2012 2013
ODA in € 
million ODA in % 
of GNIODA in € 
million ODA in % 
of GNIODA in € 
million ODA in % 
of GNIODA in € 
million ODA in % 
of GNIODA in € 
million ODA in % 
of GNIODA in € 
million ODA in % 
of GNI
Austria 1165 0,42 986 0,35 1144 0,40 1340 0,46 1580 0,52 1849 0,58
Belgium 1651 0,47 2098 0,60 2496 0,70 2596 0,70 2701 0,70 2808 0,70
Bulgaria 13 0,04 13 0,04 66 0,17 89 0,21 113 0,25 136 0,28
Cyprus 27 0,17 29 0,17 32 0,18 35 0,18 40 0,20 45 0,22
Czech Republic 146 0,11 150 0,11 141 0,10 167 0,11 279 0,17 391 0,23
Denmark 1941 0,82 1973 0,82 1977 0,80 2057 0,80 2141 0,80 2229 0,80
Estonia 14 0,09 12 0,08 16 0,10 28 0,17 38 0,22 48 0,26
Finland 790 0,43 916 0,48 1004 0,51 1111 0,54 1153 0,54 1333 0,60
France 7596 0,39 9548 0,49 10205 0,51 11500 0,56 12795 0,60 14090 0,64
Germany 9644 0,38 11371 0,45 13098 0,51 14712 0,56 16326 0,60 17941 0,64
Greece 480 0,20 635 0,26 883 0,35 1193 0,45 1418 0,51 1697 0,58
Hungary 72 0,07 59 0,06 139 0,14 214 0,21 260 0,25 305 0,28
Ireland 918 0,58 796 0,54 911 0,61 1026 0,66 1141 0,70 1197 0,70
Italy 3081 0,20 2467 0,16 1739 0,11 1558 0,09 4531 0,26 7503 0,42
Latvia 14 0,06 15 0,08 20 0,10 44 0,21 54 0,25 64 0,28
Lithuania 41 0,13 47 0,15 54 0,17 64 0,19 63 0,18 77 0,20
Luxembourg 283 0,92 275 0,92 290 0,93 315 0,94 343 0,95 373 0,96
Malta 6 0,11 9 0,15 10 0,17 12 0,20 16 0,25 20 0,30
The Netherlands 4848 0,80 5245 0,88 5405 0,89 5653 0,89 5634 0,86 5834 0,85
Poland 264 0,08 445 0,14 567 0,17 669 0,19 739 0,20 964 0,25
Portugal 425 0,27 479 0,29 557 0,34 657 0,39 770 0,44 870 0,47
Romania 94 0,07 169 0,13 244 0,17 333 0,21 423 0,25 513 0,28
Slovak Republic 65 0,10 47 0,07 49 0,07 56 0,07 63 0,07 71 0,08
Slovenia 51 0,14 55 0,15 67 0,17 81 0,19 99 0,22 119 0,24
Spain 4635 0,43 5321 0,49 6139 0,56 7355 0,64 8571 0,70 9006 0,70
Sweden 3286 0,98 3157 1,06 3036 1,00 3135 1,00 3252 1,00 3369 1,00
UK 7919 0,43 7101 0,48 8388 0,56 9545 0,61 10702 0,66 11859 0,70
EU 15 TOTAL 48663 0,42 52368 0,47 57272 0,50 63753 0,54 73058 0,60 81957 0,65
EU 12 TOTAL 805 0,09 1051 0,11 1405 0,15 1793 0,18 2187 0,20 2754 0,24
EU 27 TOTAL 49468 0,40 53419 0,44 58676 0,48 65546 0,51 75244 0,57 84710 0,61  
Source: OECD/DAC for 2008, where available; otherwise Commission data based on Member States' information to the Commission. No te: shaded cells  contain information 
supplied by Member States, white cells  are Commission data or simulations. ODA is at current prices. Annex 2 describes the Commission's methodology for analysing Mem ber 
States' indications on ODA provided in response to the Monterrey survey.  
 
EN 29   EN Figure: ODA-indicator for EU15 
00,10,20,30,40,50,60,70,80,911,11,2
Italy 
Greece
Portugal
Germany
France
Austria
UK
Spain
Finland 
Belgium
Ireland
Netherlands
Denmark
Luxembourg
Sweden% ODA/GNI
2015 target of 0.7% ODA/GNI
2010 target of 0.51% ODA/GNI
ODA/GNI in 2000         The position of the arrows represent the 2008 ODA/GNI  level for each country.   
The direction of the arrow indicates whether ODA went up or down from 2007 levels.  Arrows are coloured:
green             the MS is "on track" with a clear timetable to meet the 2010  target of 0.51% ODA/GNI, 
orange           the MS is likely "on track", plans to  reach the 2010 target of 0.51% ODA/GNI, but does not have a  timetable, 
red                the MS is not "on track" and needs to substantially reinforce efforts to reach the target.  
       A diamond indicates that ODA levels stayed the same from 2007 to 2008.
Towards reaching ODA targets0.200.43 0.430.440.830.92
0.200.390.380.420.46 0.580.98
0.270.86
 
 
EN 30   EN 
 
EN 31   EN Figure: ODA-indicator for EU12 
00,050,10,150,20,250,30,35
Bulgaria Latvia Romania Hungary Poland Estonia Slovakia Czech
RepublicMalta Lithuania Slovenia Cyprus% ODA/GNI
2015 target of 0.33% ODA/GNI
2010 target of 0.17% ODA/GNI
ODA/GNI at time of EU accession0.11
0.060.070.09
0.040.07
Towards reaching ODA target s
                    The position of the arrows represent the  2008 ODA/GNI  level for each country.   
The direction of the arrow indicates whether ODA went up or down from 2007 levels.  Arrows are coloured:
green            the MS is "on track" with a clear timetable to meet the 2010  target of 0.17% ODA/GNI, 
orange          the MS is likely "on track", plans to reach the 2010 target of 0.17% ODA/GNI but does not have a timetable 
red               the MS is not "on track" and needs to substantially reinforce efforts to reach the target.  
                   A diamond indicates ODA levels stayed the same from 2007 to 2008.0.12
0.10.14
0.08 0.11
* will reach 0.17% ODA/GNI in 20110.17
 
 
EN 32   EN Further work needs to be done to tackle the sensitive issue of cooperation in the 
framework of peace and security related ac tivities concerning developing countries. 
A number of those activities are not c overed by the current ODA-definition of the 
OECD/ DAC. Discussion in the OECD/ DAC n eeds to continue to reflect on this 
situation that concerns, amongst others, al so the Africa Peace Facility, funded by the 
EDF. Another area concerns migration, wher e the survey with the Member States 
shows that more reflection is warranted to better articulate the links with ODA. 
5.1.6. Little progress with multi-annual ODA tim etables to enhance ODA predictability 
Progress remains slow towards establishing multi-year timetables  showing how 
Member States intend to scale up their aid levels towards the agreed ODA targets. The decisions by the UK (in 2008) and Sp ain (February 2009) to move to 0.56% 
GNI by 2010 prove that this EU target can facilitate nationa l decision-making on 
multi-annual ODA timetables in budget proc esses and in adopting government policy 
frameworks. Some MS have timetables, but these plans mention ai d levels that will 
be insufficient by a long way to meet the 2010 EU ODA targets. Nonetheless, 
Portugal's adoption of a multi-year timetable  is a commendable effort to catch-up 
from its current low aid levels, even if the available forecasts do not yet reveal by 
when the country will achieve its 0.51% individual baseline target. 
Member States seem to take different approaches with regard to timetables: There is 
a more or less equal divide between those w ith timetables for a set period and those 
which prefer a rolling program me with annual updates. Most  of the EU co untries that 
have not been able to make  any forecast on their futu re ODA spending levels cite 
legal restrictions related to  their national budget cycle. So me of them have processes 
under way to address the legal and policy obstacles to multi- annual commitments. 
These efforts have to be pursued and co ncluded urgently, es pecially in those 
countries that had referred to internal discussions on the i ssue in previous years. The 
lack of appropriate policy frameworks a nd/or budget forecast decisions worsens the 
back-loading in the EU scaling-up process.  This undermines the Union's ability to 
live up to its immediate ODA targets for 2010 in addition to the medium-term targets 
for 2015. 
5.1.7. ODA for Africa 
Africa is the region furthest off track fr om meeting the Millennium Development 
Goals and the EU is paying special attenti on to its development efforts. In 2005 EU 
Member States committed themselves to increase development assistance to Sub-Saharan Africa and to channel at least 50% of their collective aid increase to the 
continent. 
The debt relief spike that  substantially augmented to tal EU flows during 2005 and 
2006 also affected EU ODA to Africa, as a significant share of debt relief was for 
Nigeria. With the decline in debt forgiven ess there was also a decline in the overall 
EU ODA to Africa in 2007, since the mobilis ation of country programmable aid did 
not fully compensate for the amounts of debt relief that had been made available before. In 2008 EU bilateral aid to Africa has increased to €14.1 billion,  an 
amount insufficient to match with the 2006 level. 
 
EN 33   EN Figure: EU bilateral ODA to Africa (Nor th and Sub-Saharan Africa) in current 
prices 
EU15 + EC ODA to Africa in € million and as a %  of total ODA
14 119
11 187 16 683 13 625 10 24329%
25%35%
30% 30%
 2 0004 0006 0008 00010 00012 00014 00016 00018 000
2004 2005 2006 2007 2008€ million
0%5%10%15%20%25%30%35%40%ODA to Africa, Total
% of total EU 15 ODA to Africa
Source: OECD DA C 
Source: OECD/ DAC  
Looking at EU ODA to Sub-Africa excluding debt relief , there is a clear and 
persistent upward trend in aid flows in absolute amounts since 2005 . Beteween 
2007 and 2008 this aid increased by more th an a third showing that bilateral 
programmes are being refocused towards Sub-Sahara Africa. 
Figure: EU bilateral ODA increase to Sub-S ahara Africa without debt relief grants 
EU15 + EC bilateral ODA to Sub-Saharan Africa 
in € million and as a % of total bilateral ODA, Excluding Debt Relief
10 605
7 9177 0606 2976 04740%
30% 30%
26%38%
 2 0004 0006 0008 00010 00012 000
2004 2005 2006 2007 2008€ million 
0%5%10%15%20%25%30%35%40%45%
ODA to Sub-Saharan Africa, Total % of total EU 15 bilateral ODA to AfricaSource: OECD DAC 
Source: OECD/ DAC 
The future aid increases to Africa remain ha rd to predict as the Member States gave 
no indication of their plans to sustain this trend in their forecasts provided in 
 
EN 34   EN response to the Monterrey survey. While a mix of instruments is considered 
necessary, most Member States will continue  to use bilateral aid as the preferred 
channel for ODA to Africa, either by means of project/ programme approaches or as 
budget support or support for regional/continental organisations. Compared with indications from Member States last y ear, budget support seems to be falling out of 
favour, as only five countries c onsider this their preferred modus operandi  for scaling 
up for Africa (down from ten). In particul ar the countries that have become EU 
members since 2004 continue to provide their support to Africa mainly via 
multilateral channels, including instruments administered by the European Commission. 
5.1.8. ODA for the least developed countries (LDCs) 
In November 2008, Member States promise d, as part of the EU's overall ODA 
commitments, collectively to provide 0.15% to 0.20 % of their GNP to LDCs by 2010 while fully respecting the differentiate d commitments set out in the "Brussels 
Programme of action for the LDCs for the decade 2001-2010. This report will establish the baseline for future monitoring. 
The share of EU ODA to LDCs has been increasing constantly. The feasibility of 
achieving this target depends on fulfilling the overall ODA commitments. Ten of the 
EU-15 MS have indicated that  they are willing to provide  at least 0.15% of their GNI 
to LDCs by the target date. As some of them do not plan to increase their overall 
ODA levels, this may entail significant re -prioritisation of their current aid 
programmes. Of the EU-12, only Cyprus a nd Lithuania are prepared to reserve a 
share of their ODA for LDCs. 
The current trend and preliminary predictions indicate that the collective ODA 
target of 0.15 to 0.20% of GNI to LDCs by 2010 remains in reach , provided MS 
refocus their spending plans accordingly. 
Figure: EU ODA to LDCs 
EU15 ODA to LDCs in € million and as a % of GNI
17022 €
 5 915 € 14 000 € 13 204 € 0,15
 0,08%  0,12% 0,12% 
 2 0004 0006 0008 00010 00012 00014 00016 00018 000
1996 - 1997 2006 2007€ million 
-0,020,040,060,080,100,120,140,16
%GNI
ODA to LDC Per cent of donor's GNI *Simulation based on the collective ODA target of 0.15% to LDCs by 2010
 
 
EN 35   EN 5.1.9. Continued need to enhan ce ODA reporting capacity  
In follow-up to the Council Conclusions of May 200721 the Commission, in close 
cooperation with the OECD/ DAC and Au stria, organised seminars on ODA 
reporting standards for EU12 administrations22. Eight MS participated in the training 
that aimed at facilitating adherence of these EU countries to their ODA reporting 
obligations in follow-up to the commitments  taken at EU level. The Commission will 
continue to work with the DAC secretaria t on providing such support. As the EU12 
are not yet DAC-members they do  not fully - or not at all - report to the organisation, 
although all of them are covered by the OECD/DAC outreach strategy for new donors. A hindrance for further enhanci ng the statistical reporting (capacity, 
expertise) stems from the fact that some  EU12 MS have not appointed a permanent 
ODA reporting officer or unit. 
5.1.10. Outlook 
There is no more time for complacency . The EU needs to maintain its leadership 
role for a global development partnership and must not put at risk its credibility as a 
reliable and predictable donor. Urgent and decisive action is required in a difficult 
economic context during 2009 and 2010:  
• The European Council of March 2009 highlighted the need to honour agreed 
commitments to increase development assistance. This requires a concerted 
action by all EU Member States to reach the collective target of 0.56% ODA 
GNI by 2010.  
• Member States need to live up to their individual commitments  while 
preserving a fair burden-sharing  among themselves in line with the pledged 
2010 thresholds. 
• In order to live up to agreed commitments regarding the establishment of rolling 
multi-annual indica tive ODA timetables
23 Member States that do not dispose of 
such national timetables  need to include multi-year forward-plans in their 
Government work programmes and relate d budget decisions. As budget decisions 
for 2010 are being prepared now and 2015 is the next target date for ODA levels, 
such timetables should best become available by the end of 200924 and explain 
how countries will go towards meetin g the 0.7% (EU15)  and 0.33% ODA/ 
GNI (EU12) target of 2015 .  
• In line with the Council Conclusions  of May 2007 Member States should adhere 
to their ODA reporting obligations . A useful step in EU 12 countries that have 
not yet done so would be to assign perman ent reporting officers for ODA statistics 
and to ensure sustainability in their reporting system. 
                                                 
21 "Keeping Europe's promises on Financing for Development" of May 15, 2007 
22 In 2008 and 2009 as part of the 3rd capacity building programme in development policy for the EU12 
23 Council Conclusions (GAERC) of 11.11.2008 and of 27 May 2008 
24 But not later than by the end of 2010 to remain in keeping with the Council Conclusions of 2008, see 
previous footnote 
 
EN 36   EN 5.2. Bridging the finance gap: innovative sources of financing 
5.2.1. Innovative finance: a timely matter 
As seen in the previous chap ter, the current crises are making it ever more difficult to 
meet Europe's ambitious commitment to scale up aid to developing countries. In 
assessing whether the EU is able to  develop and adopt innovative finance 
mechanisms (IFM) and thereby meet its  ODA commitments or mobilise further 
development funding, the Monterrey survey so unded out Member States' interest in 
exploring further possibilities or making firm commitments to innovative 
mechanisms. Most of the existing initia tives concerning innovative sources of 
funding and financing mechanisms were launc hed with a view to providing a stable, 
predictable and, in the case of the International Financing Facility (IFF), frontloaded 
funding to achieve the Millennium Devel opment Goals and other development goals. 
The political message concerning innovati ve financing mechanisms at Member 
States level can be summed in the three following points: 
• Member States agree to some exte nt on improving resource mobilisation by 
making funds more predictable, however they remain divided over the importance 
of the issue and feasibility of schemes. 
• The debate within many Member Stat es ' administration on the scope for 
additional official financial commitments for development assistance is 
continuing.  
• There is traditional reluctance in parts of the national administrations of many 
Member States to consider international taxation schemes; this apprehension is 
exacerbated by the global financial crisis. 
5.2.2. A small number of EU Member States ar e promoting innovative sources of finance 
Ten EU countries mobilised funds via innovative mechanisms in 2008, while 
Hungary and the Czech Republic are conductin g informal discussions at the national 
level. France, Germany, the Netherlands, Sweden, Luxembourg, Italy and the UK are becoming more engaged in the field of i nnovative finance, but th e majority of the 
Member States are not participating in any of the existing innovative tools and 
instruments. The major contributions to existing mechanisms have been: 
• Air ticket contributions : France and the UK have an air ticket tax, but, unlike 
France, the UK does not earmark any of the proceeds for development finance. 
Luxembourg is the only country to collect voluntary contributions from air 
passengers  (since April 2008). Cyprus has also  introduced an ai r ticket tax, but 
has yet to sort out legal constraints relati ng to the contract with the private airport 
operator. In 2008, Cyprus  (€ 400000) and France (€164 million) paid the proceeds 
from their air ticket tax to the  International Drug Purchase Facility (UNITAID)  
and the UK contributed around €19 million in the form of regular ODA. What is 
more, the Portuguese government is develo ping an internal c onsultation process, 
involving different ministries and the par liament, in order to assess the technical 
and financial implications of  potential support for UNITAID. 
 
EN 37   EN • International Financing Facility for Immunisation (IFFIm) : The 
disbursements of the UK (€12.6millio n), France (€19.2 million), Italy (€5.76 
million), Spain (€9.1 million) and Swed en (€1.9 million) under their existing 
long-term commitments backed the IFFIm,  following the first bond issue of US$ 1 
billion in 2006. A second issued in March 2008 raised a further US$223 million. 
• In February 2007, the UK and Italy (togeth er with Canada, Norway, Russia and 
the Bill & Melinda Gates Foundation) launched the first Advance Market 
Commitment (AMC) for the pneumococcal vaccines . In 2008 Italy contributed 
€36.04 million and Spain has expressed interest in a further AMC for malaria.  
• Debt2Health: Germany disbursed €50 million in debt relief for Indonesia and €40 
million for Pakistan via its new Debt2Hea lth initiative. Debt2Health envisions 
freeing up domestic resources wi th the aid of debt relief that can be invested in 
urgent public health needs. Creditor count ries forgo a portion of their claims on 
condition that the beneficiary country invests an agreed amount in health under a -
programme approved by the Global Fund. Th is counterpart payment is made to 
the Global Fund. 
• Financial and currency transaction levy : Belgium and France had earlier 
introduced legislation to tax such transactions; effective implementation is linked 
to the existence of a similar levy in the other EU Member States. Austria and Italy 
have expressed interest in  introducing a tax on financial or currency transactions 
at EU level. 
• Climate change  is giving a new boost to work on innovative financing and seems 
to be inspiring some Member States that ha ve so far been reluctant to take a fresh 
look on innovative finance: Germany (€100 million in 2008 and €225 million in 2009) and Denmark (€ 13.4 million in 2008 with the same amount earmarked for 2009) have both decided to allocate an in creasing share of thei r national carbon 
trade revenues to climate change mitigation and adaptation projects, focussing on developing countries. 
Member States agree to some extent on improving resource mobilisation by making 
funds more predictable, increasing the vol ume of traditional development assistance 
and working better with the private sector and the markets. The UK in particular 
emphasises the importance of harnessing th e private sector by improving regulatory 
frameworks to provide greater incentives for private investment
25. 
Finally, Member States are equally split between those that would like to explore 
further the potential of certain other mech anisms (e.g. a financial transaction tax, 
global lottery) and those that do no t consider them realistic options. 
                                                 
25 The UK is currently using ODA to leverage additiona l private sector investment via the facilities of the 
Private Infrastructure Development Group and the Ch allenge Fund approach (which provide matching 
grants of up to 49% of the costs of commercial proposals selected on a competitive basis by an 
independent expert panel). 
 
EN 38   EN 5.2.3. Actions required for implementing ne w mechanisms and partnerships allowing an 
increase in financing for development26  
Consensus runs deep that the fight agai nst hunger and poverty and for promotion of 
development will not be won unless th e gap between politi cal commitment and 
development financing is bridged. At the time of writing, global ODA flows in 
response to traditional financial commitmen ts made by the donor community remain 
uneven and slow. As a result, boosting aid to countries that are al ready aid-dependent 
will require a degree of budgetary predicta bility that only new mechanisms could 
provide. Innovative finance mechanisms can therefore make a crucial difference in 
enhancing ODA resources. 
With a view to  leveraging finance with the aid of  innovative mechanisms, this report 
calls for an urgent assessment of the different ideas and proposals . The ultimate 
financial efficiency  of development financing and the effective use of funds are key 
criteria for the assessment. T he Commission encourages efforts to raise additional 
development finance for the developing world as long as these mechanisms do not undermine the efforts to strengthen nati onal ownership, alignment with country 
systems and donor coordination and harmoni sation. It is therefore important to 
diagnose the potential problems carefully befo re jumping to any particular innovative 
finance solution. This entails considering  the: 
• cost benefit analysis at the outset; 
• common set of criteria for j udging the range of solutions to problems identified; 
• political championing and multi-donor coordination; 
• evaluations of pilot initiatives; 
• focus on effective use of aid and on ge nerating additional finance, paying 
particular attention to the existing aid architecture. New initiatives should avoid any further proliferatio n of actors and funds. 
On this basis innovative sources of fina ncing should be further developed and 
implemented. 
• Greater focus should be placed on using innovative finance to generate additional 
private sector investment, particularly  in the current economic climate, e.g. 
exploring how public finance, via risk-rela ted instruments, could create incentives 
for private sector investment. The EU encourages development of tools to 
mobilise private funds for development (e.g. risk-sharing initiatives). 
• Attention needs to be paid to donors’ commit ments to ensure that  predictability of 
revenue increase is turned into predicta ble delivery of resources in developing 
countries. 
                                                
 
26 In follow up to the Council Conclusions GAERC 11.11.2008 'Guidelines for EU participation in the 
International Conference on Financing for Development (Doha) 
 
EN 39   EN • Member States could support successful ongoing initiatives, such as the 
auctioning of emission certificates unde r the European Emissions Trading 
mechanism as a growing source of devel opment finance, to adapt to climate 
change in developing countries. 
6. EXTERNAL DEBT : CHALLENGES TO DEBT SUSTAINABILITY IN DEVELOPING 
COUNTRIES  
Developing countries that have received mu ltilateral and bilateral debt relief in the 
recent past have been able to invest significantly more in development. In the current global economic downturn this may also enable them to develop their own fiscal stimulus response. Ne vertheless, since 2007, many post-HIPC countries have been 
particularly exposed to a succession of shocks  (e.g. high and volatile food and 
energy prices) that have led them into new borrowing . Debt sustainability  is 
therefore often part of the vulnerability assessments that are being carried out to 
gauge the impact of the multiple crises on de veloping countries. In order to alleviate 
the impact of the new financial crisis on progress towards the MDGs the EU needs to 
continue its full support for the HIPC/MDR I initiatives. Agains t this background 
encouraging progress has been made in this  area with almost all the Members States 
indicating that they had de livered, timely, on their commitments to those initiatives. 
Despite the risk of more restricted acce ss to new loans and the higher costs of 
borrowing many developing countries will be forced to resort to new borrowing to 
support continued investment in human and physical capital. These new loans need 
to be carefully managed, especially sin ce a number of post-completion-point HIPCs 
were already assessed as being at high risk  of debt distress prior to the economic 
downturn. It is therefore, reassuring that th e majority of Member States reported that 
they were taking action to promote debt su stainability, e.g. via the Debt Management 
Facility for Low Income Countries ma naged by the World Bank. Replies from 
Member States also suggest that existi ng debt management and sustainability 
mechanisms should be further enhanced, their membership broadened and capacity 
in developing countries improved. 
6.1. The implementation of the HIPC initiati ve and preserving debt sustainability  
Continued participation by creditors an d donors in existing debt relief 
initiatives , in particular the Heavily Inde bted Poor Countries (HIPC) and 
Multilateral Debt Relie f Initiatives (MDRI), is central to debt sustainability . The 
statements by Member States that they have delivered, without delays, on their 
commitments to the HIPC/ MDRI initiativ es, are consistent with the WB/IMF 
reporting on the subject. This marks an im provement on previous years. In addition, 
the European Investment Bank has decided th at its own resources assigned for HIPC 
debt relief could be used to finance clear ance of the arrears of eligible HIPCs. 
Maintaining long-term debt sustainability in post-HIPC/MDRI low-income 
countries will be a central challenge  in the future. The most commonly cited kind of 
action taken by the EU Member States to support debt sustainability is the decision to apply the OECD Export Credit Group guidelines on debt sustainability  and a 
commitment to use the Debt Sustainability Framework  for informed decisions on 
lending. Several EU countries gave details of direct technical assist ance to strengthen 
public debt management, whic h they provide via multilateral initiatives, such as the 
 
EN 40   EN World Bank's debt management  facility, or bilaterally in  LDCs. In their response to 
the annual questionnaire some Member Stat es also referred to a meeting, hosted by 
the Paris Club in 2008, at which the Debt Sustainability Framework was explained, 
promoted and discussed with commercial cr editors. The majority of Member States 
would appreciate greater guidance on how to implement the commitments given in 
the May 2008 Council Conclusions which we re further developed in the November 
2008 Council Conclusions on EU participati on in the Interna tional Conference on 
Financing for Development in Doha. Although  only a minority of Member States so 
far acknowledges a need for a sovereign debt restructuring mechanism  to deal 
with future cases of debt distress  in developing countries, others are ready to 
enhance existing initiatives. The G20 at their London Summit underscored the 
importance to review the flexibility of the Debt Sustainability Framework and 
called on the IMF and World Bank to re port to the IMFC and Development 
Committee at the Annual Meetings27. 
6.2. Next steps  
In the light of the findings and chal lenges described above, and reflecting 
conclusions reached by the EU for and disc ussions at Doha, the following measures 
should be taken: 
• continued full and timely support for the implementation of the HIPC initiative, 
ensuring that eligible countries  receive pledged debt relief. 
• call on commercial and non-Paris Club o fficial creditors to step up their 
contribution to implement the HIPC initiat ive and to grant comparable treatment 
to non-HIPC countries that have benefited from the Evian approach; 
• as reflected in the November 2008 Council Conclusions on EU pa rticipation in the 
Doha Conference on Financing for Devel opment, the EU supports discussions on 
enhanced sovereign debt restructuring mechanisms based on existing frameworks 
and principles, including the Paris Club. There is a need to seek broad 
participation by creditors and debtors a nd fairer burden-sharing across creditors 
with a central role for the Bretton Woods Institutions (BWI) in the debate. The EU 
also supports risk management initiativ es linked to the volatile trends in 
commodity prices in developing count ries to reduce the impact of these 
exogenous shocks; 
• it is important to help restore and preser ve debt sustainability in low-income 
countries. In follow-up to its position defined in the Council Conclusions of November 2008 the EU should invite all creditors and borrowers to improve 
transparency on loans and debt-stocks and to apply international guidelines such 
as the Debt Sustainability Framework of  the BWI and the official export credit 
guidelines agreed by the OECD Export Credit Group. The EU has committed to 
not sell claims on HIPCs to creditors unwilli ng to provide debt relief and calls on 
all countries to do likewi se and deter aggressive li tigation by distressed-debt 
funds. 
                                                
 
27 G20 London Summit Leaders' Statement of 02.04.2009, §25 
 
EN 41   EN • Consideration should be gi ven to making full use of the Debt Sustainability 
Framework's existing flexibility to reflect  the diversity of situations across low-
income countries; 
• Further increased technical assistance is necessary to strengthen the debt 
management capacity of debtor nations in the form of either multilateral initiatives 
or bilateral support. This capacity suppor ts effective debt negotiations with non-
Paris Club official bilateral creditors and commercial creditors; and enhances democratic oversight of new debt and use of resources freed with the aid of debt 
relief; 
• the European Commission is willing to assist Member States on how to 
implement the commitments agreed in the 28 May and 11 November 2008 General Affairs and External Rela tions Council Conclusions on debt. 
7. 
SYSTEMIC ISSUES : WORKING TOGETHER FOR INTERNATIONAL GOVERNANCE AND 
STABILITY  
International financial stability is a globa l public good. The global financial crisis has 
exposed weaknesses in the intern ational economic governance system. 
Improvements in the effectiveness, cohe rence and complementarity of the global 
institutions are necessary. Furthermore, the Bretton Wo ods Institutions need to 
strengthen their analysis, prevention and support methods  for developing countries 
affected by international financial cris es, while involving regional economic and 
financial institutions more closely. 
This report welcomes the current international debate to review the international 
financial and monetary architectu re and global economic governance , in order to 
ensure a more effective and coordinated management of global issues such as financial stability, food and energy secur ity, climate change or  the fight against 
major pandemics. This debate should take into account the ongoing initiatives to address the financial crisis at European a nd international level and should involve the 
World Bank, the IMF, the United Nations, the WTO and. relevant regional institutions. The EU should make sure that  the interests and needs of developing 
countries are duly taken into account in the reform debate and decisions. 
The reform package adopted by the International Monetary Fund , which 
improved the alignment of members' quotas w ith their relative positions in the world 
economy and which helped to strengthen th e voice and represen tation of developing 
countries is a welcome st ep. All IMF members should urgently ratify this reform 
of quota and voice, as agreed in April 2008. The call of the G20  in that direction 
and to complete  the next review of quotas by January 2011  is welcome
28  
The Commission welcomes the adoption by the Development Committee of a reform 
package including an additional seat for sub-Saharan Africa on the Bank’s board  
and the increase in developing and transiti on countries' voting shares in the IBRD 
and IDA, with special emphasis on smaller members as an important first step in the 
                                                 
28 G20 London Summit Leaders' Statement of 02.04.2009, §20 
 
EN 42   EN comprehensive reform of the World Bank governance and encourages further 
realignment of shareholdings in the Bank, considering the evolving weight of all 
members in the world economy and other Bank -specific criteria c onsistent with the 
World Bank Group's development mandate. Quick implementation of the first phase of this governance reform of the Wo rld Bank, as agreed by the Development 
Committee in 2008, is called for . This will lay the appropriate basis for further 
discussion, to make governance more effective. 
Furthermore, this report supports an open, transparent merit-based process for 
selection of the IMF Managing Director and the WB President  and the 
simultaneous opening of these positions to applications from all board members and embraces the proposal of the G20 London Summit in this regard
29. 
In order to improve efficiency, an increa se in resources and improvement of the 
instruments of the IFIs is needed. The Commission supports full ratification by IMF 
Member States of the Fourth Amendment that provides a mandate for doubling Special Drawing Rights. In the case of  the World Bank, the Commission favours 
frontloading to attenuate the effect s of the crisis on IDA countries. 
Moreover, the coherence of policies and action between the IFIs and the United 
Nations need to be strengthened. The UN plays a central role in the multilateral 
system due to its universality and br oad mandate. The UN is the only body where 
consensus can be built between all Stat es and regions, including those currently 
under-represented in or missing from econo mic and financial governance structures. 
The contribution by the UN to the work of  the IFIs should be stepped up and made 
more systematic, including by enhancing the UN's role in the IFI's governance 
bodies, safeguarding and conso lidating the IFI's role in the relevant UN governance 
and management bodies and other UN fo ra and regularising executive contacts 
between the organisations. Furt her arrangements should also  be considered in order 
to enhance the debate on global economic issues in the Economic and Social Affairs Council (ECOSOC). 
8. C
OPENHAGEN AND BEYOND : THE CHALLENGE TO MOBILISE FUNDING FOR CLIMATE 
CHANGE RELATED EFFORTS OF DEVELOPING COUNTRIES  
8.1. Financing related to climate change and other environmental challenges in the 
wake of the crisis 
Climate change is happening and developing countries are the worst affected because 
of their heavy dependence on weather condit ions and their vulne rability to climate-
related disasters. The poorest developing count ries that are least to blame for climate 
change are hit earliest and hardest. Tacklin g climate change is necessary in order to 
achieve environmental sustainability, whic h is also one of the MDGs. Moreover, 
there is a risk that climate change coul d reverse progress towards other MDGs such 
as food security and health for all. 
Climate change can also result in important  forced displacements of populations. The 
rise of those internal and ex ternal migratory flows could lead to 200 million of forced 
                                                 
29 G20 London Summit Leaders' Statement of 02.04.2009, §20 
 
EN 43   EN migrants by 2050, involving heavy economic and social costs for the most vulnerable 
countries. 
The financial, economic and environmenta l crisis is worsen ing the poverty in 
developing countries, but also offers an opportunity for a strong policy response for 
"green growth"  and opens up new prospects fo r sustainable development. 
At the same time there is a pressing need to reach agreement in Copenhagen in 
December 2009 on a system to tackle climate change that responds to the challenges. Creating an adequate global financial architecture is a key component of any system. 
The estimated costs for both mitigation and adaptation are high, but manageable, 
provided timely mitigation efforts are taken so  that the temperature rise can be kept 
below 2°C. The European Council 
30 has reconfirmed the resolve of the EU to play a 
leading role to contribute to this goal  and to reduce by 30% its emissions provided 
that other developed countries commit themselves to comparable greenhouse gas reduction targets and that advanced devel oping countries ade quately contribute 
according to their responsibilities and respec tive capabilities. This is in line with 
latest research, which indicates that keeping the 2°C target within reach will 
require also developing countries as a group, in particular the most advanced, 
to reduce their predicted emission growth rate . In accordance with this insight 
developing countries should commit them selves to a low-carbon development 
strategy, alongside the advan ced economies. Implementation of such a strategy in the 
poorest developing countries, which coul d encourage, for example, renewable 
energy, should be supported technically and financially. The European Council has 
underscored that the EU will take on its fair share of financing such actions in developing countries. It is important to rapidly harness mitigation measures that 
create a net economic benefit ("picking the low hanging fruit" ). Such a focus 
should be part of the resp onse to the current crisis. 
Achieving the MDGs will require substantial investment to adapt to climate change. 
For the LDCs the United Nations Framework Convention on Climate Change (UNFCCC) established a fund to prepare National Adaptation Programmes of Action 
(NAPAs) that describe the priority adapta tion activities to be funded. In the context 
of the EU Global Climate Change A lliance (GCCA) support to non-LDCs for 
implementing climate related policies via (sector) budget support has been mentioned as an option. These activities generally fall within categories that are receiving ODA funding: e.g. irrigation a nd water management, flood protection, 
developing drought-resistant  crops and reforestati on. The UNFCCC Secretariat 
estimates that adaptation costs in all developing c ountries could range from €23 
billion to €54 billion per year in 2030. Further study of the economics of climate 
adaptation is required, but the needs are larg e in comparison with the present size of 
ODA. Future climate aid will compete with other internationally agreed development 
objectives. 
Covering the cost of coping with climate change (mitigation and adaptation actions), 
especially in the most vulnerable deve loping countries, will require significant 
domestic and external sources  of finance, both private and public. Financing related 
                                                
 
30 Conclusions of 19-20 March 2009 
 
EN 44   EN to climate change should be increasingly mobilised by industrial countries to support 
those countries, which have contributed very  little to climate ch ange, but will be the 
first and hardest hit, so that they can cope  with climate change, especially LDCs and 
Small Island Developing States (SIDS). The following main sources can be used: 
• increasing ODA budgets (but not at the expense of budgets for other MDGs); 
• increasing private-sector flows such as via a (reformed) Clean Development 
Mechanism; legal frameworks and public funds are needed to leverage these 
flows; 
• innovative sources of funding that are linked to the carbon market, e.g. using a 
share of the revenue from auctioning em ission rights, such as via the proposed 
Global Climate Financing Mechanism or a levy on international air transport. 
The European Council has also called to explore more closely international 
financing mechanisms.  Public financial contributions at the international level 
should be comparable and be based on the polluter-pays principle and each country’s economic capacity. As regards implementation of climate support, the Member States and the Commission generally favour using multiple channels such as: bilateral programmes, EU programmes or multilateral programmes managed by the World Bank or by the UN system. So far, the Member States are implementing very 
few innovative funding mechanisms. A few Member States are already using 
revenue from emission trading. This is lik ely to grow as auctioning of emission 
rights becomes generalised in the future. Some Member States have indicated that 
they are willing to use part of the revenues for climate finance in developing countries (including for adaptation, re ducing emissions from deforestation and 
degradation (REDD), contributions to th e Global Energy Efficiency and Renewable 
Energy Fund and technology transfer. Legal complications, related inter alia, to budgetary treatment are sometimes mentione d as a limitation for using innovative 
funding. Nevertheless, there is an openne ss to tap the potential for innovative 
funding. Therefore further analysis and ex changes of experience are desirable. 
The EU has welcomed the mobilization of IF Is and bilateral players in the area of 
climate change, such as the establishment of  the Climate Investment Funds (CIFs) by 
the World Bank. These funds are designed to fill the financing ga p for urgent action 
until a new architecture fo r financing related to clim ate change under the post-2012 
arrangements becomes effective; they need to be fully co-ordinated with existing 
multilateral and bilateral efforts, partic ularly in the context of the Global 
Environment Facility (GEF), the Ad aptation Fund set up under the UNFCCC and 
European initiatives such as the Globa l Climate Change Alliance (GCCA) and the 
Global Energy Efficiency and Renewable Energy Fund (GEEREF). Their objective 
is to support credible national mitigati on and adaptation plan s that include low-
carbon objectives and could teach helpful lessons in the post-2012 financing arrangements related to climate change. 
The sources of funding for the adaptati on and mitigation needs of developing 
countries are likely to be multiple. There is  scope and a need for multilateral and 
bilateral initiatives, and coordination and cooperation will have to be improved. In 
this respect, the situation for climate fina nce is not fundamentally different from 
other areas of development finance, such as health or infrastructure.   
 
EN 45   EN Additional resources made available to cope with climate change should be 
mobilised in line with the established princi ples of aid effectiveness. Climate finance 
and other development finance should be fu lly integrated into national development 
plans and strategies, including poverty re duction strategies where applicable. 
Climate change is not the only envir onmental challenge to achieving MDG7. 
Biodiversity and ecosystems must be preser ved as they provide essential services 
(water, forest biomass, soil fertility, tops oil, etc), on which the poorest are the most 
dependent. Desertification has become a ma jor threat to biodiversity and a major 
cause of loss of productive capacity all over the world. Deforestation must be 
addressed: Many in the developing worl d are dependent on forests for their 
livelihood and their contri bution to maintaining forests, in  particular trop ical forests, 
is paramount for safeguarding environmenta l sustainability. The magnitude of the 
investments needed is very substantial and available reso urces should be used to 
tackle the environmental problems coherently. 
8.2. The follow-up to the EU position for Doha and Poznan31: 
• In line with the 2007 Bali Action Programme , the EU should contribute its fair 
share to the financing needed for mitigati on and adaptation to climate change in 
developing countries and to  delivering financing effi ciently, effectively and 
equitably. 
• The EU confirmed that it will work for the effective implementation of the GCCA 
between the EU and poor developing countri es most vulnerable to climate change 
and will explore ways to mobilise new financial resources to tackle climate change and combat its negative impact. 
• The EU is ready further to explore th e contribution that innovative sources of 
funding can make to helping developing countries cope with climate change. 
• As regards the Clean Development Mech anism the EU is willing to promote a 
more balanced geographical distribution of financing moving from a pure project 
focus to a sectoral approach. 
• In the context of efforts to promote en ergy security and sustainability, the EU 
should continue to promot e energy efficiency and renewable energy and pay 
careful attention to the sustainability of  bio-fuels as one s ource of renewable 
energy. 
9. C
ONCLUSIONS  
The Doha Conference was a success, but it also poses a challenge to the EU to build 
and deliver on its results. Europe needs to harness D oha's positive dynamism and 
carry it forward in the global partnershi p which was strongly reaffirmed. The EU 
must play its part and show the leadership  needed to make live up to the promise of 
Doha. The EU should place the follow-up to Doha in a broader context, bridging the 
                                                 
31 Council Conclusions (ENVIRONMENT) of 20.10.2008 and (GAERC) of 11.11.2008 
 
EN 46   EN other major development even ts in 2008 (in Accra, on ai d effectiveness and the UN 
high-level events on Africa and MDGs) and also the discussion on global governance 
issues initiated by the G20 summit in November 2008 and further pursued by the 
London Summit in April 2009. The following measures require specific attention of the Commission and the EU Member States: 
• First and foremost, the EU needs to keep  to its collective and individual ODA 
pledges based on the main collective commitment of 0.56% of ODA/GNI for 
ODA by 2010 and 0.7% by 2015. On that basi s, the EU should argue for fairer 
burden-sharing with other donors and expect others to meet and upgrade their pledges. 
• The EU needs to be innovative with fina ncing development in all its forms, 
including adaptation for climate change particularly in the poorest developing 
countries. The implementation of the Doha Declaration implementation and 
UNFCCC processes need to move forward together. Copenhagen 2009 will not succeed without a sound solution on adaptation. 
• There is a need to bridge the Doha resu lts with the process of reform of global 
governance structures to make them more inclusive. 
This report provides a baseline  for monitoring future pr ogress by the EU in those 
areas in which it has given new major commitments, namely (i) on governance 
issues, especially with regard to the EU priority to tackle  taxation as part of the 
broader governance agenda, which offers potential for further mobilisation of 
domestic resources and ; (ii) on foreign direct investment with obligations on 
improved transparency, accountability, co rporate social responsibility and 
compliance with anti-corruption laws, labour and environmental standards. 
 
EN 47   EN ABBREVIATIONS 
ACP: 
AFT: 
AMC: 
AT: 
AWEPA 
BCPR:  
 
BE: 
BG: 
CIAT: 
CIF: 
CSR: 
CY: 
CZ: 
DAC: 
DE: 
DK: 
DRR: 
DRRP:  
DSF: 
DTC 
EBRD: 
EC: 
ECOFIN 
EDF: 
EE: 
EIB: 
EIF: 
EITI 
EL: 
ENP: 
EPA: 
ES: 
ETS: 
EU-27:  
FAO: 
FFD 
FI: 
FLEGT: 
FLEX: 
 
FoS: 
FR: 
FFD: 
FSF: 
G 8: 
 African, Caribbean and Pacific Stat es, party to the Cotonou Agreement 
Aid for Trade 
Advance Market Commitment 
Austria 
Association of European Parliamentarians for Africa 
United Nations Development Programme's  Bureau for Crisis Prevention and 
Recovery 
Belgium 
Bulgaria 
Centro International de  Agricultura tropical 
Climate Investment Funds 
Corporate social responsibility 
Cyprus 
Czech 
Development Assistance Committee of the OECD 
Germany 
Denmark 
Disaster risk reduction 
Disaster Risk Reduction Prevention 
Debt Sustainability Framework 
Double Tax Convention 
European Bank for Reconstruction and Development 
European Community 
Economic and Financial Affairs Council 
European Development Fund 
Estonia 
European Investment Bank 
European Investment Fund 
Extractive Industries Tr ansparency Initiative 
Greece 
European Neighbourhood Policy 
Economic Partnership Agreement 
Spain 
Emission Trading Scheme 
European Union 
Food and Agriculture Organisation 
Financing for Development 
Finland 
Forest Law Enforcement, Governance and Trade 
The EU instrument to compensate African, Caribbean and Pacific (ACP)
countries for short term fluc tuations in export earnings 
Framework of Standards 
France 
Financing for Development 
Financial Stability Forum 
Group of Eight (Summit of Canada, France, Germany, Italy, Japan, Russia,
United Kingdom and United States) 
 
EN 48   EN GAERC 
GCCA 
GDP: 
GEEREF: 
GEF: 
GFDRR: 
GIIF: 
GNI: 
GPG: 
HIPC: 
HU: 
IBRD: 
ICF: 
IDA: 
IDB: 
IDLO: 
IE: 
IFF: 
IFFI: 
IFI: 
IFM: 
ILO: 
IMF: 
IPG: 
ISDR: 
ISO26000 
IT: 
ITC: 
LDC: 
LT: 
LU: 
LV: 
MDG: 
MDRI: 
MDTF: 
MTOs 
MoU: 
MS: 
MT: 
NAPA: 
NGO: 
NL: 
ODA: 
OECD: 
PGA: 
PL: 
PSD: 
PT: 
REDD: 
RO: General Affairs and External Relations Council 
Global Climate Change Alliance 
Gross Domestic Product 
Global Energy Efficiency and Renewable Energy Fund 
Global Environment Facility 
Global Facility for Disaster Risk Reduction 
Global Index Insurance Facility 
Gross National Income 
Global Public Goods 
Heavily Indebted Poor Countries 
Hungary 
International Bank for Reconstruction and Development 
Investment Climate Facility for Africa 
International Development Association 
Inter-American Development Bank 
International Development Law Organisation 
Ireland 
International Financial Facility 
International Finance Facility for Immunisation 
International Financial Institution 
Innovative Finance Mechanisms 
International Labour Organisation 
International Monetary Fund 
International Public Goods 
International Strategy for Disaster Reduction 
Standard on Social responsibility 
Italy 
International Tax Compact 
Least Developed Countries 
Lithuania 
Luxembourg 
Latvia 
Millennium Development Goals 
Multinational Debt Relief Initiative 
Multi-Donor Trust Fund of World Bank 
Money Transfer Operators 
Memorandum of Understanding 
Member States 
Malta 
National Adaptation Programmes of Action 
Non-Governmental Organisation 
The Netherlands 
Official Development Assistance 
Organisation for Economic Cooperation and Development 
President of UN General Assembly 
Poland 
Payment Service Directive 
Portugal 
Reducing emissions from defo restation and degradation 
Romania 
 
EN 49   EN SE: 
SI: 
SIDS: 
SK: 
SME: 
Stabex: 
STAR: 
SYSMIN: 
TIEAs: 
UK: 
UN: 
UNDEF: 
UNDP: 
UNGA: 
UNFCCC: 
UNITAID: 
UNODC: 
UNSC:  
WB: 
WCO: 
WFP: 
WHO: 
WTO: 
 Sweden 
Slovenia 
Small Island Developing States 
Slovakia 
Small and medium-sized enterprises 
System to Stabilise Export Earnings 
Stolen Assets Recovery Initiative 
Special assistance measure for the ACP mining 
Tax Information Exchange Agreements 
United Kingdom 
United Nations 
United Nations Democracy Fund 
United Nations Development Programme 
United Nations General Assembly 
United Nations Framework Convention on Climate Change 
United Nations International Drug Purchase Facility 
United Nations Office on Drugs and Crime 
United Nations Security Council 
World Bank 
World Customs Organisation 
World Food Programme 
World Health Organisation 
World Trade Organisation 
 
 
EN 50   EN Annex 1: UN Convention against Corruption (Merida Convention) - State of signature 
and ratification by the EU (on 15.03.2009)  
Country signature ratification, acceptance 
(A), approval (AA), 
Accession (a); Succession 
(d) 
AT 10 Dec 2003   11 Jan 2006   
BE 10 Dec 2003   25 Sep 2008  
BU 10 Dec 2003   10 Oct 2006  
CY 9 Dec 2003  23 Feb 2009  
CZ 22 Apr 2005   
DK 10 Dec 2003  26 Dec 2006  
EE   
FI 9 Dec 2003  20 Jun 2006 A  
FR 9 Dec 2003  11 Jul 2005  
DE 9 Dec 2003   
EL 10 Dec 2003  17 Sep 2008  
HU 10 Dec 2003  19 Apr 2005  
IE 9 Dec 2003   
IT 9 Dec 2003   
LV 19 May 2005  4 Jan 2006  
LT 10 Dec 2003  21 Dec 2006  
LU 10 Dec 2003  6 Nov 2007  
MT 12 May 2005  11 Apr 2008  
NL 10 Dec 2003  31 Oct 2006 A  
PL 10 Dec 2003  15 Sep 2006  
PT 11 Dec 2003  28 Sep 2007  
RO 9 Dec 2003  2 Nov 2004  
SK 9 Dec 2003  1 Jun 2006  
SI  1 Apr 2008 a  
ES 16 Sep 2005  19 Jun 2006  
SE 9 Dec 2003  25 Sep 2007  
UK 9 Dec 2003  9 Feb 2006  
EC 15 Sep 2005  12 Nov 2008 AA  
. 
 
EN 51   EN Annex 2: The Commission methodology applie d for analysing ODA indications of EU 
Member States:   
Figures on Official Development Assistance (ODA) in current prices have been taken 
from the OECD Development Assistance Committee (DAC) for the years 2007 and 
2008 for those Member States which repor t to the DAC and for which the DAC 
publishes ODA information.  
For those Member States for which public  DAC information on ODA volumes is not 
available, figures for 2007 and 2008 are take n from Member States' replies to the 
annual "Monterrey" survey organised by the Commission.  
For ODA volumes for the year 2009 and beyond,  ODA figures have been taken from 
Member States’ replies. For Members St ates which indicate ODA in national 
currencies the Commission’s annual average ex change rates of the respective years 
will be applied to convert them into eu ro. Up to 2010, the exchange rates are taken 
from the Commission’s autumn 2008 foreca st and, beyond that, nominal exchange 
rate stability is assumed. Where a Member State presents only the ODA/GNI ratio, 
ODA will be calculated by multiplying it with the Commission’s projected GNI figure 
for that country. Where a Member State has given  both an ODA amount and the 
ODA/GNI ratio, the Commission has given preference to using the ODA amount 
as this gives a better indi cation of where the achieveme nt of ODA/GNI targets is 
sensitive to differing assumptions on GNI.  Where information on both ODA and 
ODA/GNI ratio was missing the Commission assumed that the ODA/GNI targets for 
2010 (0.51% for EU-15 Member States and 0.17%  for Member States that joined the 
EU after 2002) and 2015 (0.7% for EU-15 Member States and 0.33% for Member 
States that joined the EU after 2002) would be achieved and by multiplying them 
with the Commission’s GNI figures to de rive the ODA volume amount. For the 
remaining years the Commission calculated the missing ODA figures by distributing 
the absolute difference between the ODA volume of the latest year for which 
information was provided and the ODA vo lume required to meet the 2010 and 2015 
targets equally over these years (simulating a linear increase). 
Figures for Gross National Income (GNI) in current prices are outcome for 2007, 
estimates for 2008 and calcul ations based on GDP fi gures from the January  2009 
interim forecast for the years 2009 and 2010. GNI figures for the years 2011 to 2013 
have been calculated by applying the Commi ssion’s country-specif ic projections of 
nominal GDP growth rates. The Commissi on’s projections are based on potential 
output growth estimates until 2015, whic h were also used for the purpose of 
budgetary calculations in the context  of the EU financial framework 2007-2013 
 
EN 52   EN Annex3: Africa – infrastructure priorities  
The Infrastructure Partnership, defining the con tinental priorities for strengthening regional 
integration and social and ec onomic development of Africa, was endorsed by the Council (17 
October 2006) and by the African Union, most  recently at the AU Summit in February 2009. 
African countries were encouraged to back  these priorities at the national level. 
1. Transport 
Eight Trans-African transport corridors were iden tified as the main continental axes that will 
be promoted in the context of the EU-Africa In frastructure Partnership. These corridors are: 
Dakar N'djamena 
Nouakchott Lagos 
Khartoum Djibouti 
Lagos  Mombasa 
Le Caire Gaborone 
N'djamena Windhoek 
Beira  Lobito 
Dar Es Salam Kigali 
2. Energy 
The Partnership refers to the electricity interconnections in Africa, notably to the projects of 
continental relevance identifie d by NEPAD and the five regional power pools (the Maghreb 
Union (COMELEC), the Southern Africa Power Pool (SAPP), the West  Africa Power Pool 
(WAPP), the Central Africa Power Pool (CAPP) and the Eastern Africa Power Pool (EAPP)). 
The power pools include national utilities of member countries  that are responsible for 
optimising use of regional energy resources a nd country-to-country support during an energy 
crisis. The power pools are based on a multit ude of legal documents, such as inter-
governmental, inter-utility agreements, agreemen ts between operating members and operating 
guidelines.  
3. ICT 
Following priorities have been identified in th e Partnership and deserv e specific attention in 
the short term:  
– African Internet Exchange System, facilitating the use of internet across the 
continent 
– Africa Connect, connect sub-Saharan Africa to the European high-speed 
education network - GEANT 
– GMES-Africa, extending  Earth Observation capacities and applications to the 
African Continent. 
 
EN 53   EN Annex 4 – Infrastructure prioriti es: Union for the Mediterranean   
I. ENP - Barcelona process - Union for the Mediterranean.  
At the Paris Summit in July 2008 the follo wing priority areas were identified:  
– De-pollution of the Mediterranean . The implementation of this programme, building on 
the Horizon 2020 strategy, will have an important  infrastructural dimension. It will focus 
on coastal protection, construc tion of water treatment plants and pipelines, improving 
urban sewage systems, construction of wast e and re-cycling units and relative access 
infrastructures.  
– Maritime and Land Highways and South-South integration . This sectoral strategy will 
focus on the development of “highways for commerce” and “motorways of the sea”. This would include connection of ports, the creation of coastal motorways, the modernization of 
trans-Maghreb train and the construction of infrastructures relevant for trade integration, maritime safety and handling of goods, in a perspective of global integration in the 
Mediterranean region.  
– Alternative energies . This strategy will focus on the development of a Mediterranean 
Solar Plan, taking into account that alternative sources of energy are a priority in the 
Mediterranean region. 
Moreover, during the 5
th Euro-Mediterranean Ministerial Conference on Energy in Limassol, 
on 16-17 December 2007, the Energy Ministers adopt ed the "Priority Action Plan for Euro-
Mediterranean Energy Cooperation 2008-2013". The Ministerial meeting ag reed on a list of 
priority interconnections  and infrastructure projects of common interest in the region. For 
North Africa that this relates to: 
– The Trans Saharan Gas Pipeline “TSG P” Nigeria-Algeria-Spain-Italy; 
– The North African branch of the Medite rranean Energy Ring– both natural gas and 
electricity.