Official Journ alof the EuropeanUnion 26.9.2009
RESOLUTION OF  THE EUROPEAN PARLIAMENT
of 23 
April 2009
with observations forming an integral part of the decision on discharge in respect of the 
implementation of the bu dget 
of the Seventh, Eighth and Ninth Eu ropean 
Dev
elopment F unds 
for the 
financial year 2007
THE EUROPEAN PARLIAMENT,
—having reg ard to the Commission  report on the follow-up to the 2006 discharg e decisions (COM(2008) 
629 and 
its annex 
SEC(2008) 
2579), 
—having 
regard 
to the financial 
statements 
and 
revenue 
and 
expenditure 
accounts 
for the Seven th, 
Eighth 
and 
Ninth 
European 
Developmen t 
Funds 
for the fin an
cial year 2007 (COM(2008) 490 — C6-0296/2008), 
—having 
regard 
to the report on  
the financial 
management 
of the Seven th, 
Ei
ghth 
and 
Ninth 
European 
Developmen t 
Funds 
for the year 2007 (COM(2008) 224), 
—having 
regard 
to the Court of Auditors’ an nual 
report on 
the activities fun ded 
by 
the Seventh, 
Eighth 
and 
Ninth 
European 
Developmen t 
Funds 
concerning 
the financial 
year 2007, together with the Commission ’s 
replies
(1) OJ C 286, 10.11.2008, p. 273. (1), 
—having 
regard 
to the statemen t 
of assuran ce 
as to the reliab ility 
of the accoun ts 
and 
the legality 
and 
regu­
larity 
of the underlying 
transactions 
provided b y 
the Court of Auditors pursuan t 
to Article 248 of the E C 
Treaty
(2) OJ C 277, 31.10.2008, p. 243. (2), 
—having 
regard 
to the Coun cil’s 
recommen dations 
of 10 February 
2009 (5042/2009 — C6-0057/2009, 
5044/2009 — C6-0058/2009, 5045/2009 — C6-0059/2009), 
—having 
regard 
to the Partn ership 
Agreement 
between 
the memb ers 
of the African , 
Caribbean 
and 
Pacific 
Group of States of the on e 
part, and 
the European 
Community 
and 
its Member 
States, of the other part, 
signed 
in 
Cotonou 
on 23 
June 
2000
(3) OJ L 317, 15.12.2000, p. 3. (3) and revised in  Luxembourg on 25  June 2005
(4) OJ L 287, 28.10.2005, p. 1. (4), 
—having 
regard 
to Council 
Decision 
2001/822/E C 
of 27 Novemb er 
2001 on 
the association  
of the over­
seas coun tries
 and
 territories with the European Commun ity
 (the Overseas Association Decision )
(5) OJ L 314, 30.11.2001, p. 1 an d OJ  L 324, 7.12.2001, p. 1. (5), 
amended 
by 
Council 
Decision 
2007/249/E C 
of 19 March 2007
(6) OJ L 109, 26.4.2007, p. 33. (6), 
—having 
regard 
to Article 33 of the I nternal 
Agreement 
of 20 Decemb er 
1995, between 
the represen tatives 
of 
the governments 
of the Memb er 
States meetin g 
within 
the Council, 
on 
the financing 
and 
administra­
tion 
of the Commun ity 
aid under 
the Secon d 
Financial 
Protocol to the fourth ACP-E C 
Convention
(7) OJ L 156, 29.5.1998, p. 108. (7), 
—having 
regard 
to Article 32 of the I nternal 
Agreement 
of 18 Septemb er 
2000, between 
representatives 
of 
the governments 
of the Memb er 
States meetin g 
within 
the Council, 
on 
the financing 
and 
administration 
of 
Community 
aid under 
the Financial 
Protocol to the Partn ership 
Agreemen
t between 
the African , 
Car­
ibbean 
and 
Pacific States an d 
the European 
Community 
and 
its Member 
States signed 
in 
Cotonou 
(Benin) 
on 23 
June 
2000, and 
the allocation  
of financial 
assistance 
for the Overseas Coun tries 
and 
Territories to 
which Part Four of the E C 
Treaty applies
(8) OJ L 317, 15.12.2000, p. 355. (8), 
—having 
regard 
to Article 276 of the E C 
Treaty,N E 8 9 / 5 5 2 L
Official Journ alof the EuropeanUnion L 255/99
 —having 
regard 
to Article 74 of the Fin anc
ial Regu
lation 
of 16 June 
1998 applicab le 
to developmen t 
financ
e 
cooperation  
under 
the fourth ACP-E C 
Convention
(1) OJ L 191, 7.7.1998, p. 53. (1), 
—having 
regard 
to Article 119 of the Fin ancial 
Regulation 
of 27 March 2003 applicab le 
to the Nin th 
Euro­
pean 
Developmen t 
Fund
(2) OJ L 83, 1.4.2003, p. 1. (2), 
—having 
regard 
to Rules 70 an d 
71, third in dent 
of, and 
Annex 
V to, its Rules of Procedure, 
—having 
regard 
to the report of the Committee on  
Budgetary 
Control 
and 
the opinion 
of the Committee on  
Developmen t 
(A6-0159/2009),
A. whereas the E uropean Developmen t Fund (EDF) is the European Union’s most importan t financial instru­
ment 
for developmen t 
cooperation  
with the African , 
Caribbean 
and 
Pacific States,
B. whereas the total amoun t of aid chan nelled through the EDF will increase considerably over the comin g 
years 
since 
the amoun t 
of Commun ity 
aid under 
the 10th E DF 
for the period 2008 to 2013 has b een 
set 
at EUR 21 
966 000 000 which represen ts 
a 62 % increase 
compared with the fin an
cial allocation s 
under 
the 
Ninth 
EDF,
C. whereas b udget support is an  aid instrument which requires a paradig m shift in parliamen tary oversight 
moving 
from control 
over inputs 
to check 
of results an d 
outputs,
D. whereas it is determin ed continuously to develop its oversig ht capacities in  order to fulfil as efficien tly as 
possible 
its obligations 
as discharg e 
authority,
1. Agrees
 with the Commission that ‘weak admin istrations
’ and
 ‘weak gover
nance
’ in many
 beneficiary
 
countries
 are significant
 risks
 affecting
 the sound man agement
 of the EDF
s (Commission ’s
 replies to 
points 
1 to 5 of the Court of Auditors’ An nual 
Report on  
the activities fun de
d by 
the EDFs);
2. Invites 
the Commission  
— when ‘
fine-tuning
’ its control 
strategy 
(points 1 to 5 of the An nual 
Report on  
the 
EDFs) 
— to iden tify 
the point 
where lack  
of results an d 
the costs of con tr
ol call for a policy chan ge;
3. Takes 
the view that the implemen tation 
strategy 
for the 10th E DF 
(EUR 21 
966 000 000 for the period 
from 2008 to 2013) should focus on  
areas of crucial importan ce 
for ensuring 
sustainable 
developmen t; 
encourages 
the Commission  
to prioritise an d 
avoid proliferation ;
4. Believes 
that the Commission , 
in 
an 
effort to prioritise an d 
concentrat
e its developmen t 
activities, could 
look 
for opportun ities 
to increase 
assistance 
to low-income 
countries;
5. Points 
out that due atten tion 
must be 
paid to the sustain ability 
of the Commission ’s 
interventions, 
includ­
ing 
the formulation  
of a clear exit strateg y 
and 
monitoring 
of implemen tat
ion; 
considers 
that the en hanced 
evaluation  
of results represen ts 
a major factor for en suring 
the democratic leg itimacy 
of EU 
developmen t 
cooperation ;
Financial 
implementation
6. Welcomes the Commission ’s 
performan ce 
in 
2007, and 
notes that paymen ts 
increased 
by 
12 % and 
com­
mitments 
by 
9 %, whereas the in crease 
in 
outstanding 
commitmen ts 
was kept 
down 
to 2,8 %; con siders 
the 
implemen tation 
rate of 3,7 years as acceptab le 
given 
the increase 
in 
efficiency;
7. Welcomes 
the commitmen t 
of all availab le 
funding 
for the Nin th 
EDF 
in 
2007; calls on  
the Commission  
to 
formulate recommen dations 
applicable 
for the non-committed 
parts of the E ighth 
EDF; 
stresses how­
ever that speedy commitmen t 
of funds 
should not 
be 
carried out to the detrimen t 
of the quality of 
projects;N E 9 0 0 2 . 9 . 6 2
Official Journ alof the EuropeanUnion 26.9.2009
8. Recalls the Commission ’s commitmen t
(1) Commission  Declaration  concerning Article 5 DCI , Annex to the commun ica tion from the Commission  to the Euro­
pean 
Parliamen t 
of 24 Octob er 
2006 (COM(2006) 628). (1) to endeavour to ensure that a benchmark of 20 % of its allo­
cated 
assistance 
under 
the Developmen t 
Cooperation  
Instrument 
(DCI) 
is dedicated to b asic 
and 
second­
ary
 education an d
 basic
 health; calls for reportin g
 against
 the same b ench
mark to b e
 provided for the 
EDFs;
9. Expresses 
concern 
at the findings 
contained 
in 
the Court of Auditors’ Special Report No 10/2008 on  
EC 
Developmen t 
assistance 
to health services in  
sub-Saharan 
Africa, which poin ts 
out that ‘Financial 
alloca­
tions 
to the health sector in  
sub-Saharan 
Africa have n ot 
increased 
since 
2000 as a proportion  
of its total 
developmen t 
assistance 
despite the Commission ’s 
MDG commitmen ts
 and 
the health crisis in  
sub-Saharan 
Africa
’; calls on 
the Commission  
to prioritise support to health systems an d 
identify 
the most appropri­
ate aid delivery in struments 
for this area;
The Commission’s financial management of the ED Fs
10. Notes 
with satisfaction  
that in 
the Court’s opinion  
the abovementione
d Commission ’s 
report on 
the finan­
cial 
management 
of the Seven th, 
Eighth 
and 
Ninth 
European 
Developmen t 
Funds for the year 2007 pre­
sents ‘
an 
accurate description  
of the achievemen ts 
of the objectives 
for the fin ancial 
year, the fin ancial 
situation 
and 
the events 
that had a sig nificant 
influence 
on 
the activities carried out in  
2007’ (poin t 
13 of 
the Annual 
Report on  
the EDFs);
11. Regrets 
however that the Commission ’s 
follow up to ob servations 
made by the Court in  
a number 
of cases 
is inadequate; 
stresses that the Commission ’s 
action 
on 
the Court’s recommen dations 
is an 
important 
ele­
ment 
of accoun tability 
for the discharg e 
authority; welcomes the fact that the Commission  ‘
will provide 
more detailed in formation 
in 
the future’ (poin t 
13 of the An nual 
Report on  
the EDFs);
The 
Court 
of Auditors’ 
Statement of Assu rance
Reliability 
of the accounts
12. Notes that, pursuan t 
to Articles 1 an d 
103(3) of the Fin ancial 
Regulati
on 
of 27 March 2003 applicab le 
to 
the Ninth 
European 
Developmen t 
Fund, 
the Statemen t 
of Assuran ce 
does not 
extend 
to the part of the 
Ninth 
EDF 
resources (E UR 2 
200 000 000) that is man aged 
by 
the EIB 
and 
for which the E IB 
is respon­
sible 
(footnotes 
2 and 
11 of the An nual 
Report on  
the EDFs);
13. Notes 
that the Court is of the opin ion 
that the fin al 
annual 
accounts 
of the Seven th, 
Eighth 
and 
Ninth 
EDFs 
fairly presen t, 
in 
all material respects, the fin ancial 
position 
of the EDFs 
as of 31 Decemb er 
2007 
(paragraph 
VI, 
Statement 
of Assuran ce);
14. Notes 
that the Court draws atten tion 
to the fact that the validity of the assumption s 
used for the estimate 
of the provision  
for costs in curred 
has not 
been 
demonstrated 
by 
the Commission  
and 
that this may lead 
to an 
understatement 
of accrued expen diture 
as well as to an  
overstatemen t 
of the amoun t 
of guarantees 
disclosed 
in 
the notes 
to the financial 
statements 
(paragraph 
VII, 
Statement 
of Assuran ce);
Legality 
and regularity of the underlying transactions
15. Notes that:
—in 
the Court’s opin ion, 
the transactions 
underlying 
the revenue 
and 
commitmen ts 
for the fin ancial 
year 
are, taken 
as a whole, leg al 
and 
regular 
(paragraph 
VIII, 
Statement 
of Assuran ce), 
whilst the Court 
draws atten tion 
to the high 
fiduciary risk  
with regard 
to budget 
support resultin g 
from the Commis­
sion’s ‘
dynamic 
interpretation
’ of the elig ibility 
criteria (parag raph 
X, Statemen t 
of Assuran ce),N E 0 0 1 / 5 5 2 L
Official Journ alof the EuropeanUnion L 255/101
 —the Court’s audit revealed ‘a material level of errors’ affectin g 
transa
ctions 
underlying 
payments 
(para­
graph 
IX, 
Statement 
of Assuran ce),
 
—the Court foun d 
that the Commission  
has introduced 
improvemen ts 
as regar
ds its supervisory an d 
control 
systems an d 
states that there is still room for improvemen t;
Comments 
on the information presented by the Cou rt 
in support 
of its Statement of Assu rance
Scope 
of the audit
16. Notes that the Court’s ob servations 
regarding 
the legality and reg ula
rity of the un derlying 
transactions 
are 
based 
on:
(a) an 
evaluation  
of the supervisory an d 
control 
systems at E uropeAid’s 
central 
services an d 
in 
five del­
egations 
covering 
six countries;
(b) an 
audit of 90 paymen ts 
and 
15 individual 
legal 
commitmen ts;
(c) as 
regards 
budget 
support, an  
examination 
of 30 paymen ts 
and 
15 financi
al commitmen ts 
statisti­
cally selected;
(d) an 
examination 
of 30 statistically selected paymen ts 
authorised b y 
Eu
ropeAid’s cen tral 
services;
(e) an 
examination 
of 30 statistically selected tran sactions 
already check ed 
ex post by 
EuropeAid’s 
cen­
tral 
services;
(f) an 
examination 
of 30 statistically selected fin ancial 
commitmen ts; 
and
(g) an 
examination 
of the An nual 
Activity Report an d 
the declaration  
by 
the Director-Gen eral 
of Euro­
peAid 
(point 
15 of the An nual 
Report on  
the EDFs);
Reliability 
of the accounts
17. Regrets 
that the Commission  
is still not 
able 
to give 
full accoun ting 
information  
due to techn ical 
diffi­
culties; notes 
the Commission ’s 
reply accordin g 
to which the ‘introducti
on 
of the new 
accounting 
system 
as from 2009 will overcome curren t 
limitation s
’ (point 
16 of the An nual 
Report on  
the EDFs); 
welcomes 
the introduction 
of the ABAC-E DF 
system in 
February 
2009;
18. Notes the Court’s recurren t 
remark 
concerning 
the validity of the Commission ’s 
statistical approach used 
to estimate the provision for costs in curred
 in the reportin g
 period for which n o
 invoices
 have been
 
received at year-en d; 
further notes 
that this provision  
amounts 
to EUR 2 
087 000 000 or 83 % of total 
liabilities 
(point 
17 of the An nual 
Report on  
the EDFs); 
invites 
the Commission  
to continue 
to fine-tune 
and 
improve its approach;
Legality and regularity of the underlying transactions
19. Notes the differen ce
 of opinion
 between
 the Commission an d
 the Court as reg ards
 the momen t
 when 
financing
 agreements
 should b e
 ‘drawn up’  and
 ‘signed
’ (point
 19 of the An nual
 Report on the E DFs);
 
regrets 
the unclear 
message 
to the discharg e 
authority, an d 
invites 
the Commission  
to provide clarifica­
tion 
so that all parties — Commission  
and 
ACP States — have the same un dersta
nding 
of ‘drawn 
up’;
20. Notes that the Court, in  the course of check ing transactions, was unabl e to obtain the relevan t documen­
tation 
from United 
Nations 
bodies 
in 
the case of two paymen ts 
(out of a sample of eleven ); 
calls on 
the 
Commission , 
therefore, to en sure 
full complian ce 
with the fin ancial 
and 
administrative 
framework  
agreement;N E 9 0 0 2 . 9 . 6 2
Official Journ alof the EuropeanUnion 26.9.2009
21. Notes that, on  the basis of its audit results (poin ts  32 to 47 of the An nua l Report on  the EDFs), the Court 
concludes
 that EuropeAid’s
 supervisory an d
 control
 systems for the E DFs
 are only
 ‘partially effective’  
(point 
53 of the An nual 
Report on  
the EDFs);
22. Further 
notes 
that, out of n ine 
elements 
of the internal 
control 
system at cen tral 
level, six are effective, 
two are partially effective an d 
one 
element 
— quantity 
of monitoring 
missions 
— is not 
effective at all, 
and 
that out of five elemen ts 
of the internal 
control 
system at deleg ation 
level, two elemen ts 
are effective 
and 
three only 
partially effective (Tab le 
3 of the An nual 
Report on  
the EDFs
);
23. Notes that the Commission  
considers 
that ‘(g)iven 
the financial 
and 
human 
resources availab le 
to it, (…) 
it has set up con trol 
systems which provide reason able 
assurance
’ (point 
53 of the An nual 
Report on  
the 
EDFs);
24. Regards 
the Commission ’s 
answers 
as unsatisfactory 
in 
that it seems reluctan t 
to review the arran gements 
it 
has put in  
place, and 
invites 
the Commission  
to give 
more precise in forma
tion 
as to the n otion 
of ‘rea­
sonable
 assurance
’ and,
 in particular, as reg ards
 the actual cost/b enefi
t ratio of con trols
 and
 the actual 
error rate, as well as a b reakdown 
indicating 
which addition al 
human 
and 
financial 
resources are n eces­
sary 
to improve the con trol 
system in 
order to allow the Court to g ive 
the mark ‘
effective’ as the overall 
assessmen t;
25.
 Notes that the Court hig hlights
 the inadequacy
 of the con trols
 carried out b y
 supervisors or auditors, 
which indicates 
the weaknesses 
in 
the supervisory an d 
control 
systems; calls on  
the Commission , 
there­
fore, to tig hten 
up its con trols 
and, 
in 
particular, to in troduce 
a system of review of extern al 
audit reports 
to check 
their quality;
Budget support commitments and payments
26. Notes that in  
five out of 15 b udget 
support commitmen ts 
examined, 
the Court foun d:
—‘
serious weak nesses 
in 
the internal 
oversight 
of the budget, 
accounting 
systems, pub lic 
procuremen t 
or 
anti-corruption 
measures’, 
—that the failure to produce timely audited accounts an d
 the ineffectiven
ess of extern al
 control
 are
‘importan t 
matters of con cern
’, 
—that providin g 
budget 
support in  
these conditions 
implies a ‘very high 
fiduciary risk ’ (point 
26 of the 
Annual 
Report on  
the EDFs);
27. Stresses 
that the Court is of the opin ion 
that the requiremen ts 
of the Coton ou 
Agreement 
— that pub lic 
expenditure 
management 
has to be 
sufficiently 
transparent, 
accountable 
and 
effective — are n ot 
met in 
these 
five cases;
28. Recalls that ‘fiduciary risk ’ means 
that there is a risk  
that European 
taxpayers’ mon ey 
is not 
used for its 
intended 
purposes, does n ot 
achieve value for mon ey 
or is not 
properly accoun ted 
for;
29. Further n otes
 that the Commission ‘does not
 agree
 with the Court’s assessmen t
’ that commitmen ts,
 
according 
to the Commission , 
were made followin g 
an 
evaluation  
of ‘sufficient 
positive prog ress 
in 
PFM 
(public
 finance
 management)
 systems’, that the coun tries
 concerned
 subsequently
 ‘continued
 to show 
progress
’ and 
have ‘remained 
on 
track 
for further b udget 
support’ (poin t 
26 of the An nual 
Report on  
the 
EDFs);
30. Regrets 
the Commission ’s 
reply in 
so far as it does n ot 
reflect the seriousn ess 
of the Court’s fin dings 
(importan t 
matters of ‘concern
’, very high 
fiduciary risk ); 
considers 
the use of open -ended 
and 
non-result-
based 
expression s 
like ‘
sufficient
’, ‘progress
’ and ‘
on 
track’ in 
this serious con text 
to be 
inadequate, 
if not 
superficial;
31. Invites 
the Commission  
to provide the eviden ce 
on 
which it has b ased 
its conclusions 
and 
to present 
it in 
such 
a way that it is clear how much progress has b een 
made (from where to where) an d 
why this amoun t 
of 
progress 
was considered ‘
sufficient
’;N E 2 0 1 / 5 5 2 L
Official Journ alof the EuropeanUnion L 255/103
32. Notes that in  seven out of 33 fin ancing agreements examined, the Court foun d that the provision s of the 
financing 
agreements 
for budget 
support were in complete 
or unclear 
in 
so far as they did n ot 
contain 
the 
general 
conditions 
for budget 
support, amb iguously 
defined 
the method for the calculation  
of the 
amounts 
for disbursement 
or referred to commitmen ts 
made by 
government 
without defin ing 
a due date 
and 
the consequences 
when 
these commitmen ts 
are not 
met (poin t 
27 of the An n
ual Report on  
the EDFs); 
also notes
 that the Commission ‘will (…) seek to further improve the quality of fin ancing
 agreements
 
under 
the 10th E DF
’;
33. Notes, as reg ards 
budget 
support paymen ts, 
that the un derlying 
transa
ctions 
are ‘affected b y 
a material 
level of error’ (poin t 
52(b) 
of the An nual 
Report on  
the EDFs) 
due to:
—calculation s 
of amoun ts 
for disbursement 
based 
on 
a positive con clusion 
as regards 
progress 
in 
pub­
lic 
finance 
management 
which is n ot 
consistent 
with the un derlying 
assessmen t 
of the situation ,
 
—use of a calculation  
method n ot 
provided for b y 
the financing 
agreement,
 
—payments 
made without up-to-date reports con cerning 
public 
finance 
management 
being 
available 
(point 
28 of the An nual 
Report on  
the EDFs);
34. Also 
notes 
the followin g 
findings 
by 
the Court in  
relation 
to six out of 30 paymen ts 
examined:
—failure 
by 
the Commission  
to demon strate 
in 
a structured an d 
formalised way whether the paymen t 
conditions 
relating 
to public 
finance 
management 
were met, 
—assessmen t
 of progress
 being
 unreasonably
 optimistic or based on outdated or in appropriate
 
information,
 
—conclusions 
not 
supported b y 
underlying 
information,
 
—reliance 
put on 
future occurren ces 
rather than  
on 
events 
that had tak en 
place, 
—inaccurate 
appraisal of in dicators 
(point 
29 of the An nual 
Report on  
the EDFs);
35. Notes the Commission ’s
 reply, accordin g
 to which ‘the Commission b alances
 the prog ress
 made, the 
political commitmen t 
to reform an d 
the remain ing 
areas of con cern 
to arrive at an  
informed 
decision’ 
(Commission ’s 
reply to poin t 
29 of the An nual 
Report on  
the EDFs);
36. Is 
worried b y 
the Court’s fin dings, 
but 
even 
more by 
the Commission ’s 
replies, which show that the Com­
mission 
is very reluctan t 
to share the in formation 
on 
which its decision s 
on 
budget 
support are b ased;
Effective 
parliamentary oversight
37. Believes that the decision  
on 
use of budget 
support as a developmen t 
aid instrument 
fully falls within  
the 
powers of the executive an d 
that budgetary 
support operation s 
should not 
require prior parliamen tary 
approval;
38. Notes 
that parliamen tary 
assessmen t 
of budget 
support should n ot 
focus only 
on 
the risks 
but 
also on 
the 
benefits, 
as well as on  
the risks 
and 
benefits 
of alternative 
aid delivery; n otes 
further that tradition al 
project 
approaches used over several decades have n ot 
delivered what was expected;
39. Believes that the ultimate aim of parliamen tary 
oversight 
is to achieve aid effectiven ess, 
which mean s 
the 
effective, econ omic, 
legal 
and 
regular 
use of aid to produce sustain able 
developmen t, 
and 
considers 
the 
oversight 
of budget 
support to b e 
a part of its g eneral 
efforts in 
overseeing  
the effectiven ess 
and 
the results 
of overall developmen t 
spending;N E 9 0 0 2 . 9 . 6 2
Official Journ alof the EuropeanUnion 26.9.2009
40. Regrets that it does n ot have sufficien t useful, comprehen sive and reliable information in order to carry 
out an 
effective oversig ht 
of budget 
support results;
41. Calls for the en ding 
of the previous system of con secutive 
EDFs 
by 
means 
of the full con solidation 
of the 
financing 
of EU/ACP 
cooperation  
in 
the EU 
budget 
in 
order to en sure 
parliamen tary 
oversight 
of the allo­
cation 
of resources un der 
the EDFs;
Annual 
report on the u se 
of budget 
support
42. Invites 
the Commission  
to draw up an  
annual 
report on 
the use of b udget 
support — an d 
its Committee 
on 
Budgetary 
Control 
to draw up an  
own 
initiative 
report on 
this annual 
report — in cluding 
useful, com­
prehensive, 
reliable, 
analytical 
and 
evaluative, an d 
not 
only 
descriptive, in formation 
on:
—planned 
and 
disbursed 
budget 
support, 
—achievemen t 
of expected results as set out b y 
donor 
objectives 
and 
countr
y strategies,
 
—existence 
and 
quality of complemen tary 
conditions,
 
—the effectiven ess
 of the dialog ue,
 the state of don or
 harmonisation,
 the complemen tary
 capacity 
building 
which has tak en 
place and 
the effect of that capacity b uilding,
 
—achievemen t 
of improved coun try 
systems, 
—accountability 
institutions, 
public 
finance 
management 
institutions
, monitoring 
and 
evaluation  
institutions,
 
—the amoun t 
and 
rate of irreg ular 
expenditure,
 
—an 
analysis 
of the typolog y 
of irregularities 
(systemic an d 
non-systemi
c) brought 
to light 
by 
controls 
and 
audits, 
—remedial action  
taken;
43. Further 
invites 
the Commission  
to identify, 
with the utmost rig our, 
countries 
or issues in  
budgetary 
sup­
port implemen tation
 where particular parliamen tary
 attention could prove useful in improvin g
 donor
 
accountability;
44. Also 
invites 
the Commission  
to introduce 
annual 
monitoring 
of this risk ;
Assessing 
and managing risks
45. Notes that chan nelling 
funds 
through 
systems in  
developin g 
countries 
which are weak  
creates a risk  
of 
inefficiency 
and 
wastage, 
and 
that a comprehen sive 
fiduciary risk  
assessmen t 
is therefore ab solutely 
nec­
essary 
prior to startin g 
budget 
support prog rammes;
46. Recalls 
that the Commission  
is not 
using 
a system in  
which risk  
assessmen t 
results in 
a clear threshold of 
values below 
which budget 
support should n ot 
be 
given, 
but 
rather a ‘dynami
c approach’ in  
which the 
degree 
of discretion  
is much hig her;
47. Takes 
the view that the hig her 
degree 
of discretion  
in ‘
dynamic 
approach’ decision s 
on 
budget 
support 
must be 
counterbalanced 
by 
an 
equally hig h 
degree 
of transparency; 
invite
s, therefore, the Commission  
to 
make 
available 
to its Committee on  
Budgetary 
Control 
and 
its Committee on  
Developmen t 
the infor­
mation 
on 
which it b ases 
its assessmen ts;N E 4 0 1 / 5 5 2 L
Official Journ alof the EuropeanUnion L 255/105
48. Expects in particular to receive explicit in formation on the Commission ’s risk assessmen ts and analyses 
of 
government 
systems in  
developin g 
countries, 
its judgement 
of the signi
ficance 
of system weak nesses 
as 
regards 
potential 
inefficiencies 
and 
wastage 
of aid and 
estimates, quan tified 
to the exten t 
possible, 
of 
these factors, as well as in formation 
on 
measures tak en, 
or to be 
taken 
in 
future, in 
order to mitig ate 
the 
identified 
risks;
Rhetoric 
or reality
49. Notes that the respon sible 
Commission er 
Louis Michel in  
a booklet 
enti
tled ‘Budget 
support — A ques­
tion 
of mutual trust’
(1) ISBN 978-92-79-10115-1 at
http://ec.europa.eu/commission _barroso/michel/Policy/key_docume
nts/docs/NH8108406ENC_web.pdf (1) states that ‘(b)udget support an d more of it is the on ly answer. For this reason  I 
have 
decided to in crease 
the proportion  
of budget 
support from 20 % of our fun ding 
to 50 %’;
50. Invites 
the Commission er 
to review these in tentions 
until 
rhetoric has b een 
replaced b y 
reality and 
con­
clusive 
evidence, 
showing 
the extent 
to which b udget 
support has g iven 
bet
ter value for mon ey 
than 
other 
aid instruments 
or has had an  
impact on  
income 
poverty is availab le;
51. Notes 
the letter an d 
note 
from Commission er 
Louis Michel to Mr Jacek  
Uczkiewicz, 
Member 
of the Euro­
pean 
Court of Auditors, an d 
with copy to Mr Herb ert 
Bösch, Chairman  
of the Committee on  
Budgetary 
Control, 
dated 9 January 
2009 (DR/amw/S(08)0418) in  
which the Commissioner in dicates 
that:
—‘there is scope to improve the Commission ’s 
formulation  
and 
implemen tat
ion 
of budget 
support pro­
grammes 
in 
line 
with the E CA’s 
observations, 
through 
a more tran sparent, 
structured an d 
formalised 
approach’, an d
 
—‘there is scope for a more systematic atten tion 
to risk 
management 
and 
the consideration 
of appro­
priate safeg uard 
measures or con ditions
’ (page 
9 in 
the note ‘
Responding 
to the European 
Court of 
Auditors’ proposal to apply pub lic 
financial 
management 
baseline 
requiremen ts 
in 
determining 
eli­
gibility 
for budget 
support’ attached to the letter);
52. Welcomes the Commission ’s 
acceptance 
of the Court’s ob servations, 
as well as the Commission ’s 
inten­
tions, 
and 
looks 
forward to b eing 
informed 
of the detailed desig n 
and 
implemen tation 
of this ‘enhanced 
approach
’ (ibidem 
page 
1);
The European 
Court 
of Auditors
53. Invites 
the Court to in form 
it of the quality of the Commission ’s 
assessmen t 
and 
management 
of risk, 
and 
would 
welcome more performan ce 
audits assessin g 
the results of developmen t 
spending 
in 
general 
and 
budget 
support in  
particular;
Recipient cou ntry 
parliaments
54. Invites
 its Committee on Budg etary
 Control
 to establish direct con tac
ts with its sister committees in 
selected recipien t 
country 
parliamen ts 
in 
order to en courage 
and 
support their role in  
ensuring 
aid effec­
tiveness 
through 
parliamen tary 
oversight 
activities;
55. Urges 
the Commission  
to prioritise support to partn er 
countries 
to develop parliamen tary 
control 
and 
audit
 capacities, in particular when aid is provided via b udget
 support, an d
 invites
 the Commission to 
report reg ularly 
on 
progress 
achieved;
56. Is 
of the view that the in volvement 
of national 
parliamen ts, 
civil society an d 
local authorities in  
partner 
countries 
is indispensable 
for achievin g 
genuine 
ownership 
of the process; urg es 
the Commission  
to make 
every effort to improve dialog ue 
with these b odies 
at all the differen t 
stages 
of the prog ramming 
process;N E 9 0 0 2 . 9 . 6 2
Official Journ alof the EuropeanUnion 26.9.2009
Involvement of the ACP States
57. Is 
worried ab out ‘
the lack 
of involvement 
by 
the ACP States’ in  
assuring 
effective con trol 
of EDF 
expen­
diture 
and 
is disappoin ted 
that deleg ations ‘
can 
place only 
limited relian ce 
on 
the controls 
performed b y 
the 
NAO (Nation al 
Authorisin g 
Officer) admin istrations
’ (point 
36 of the An nual 
Report on  
the EDFs);
58. Notes 
that NAOs are ob ligatory 
in 
ACP States b ut 
do not 
exist in 
RELEX 
developin g 
countries; 
invites 
the 
Commission to in form
 it of the advan tages
 and
 disadvan tages
 of the EDF
 approach an d
 to assess b est
 
practices across ACP States in  
order to improve the con trol 
of EDF 
expendit
ure by 
NAO admin istrations;
59. Further 
notes 
that ‘the lack 
of capacity an d 
resources within  
NAO administration s
’ is ‘regularly 
reported 
by 
delegations
’ (point 
41 of the An nual 
Report on  
the EDFs) 
to EuropeAid’s 
central 
services; in vites 
the 
Commission  
to inform 
it of feedb ack 
given 
to delegations 
on 
this issue;
Human 
resources
60. Notes 
that, accordin g 
to the Court, the n umber 
of Commission  
staff compared to the fun ds 
committed is 
decreasing, 
and 
that no 
significant 
increase 
of staff is foreseen  
despite the forecasted sub stantial 
increase 
of 
commitmen ts 
under 
the 10th E DF 
(point 
33 of the An nual 
Report on  
the EDFs)
;
61. Fully agrees 
with the Court that there ‘is a risk 
that shortag e 
or inadeq
uate distrib ution 
of staff or un avail­
ability 
of specific sk ills 
and 
knowledge 
has an 
impact on  
the quality of the con trols, 
verification  
and 
moni­
toring
’ (point 
33 of the An nual 
Report on  
the EDFs);
62.
 Invites
 the Commission to explain how it en visages
 managing
 the tensio
n — if not
 contradiction
 — 
between 
the need 
for addition al 
human 
resources at deleg ations 
and 
its commitmen t ‘
to maintain 
stable 
staffing 
once 
all enlargement-related 
personnel 
are integrated, 
with no 
requests for n ew 
posts for the 
period 2009-2013’ an d ‘
to meet new 
staffing 
needs 
in 
key 
policy areas exclusively throug h 
redeploymen t 
within 
and 
between 
departmen ts
’
(1) Report from the Commission . Planning and optimising Commission  human resources to serve E U priorities (SE C(2007)
530), 
p. 3, at http://www.europarl.europa.eu/meetdocs/2004_2009/documen ts/dv/sec_2007_5/sec_2007_530.pdf (1);
63. Takes 
the view that addition al 
human 
resources could b e 
found 
by 
abolis
hing 
the split respon sibility 
for 
developmen t 
between 
RELEX 
and 
DEV; 
invites 
the curren t 
Commission  
to take 
the necessary 
steps with 
a view to facilitatin g
 this reorg anisation
 in the new
 Commission ;
 believe
s that the curren t
 division of 
labour 
on 
developmen t 
cooperation  
between 
DEV 
and 
RELEX 
does not 
allow the Commission  
to par­
ticipate fully in  
nurturing 
international 
efforts to promote development coheren ce 
and 
aid effectiven ess; 
further 
invites 
the Commission  
to ensure 
that developmen t 
cooperation  
is unambiguously 
dedicated to 
the primary ob jective 
of poverty eradication ;
64. Calls 
on 
the Commission  
to take 
the necessary 
measures to in crease 
the numb er 
of staff allocated to the 
EDF’s 
management 
and 
control 
structures in  
view of the an ticipated 
increa
se in 
the volume of commit­
ments 
under 
the 10th E DF;
Comments 
on the Cou rt’s 
conclusions 
and recommendations
65. Notes with satisfaction  
the Court’s recog nition 
of EuropeAid’s 
efforts to develop a con trol 
strategy; 
takes 
the 
view that an  
efficient 
control 
strategy 
aims at preven ting 
errors ex ante an d 
not 
primarily at recov­
ering 
undue 
paid funds 
ex post; in vites 
the Commission  
to continue 
developin g 
its control 
strategy 
in 
the 
light 
of this approach, which is a priority for the discharg e 
authority;N E 6 0 1 / 5 5 2 L
Official Journ alof the EuropeanUnion L 255/107
66. Fully agrees  with the Court’s recommen dations  expressed in poin ts  55(a) to (g )  and  56(a) to (f) of the 
Annual 
Report on  
the EDFs; 
draws in 
particular the Commission ’s 
attention 
to the recommen dation 
set 
out in 
point 
56(a) that
‘complian ce 
with the Coton ou 
Agreement 
should be 
benchmarked 
against 
bas
eline 
requiremen ts, 
such as 
the availab ility 
of timely pub lished 
and 
audited accoun ts, 
to be 
met befor
e budget 
support is g ranted
’
and 
that set out in  
point 
56(d) that
‘EuropeAid 
should en sure, 
before 
the start of a b udget 
support prog ramme, 
that there is a clear an d 
com­
plete assessmen t 
of the pub lic 
finance 
management 
and 
that the recipien t 
country 
has a credib le 
and 
rel­
evant 
reform prog ramme 
to address all sig nificant 
weaknesses 
over a foreseeab le 
timetable
’;
therefore calls on  
the Commission  
to grant 
budget 
support on ly 
where pub li
c expenditure 
management 
is 
sufficiently 
transparent, 
accountable 
and 
effective, or is at least lik ely 
to be 
so with the implemen tation 
within
 a short time frame of a reform prog ramme;
 further poin ts
 out that the selection of financin g
 
arrangements 
for a specific sector should b e 
directly lin ked 
to their efficien cy 
for this specific area of 
intervention;
67. Invites 
the Commission  
to give 
priority to the swift implemen tation 
of these recommen dations, 
to which 
the discharg e 
authority attaches particular importan ce, 
in 
so far as clear an d 
agreed 
limits for executive 
discretion  
are indispensable 
for meaningful 
parliamen tary 
supervision;
A new approach to a new situ ation
68. Stresses 
that the recipien t 
country’s 
use of fun ds 
delivered as b udget 
support is outside the direct con trol 
of 
the Commission  
(and 
other don ors) 
since 
it is the sovereig n 
right 
of the recipien t 
country 
concerned 
to 
manage 
its budget 
in 
accordance 
with its own  
specific rules an d 
national 
budgetary 
procedures;
69. Recalls that pub lic
 sector fin ancial
 management,
 internal
 control
 and extern al
 audit fun ctions
 in some 
recipient 
countries 
are often 
not 
sufficiently 
reliable 
to ensure 
that donors’ 
funds 
are managed 
adequately 
and 
used for the in tended 
purposes;
70. Believes that the Commission , 
in 
the light 
of the growing 
attention 
giv
en 
to accoun tability 
issues and 
the 
increasing
 interest
 among
 donor
 country
 taxpayers in seein g
 concrete
 results of developmen t
 aid, has 
every interest 
in 
knowing 
the risks 
assumed when  
granting 
budget 
support an d 
in 
sharing 
this knowl­
edge 
with the discharg e 
authority, to which it is accoun table;
71. Further 
believes 
that the Commission  
should inform 
recipient 
countri
es’ administrations 
of its accoun t­
ability 
obligations 
and 
request those who man age 
funds 
downstream 
to be 
subject 
to similar ob ligations;
A 
Country 
Disclosure 
Statement
72. Takes 
the view, therefore, that developmen t 
aid in 
general 
and 
budget 
support in  
particular should be tied 
to an 
ex-ante 
disclosure statemen t, 
issued by the recipien t 
country’s 
gov
ernment 
and 
signed 
by 
the finance 
minister, 
concerning 
selected issues that affect the g overnance 
and 
accountability 
structure of a b enefi­
ciary 
country;
73. Strongly 
believes 
that a recipien t 
country’s 
own 
assessmen t 
and 
under
standing 
of control 
weaknesses 
will 
provide g reater
 motivation for improvemen t
 than audits an d
 controls
 imposed on it b y
 an outside 
authority;N E 9 0 0 2 . 9 . 6 2
Official Journ alof the EuropeanUnion 26.9.2009
74. Takes the view that a Coun try Disclosure Statemen t will enhance transp arency and accountability and give 
international 
donors 
valuable 
information 
with a view to mak ing 
an 
inform
ed judgement 
of the overall 
transparency 
and 
reliability 
of the beneficiary 
country’s 
governance 
and accoun tability 
structure;
75. Invites 
the Commission  
to take 
the lead an d 
to present 
this proposal to other in ternational 
donors 
— in 
particular 
the World Ban k 
— with a view to developin g 
and 
implemen ting 
such an 
instrument 
in 
agree­
ment 
with other don ors; 
stresses that the n ature 
of penalties 
for a delib er
ately misleadin g 
disclosure state­
ment 
will need 
particular atten tion;
76. Invites 
the Commission  
to inform 
it of a possib le 
timeframe for these n e
gotiations;
Integration 
of the ED F 
budget 
in the general bu dget 
of the Eu ropean 
Union
77. Welcomes the Commission  
engagement 
to ‘raise again 
its proposal to fully in corporate 
the EDF 
into 
the 
budget 
during 
discussion s 
on 
the next 
financial 
framework ’
(1) (SEC(2008) 2579) Commission  Staff Work ing Documen t. Annex to the report from the Commission  to the European
Parliamen t 
on 
the follow-up to 2006 discharg e 
procedure, p. 86. (1); invites the Commission  to keep its Com­
mittee 
on 
Budgetary 
Control 
fully informed 
as regards 
the preparation  
of this initiative;
78. Reaffirms 
its support for the in corporation 
of the EDF 
into 
the general 
budget 
of the European 
Union, 
which 
it considers 
would mak e 
it possible 
to enhance 
the coheren ce, 
transp
arency 
and 
effectiveness 
of 
the EDF 
and 
to strengthen 
its oversig ht 
system;
Tailoring parliamentary oversight to the instru ment
79.
 Takes
 the view that its role as reg ards
 budget
 support is to hold the Commission accoun ta
bl
e for the 
results of spen ding, 
and 
that budget 
support is an  
aid instrument 
which requires a paradig m 
shift in 
over­
sight 
behaviour 
moving 
from control 
over inputs 
to the check ing 
of results ag ainst 
indicators;
80. Believes 
that it is ob liged 
to develop its presen t 
way of work ing 
in 
order to achieve this; tak es 
the view 
that a sub -committee 
on 
the oversig ht 
of budget 
support set up b y 
its Committee on  
Budgetary 
Control 
would 
be 
an 
efficient 
tool to en sure 
that aid support spen ding 
benefits 
the population  
of the recipien t 
country 
and 
that taxpayers’ con tributions 
to aid spen ding 
are not 
misappropriated;
The Investment F acility
81.
 Recalls that in parag raphs
 20 to 24 of its Resolution of 22 April 2008  on discharg e
 in respect of the 
implemen tation 
of the budget 
of the Sixth, Seven th, 
Eighth 
and 
Ninth 
Europ
ean 
Developmen t 
Funds 
for 
the financial 
year 2006
(2) OJ L 88, 31.3.2009, p. 253. (2) it expressed its con cern that the man agement of the Investment Facility by the 
European 
Investment 
Bank 
(EIB) 
is excluded from the discharg e; 
further recalls that E DF 
resources are pub ­
lic 
money 
contributed 
by 
European 
taxpayers an d 
not 
by 
the financial 
marke
ts;
82. Regrets, 
as did the Court in  
its Opinion 
No 9/2007 on  
the proposal for a Coun cil 
Regulation 
on 
a Finan­
cial 
Regulation 
applicable 
to the 10th E uropean 
Developmen t 
Fund
(3) OJ C 23, 28.1.2008, p. 3. (3), the creation  of two separate areas 
of
 management,
 as this limits the scope of the discharg e,
 creates additional n eeds
 for coordin atio
n 
between 
the Commission  
and 
the EIB, 
and 
makes 
it difficult to g et 
a complete picture of results achieved;
83. Notes that the E IB’s 
annual 
report on 
the Investment 
Facility con tains 
mainly 
financial 
information 
and 
very 
little — if an y 
— information 
on 
the results of the differen t 
financed 
programmes;N E 8 0 1 / 5 5 2 L
Official Journ alof the EuropeanUnion L 255/109
84. Invites the E IB to focus its reportin g on results and to present complete, relevan t and objective informa­
tion 
as regards 
outcomes, ob jectives 
set, objectives 
achieved an d 
reasons for possib le 
deviation, 
as well as 
evaluation s 
carried out an d 
a summary of evaluation  
results;
85. Stresses that the E IB 
is operatin g 
in 
ACP coun tries 
under 
the Coton ou 
Agreemen t, 
whose primary aim is 
to eradicate poverty an d 
promote sustain able 
developmen t, 
and 
that it must therefore respect these g oals 
with 
regard 
to its lending 
policy to these coun tries;
86. Invites 
the Commission  
to inform 
it of the specific procedures it has estab lished 
with the E IB 
in 
order to 
coordinate 
the two in stitutions’ 
efforts to achieve E U 
developmen t 
objec
tives, as well as of the efficien cy 
of 
these procedures;
87. Is 
concerned 
about 
the image 
of the EIB 
as being 
the least tran sparent, 
least accoun table 
and 
least demo­
cratically con trolled 
institution 
among 
all the bodies 
entrusted 
with implemen ting 
EU 
policies as well as 
public 
financial 
institutions;
88. Invites 
the EIB, 
in 
the interests 
of the European 
Union 
and 
its values an d 
with a view to improvin g 
public 
perception  
of the EIB 
as an 
institution, 
to present 
evidence 
showing:
—how 
it lives up to the spirit of Reg ulation 
(EC) 
No 1049/2001 of the E uropea
n 
Parliamen t 
and 
of the 
Council 
of 30 May 2001 reg arding 
public 
access to E uropean 
Parliamen t, 
Council 
and 
Commission  
documents
(1) OJ L 145, 31.5.2001, p. 43. (1) and the Aarhus Con vention of 25  June 1998 on access to in formation, public partici­
pation 
in 
decision-making 
and 
access to justice in  
environmental 
matters, 
—how it lives up to the g lobal 
developmen t 
commitmen ts 
of the EU 
and 
the standards set b y 
other 
multilateral developmen t 
banks,
 
—how its fin ancing 
of capital-in tensive 
projects in  
the extractive sectors con tributes 
to poverty 
alleviation ,
 
—the guidelines 
it has developed for in vestment 
in 
the energy, 
forestry, tran sport, 
water and 
waste man ­
agement 
sectors, an d 
how its in vestment 
decisions 
fully follow these g uid
elines,
 
—that the very few full-time en vironmental 
experts in  
its staff respon sible 
for reviewin g 
its entire 
lend­
ing 
portfolio an d 
ensuring 
compliance 
with relevan t 
policies are sufficien t,
 
—the efficien cy 
of its complain t 
mechanism 
for affected citizen s, 
to which citizen s 
from outside the 
European 
Union 
should also have access, 
—the efficien cy 
of measures tak en 
to combat 
corruption  
and 
money 
launderi
ng,
 
—its criteria for len ding 
to the private sector, b eyond 
basic 
financial 
standards 
and 
the completen ess 
of 
a list of fin al 
beneficiaries 
of its lending 
to the private sector;
89. Invites 
the Commission  
to follow up closely the implemen tation 
of the Investment 
Facility with a view to 
guaranteeing 
that it fulfils its ob jective 
as a developmen t 
tool, and 
to inform its Committee on  
Budgetary 
Control 
on 
a regular 
basis 
of its findings;
90. Invites 
its Committee on  
Budgetary 
Control 
to strengthen 
its activities as reg ards 
control 
of the financial 
activities 
of the EIB, 
which fully falls un der 
the respon sibilities 
of that committee un der 
the Rules of Pro­
cedure, An nex 
VI, 
Chapter V, poin t 
3.N E 9 0 0 2 . 9 . 6 2