EUROPEAN COMMISSION Brussels, 24.11.2015 SWD(2015) 248 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 2015 Annual Report on the European Union’s development and external assistance policies and their implementation in 2014 {COM(2015) 278 final}



Table of Contents 1.Chapter 1 - Delivering on commitments 1.1.EU response to world developments in 2014 1.2.Leading the way in development policy 1.2.1.A more strategic approach: implementing the ‘Agenda for Change’ 1.2.2.Responding to global challenges and supporting long-term reforms 1.2.3.Making a difference: new instruments and aid modalities 1.3.Keeping long-term promises 1.3.1.Progress in achieving the MDGs and preparation of the post-MDG framework 1.3.2.Focusing on poverty 1.3.3.Strengthening human rights and good governance 1.3.4.Mainstreaming of cross-cutting issues 1.3.5.Cooperation with civil society organisations and local authorities 1.3.6.Financing for development 1.3.7.The role of the private sector 1.4.Better and more effective aid 1.4.1.Aid effectiveness and joint programming 1.4.2.Cooperation with the donor community 1.4.3.Cooperation with international organisations

1.4.4.Coherence between development and other policies 1.5.Outlook 2015 2.Chapter 2 - Implementation: geographic overview 2.1.European Neighbourhood and the Middle East 2.1.1.European Neighbourhood & Russia 2.1.2.Middle East 2.2.African continental, Sub-Saharan Africa & all ACP programmes 2.2.1.Sub-Saharan Africa 2.2.2.South Africa 2.2.3.Intra-ACP (Africa, Caribbean, Pacific) programmes, including water and energy 2.3.Latin America & the Caribbean 2.3.1.Latin America 2.3.2.Caribbean 2.4.Asia, Central Asia & the Pacific 2.4.1.Asia 2.4.2.Central Asia 2.4.3.Pacific 2.5.Overseas Countries and Territories (OCTs) 3.Chapter 3 - Implementation: thematic overview 3.1.The thematic programmes

3.1.1.Investing in people 3.1.2.Non-state actors and local authorities in development 3.1.3.Migration and asylum 3.1.4.Environment, climate change and sustainable management of natural resources 3.1.5.Food and Nutrition Security and Sustainable Agriculture 3.1.6.Sustainable Energy 3.1.7.Partnership Instrument 3.2.Democracy and human rights 3.3.Stability 3.3.1.Crisis response and preparedness 3.3.2.Global and regional trans-border challenges 3.4.Nuclear safety 3.5.Humanitarian assistance and Civil Protection Introduction Humanitarian aid 3.6.Macro-Financial Assistance 4.Chapter 4 - Managing aid for results 4.1.Monitoring and evaluation 4.1.1.Enhanced focus on results 4.1.2.Evaluation: review of the work programme

4.1.3.Lessons learned 4.2.Aid delivery modalities 4.2.1.Developments in aid delivery modalities and channels 4.2.2.Budget support 4.2.3.Using EU grants strategically via blending 4.3.Progress in aid management 4.3.1.Progress on qualitative issues in aid management 4.3.2.Simplification of procedures 4.4.Communication & transparency 4.4.1.Communication and visibility 4.4.2.Transparency 5.Chapter 5 - Financial annex 5.1.Introduction to financial tables 5.2.Financial tables



INTRODUCTION "The world is changing rapidly. New players and new challenges reshape our understanding of development. Today development touches not just on a wide range of policy areas, it touches our everyday lives." HRVP Mogherini In 2014 the European Union (EU) employed the entire breadth of its policies and tools that span diplomatic, security, financial, trade development and humanitarian aid. Development and external assistance are part and parcel of an integrated EU approach that tackles the roots of a problem not just its symptoms. That is why the EU increasingly combines all its policies to address the causes of conflict, both by tackling poverty and creating the conditions for economic growth, but also by laying the foundations for stable democratic societies. Comprehensive responses were developed to address major crises such as the conflict in Ukraine, the terror spread by Da’esh and other extremist movements in Syria, Iraq and beyond, as well as the Ebola crisis. The EU and its Member States remained the world's largest development aid donor and promoted European core values of peace, security, sustainable development, poverty reduction and human rights worldwide. The EU continued to deliver in priority areas of the ‘Agenda for Change’, notably human rights, democracy and other key elements of good governance and inclusive and sustainable growth. The EU's ‘Agenda for Change’ remains crucial to improving its impact on poverty reduction and supporting partner countries in achieving the Millennium Development Goals.

The EU is the world's leading humanitarian donor. In 2014 the EU Humanitarian Aid and Civil Protection department (ECHO) provided EUR 1 273 billion of assistance in response to natural disasters, armed conflicts and protracted crisis. At the end of 2014, the EU had 16 CSDP civilian and military missions or operations in place, of which two civilian missions (EUCAP Sahel Mali and EUAM Ukraine) and one military operation (EUFOR CAR) were established in 2014, focusing on the reform of the civilian security sector, protecting populations most at risk and creating the conditions for providing humanitarian aid. Cooperation with external assistance instruments and actors is given great importance during the planning and implementation of CSDP missions in line with the comprehensive approach. As strong promotor of Human Rights, the EU undertook human rights dialogues and consultations with 37 partner countries and regional groupings. The EU supported human rights civil society organisations and human rights defenders, conducted eight Election Observation missions and nine Electoral Expert missions and took further steps towards applying a more effective human rights-based approach to development cooperation. The external dimension of migration has gained in importance and will remain a priority for the EU. The EU sees migration as a global, complex and multifaceted phenomenon that requires a comprehensive, coherent and long term response. This approach entails addressing the root causes through intensifying cooperation with countries of origin and transit and better integrating migration in EU external policies. The EU is deeply committed to an effective multilateral system with the UN at its core. Throughout 2014 it has worked hard to advance the principles and spirit of the UN Charter. Whether in addressing crises, or defending human rights, justice, equality and equity, good governance, democracy and the rule of law, the EU continues to be a reliable and committed partner to the United Nations. In 2014, the EU advanced a clear vision and an influential voice in debates on the post2015 agenda in order to build consensus and achieve an ambitious outcome at the UN Summit that will take place in September 2015. The EU declared 2015 as the European Year for Development (EYD2015). Given that the timeframe for the Millennium Development Goals is coming to an end, the year’s motto ‘Our world, our dignity, our future’ looks ahead towards a new single framework for poverty eradication and sustainable development. The EYD2015 is the first ever European Year for Development and aims at raising awareness of the external actions of the EU and promoting the EU as a global player. 1.Chapter 1 - Delivering on commitments 1.1.EU response to world developments in 2014 The EU has been following the political situation in Ukraine closely and has been deeply engaged in seeking a solution to the crisis. Political initiatives went hand in hand with a large support package worth EUR 11.1 billion for the next seven years to help stabilise Ukraine's economic and financial situation, support a peaceful transition, encourage political and economic reforms and support inclusive development. An EU Advisory Mission for Civilian Security Sector Reform Ukraine (CSDP Mission) was also officially launched in December 2014. To forge an effective response to conflict and instability to the EU's south, the European Commission and the High Representative prepared the first EU comprehensive strategy on tackling the crises in Syria and Iraq and the threat posed by Da'esh. The strategy brings together ongoing and planned initiatives of the EU and its Member States and boosts their efficiency, with an additional EUR one billion in funding for two years. With this substantial package, the EU will ensure steady and predictable funding for essential priorities: relief, stabilisation and development in the region, as well as countering the threat posed by terrorist groups. These political, social, and humanitarian measures target Syria and Iraq, but also Lebanon, Jordan and Turkey. Dialogue between the Palestinian Authority (PA) and the EU continued in the framework of the European Neighbourhood Policy and on the basis of the priorities jointly agreed in the 2013 Action Plan. After the summer conflict in Gaza, the EU repeatedly underlined the need for a sustainable and comprehensive solution, including the lifting of the border closure, the return of the PA to its governmental responsibilities in the Gaza Strip and the urgent resumption of credible peace negotiations. The EU reaffirmed the applicability of international human rights and humanitarian law in the occupied Palestinian territory and called on Israel to fully meet its obligations under international law. At the 4th EU-Africa Summit held in Brussels in April 2014, leaders reaffirmed the EU's sustained support for the African Peace and Security Architecture through the African Peace Facility (APF) and the potential for providing more equipment as well as training and mentoring. The EU was able to announce the launching of EUFOR CAR. A maritime security meeting hosted by the HR/VP, along with comments in the plenary session, highlighted the valuable lessons learnt from Operation Atalanta, and the great interest from West African countries in the EU's new Gulf of Guinea Strategy. The presence of UNSG Ban Ki-moon sent a strong message about the extent of EU-AU-UN cooperation. The EU has contributed EUR 1.2 billion in financial assistance to the fight against the Ebola epidemic in West Africa. This includes funding from the European Commission (more than EUR 200 million) and Member States. The Commission was active with financial aid, experts on the ground, supply of mobile laboratories, support to the local authorities, reinforcement of national health infrastructures, coordination for the delivery of supplies and medical evacuations. The implementation of the EU Strategy for Security and Development in the Sahel continued throughout 2014 in all four of its main strands: political, development, security, and countering violent extremism. It was recognised that the link between security and development should remain at the heart of EU policies and operations in the Sahel, and that the implementation of the Strategy should be extended to Burkina Faso and Chad. Boko Haram (BH) continued its terror campaign with unprecedented brutality. The EU reacted through a comprehensive range of political, development and humanitarian instruments and listed BH as a terrorist group along the lines of the UNSC Sanctions Committee decision. Throughout 2014, the EU remained actively involved alongside international partners to bring stability to the Central African Republic and to support the political transition endorsed by the region and international partners, aiming at sustainable recovery from crisis. On 15 July 2014, the EU also launched its first ever multi-donor development trust fund, in support of CAR, which aims to facilitate the transition from emergency response towards longer-term development assistance. By the end of 2014 the 'Fonds Bekou' as the trust fund is called, received EUR 50 million from the European Development Fund, France, Germany and the Netherlands. The EU deployed Election Observation Missions in Maldives, Guinea Bissau, Malawi, Egypt, Kosovo, Mozambique and Tunisia and Electoral Expert Missions were deployed in Egypt, Libya, Thailand, Iraq, Algeria, Mauritania, Bolivia, and Fiji. While the EU does not observe elections in the OSCE area, it supported closely OSCE/ODIHR in the context of the presidential and parliamentary elections in Ukraine. In 2014, the EU focused strongly on climate change diplomacy and in particular on its outreach to strategic partners to ensure the progress of international negotiations under the United Nations Framework Convention on Climate Change (UNFCCC) framework. 2014 was an important year in laying the groundwork for the UNFCCC Conference of Parties in Paris 2015, where the EU seeks to secure a fair, ambitious and legally-binding international climate change agreement for the post-2020 period and to ramp up pre-2020 climate change ambitions.

1.2.Leading the way in development policy 1.2.1.A more strategic approach: implementing the ‘Agenda for Change’ The Agenda for Change, adopted in 2011, is the basis for the EU's development policy. The primary objective of the Agenda for Change is to significantly increase the impact and effectiveness of EU development policy and, to this end, a series of key changes in the way assistance is delivered have been introduced. This change took place within the framework of the programming for the period 2014-2020. During 2014, most new multi-annual programming documents were adopted and integrated the key changes outlined below. These key reorientations have changed EU development policy significantly. a)An increased focus of support to countries most in need The Agenda for Change calls for an increased focus of support towards countries that need support the most and where it can have the greatest impact on poverty reduction. This principle has been applied through the graduation of 16 upper and large middle income countries from bilateral aid under the Development Cooperation Instrument (DCI). These countries will not receive any new bilateral aid, but will remain eligible for funding from regional and thematic programmes. For those countries eligible for bilateral aid, the differentiation approach has been further applied at the level of country allocations through the use of a transparent and objective allocation methodology, which has been used for the first time in both the European Development Fund (EDF) and the DCI. This differentiation approach has induced a significant shift of initial allocated funds towards Least Developed Countries and other Low Income Countries, which now receive about 75 % of total EDF and DCI resources for country level cooperation. The allocation to Upper Middle Income Countries and High Income Countries has consequently decreased. For these countries regional and thematic cooperation, as well as support through the Partnership Instrument will become progressively more significant. b)A significant increase in sector concentration To further increase the impact and leverage of EU assistance, and to help keep EU assistance manageable for all stakeholders involved, the Agenda for Change calls for resources to target a smaller number of sectors - as a rule a maximum three sectors should be targeted. This has been achieved to a large degree for the programming period 2014-2020. Analysis shows that 79 % of multi-annual indicative country programmes will have three sectors, and 48 % less than three. In only 19 % of the national programmes will support be focussed on more than three sectors, mainly in countries with very large financial envelopes and which are considered fragile such as the Democratic Republic of Congo or Afghanistan. The average number of sectors per country falls to 2.3 and 2.9 respectively in the EDF and DCI programmes for the period 2014-2020. c)An increased focus on the priority sectors of the Agenda for Change In line with the Agenda for Change, EU support is now more focused on the two critical areas – notably on Human Rights, Democracy and other key elements of good governance, and inclusive and sustainable growth for human development. The latter is to be obtained through support to social protection, health and education, private sector development and regional integration, as well as sustainable agriculture and energy. d)Substantial progress with respect to aid effectiveness Significant progress was made with respect to alignment on country policies by basing EU programming on country policies and plans. Specific EU country strategy papers have therefore only been developed for a few cases. Fragmentation and proliferation of aid is still widespread and increasing in some areas. It is in this context that Joint Programming has emerged as a core element of the Agenda for Change and the EU’s common aid effectiveness agenda. Joint Programming is also about increased EU influence and impact through more coherent interventions and a strengthened political dialogue. Under the current programming exercise, joint programming has truly advanced. The process has been concluded or is underway in more than 30 countries. For more details see section 1.4.2.

e)Better predictability coupled with increased flexibility As a rule, the programming is undertaken for the full period 2014-2020 using an approach that allows ad hoc reviews as and when necessary. Only in a limited number of cases was programming for just the initial period undertaken. f)Adequate complementarity between country, regional and thematic programming Significant efforts were made to ensure adequate complementarity between country, regional and thematic programming documents avoiding overlapping programmes and promoting synergies between the different levels. g)A strong results focus A much stronger results focus has been put in place by inclusion in the programming documents of clear sector objectives and related indicators to measure results. Furthermore, substantial preparatory work has been accomplished with regard to the International Cooperation and Development Results framework which should enhance the EU’s reporting on results as a donor. The present report will be complemented later in 2015 by a specific report on the results of the EU funded actions. h) Other important changes In terms of development instruments, the full and successful implementation of the new Budget Support policy is of strategic importance. We have substantially improved consistency and reporting as well as the management of the risks and policy dialogue with the Risk Management Framework. Internal governance has been strengthened with the Budget Support Steering Committee (BSSC). Those efforts have been translated into more efficient and effective budget support operations which also show their quality through a sustained decrease in errors found by the Court of Auditors. In 2014 State-building Contracts have shown their usefulness in stabilising fragile situations. The guidance processes of the BSSC have been simplified to better target relevant cases. In addition, the Commission has identified areas where an increased use of innovative financial instruments can be explored and used through the EU Blending mechanisms. Guarantees and risk sharing mechanisms can be used in particular for infrastructure projects and for support to MSMEs but also for projects in the agricultural and social sectors. Domestic revenue mobilisation (DRM) is receiving growing attention and the Commission continued a number of sustained efforts on international, regional and national level to support partner countries in their tax reforms to substantially improve DRM and the fight against illicit financial flows. In addition, the EU supports the Extractive Industries Transparency Initiative (EITI) which aims at improving transparency of revenues from natural resources and the Tripartite Initiative with the World Bank and the OECD to strengthen Transfer Pricing efforts. As corruption is a major impediment to development, addressing it is at the heart of EU work. In the 2014 communication 'A decent Life for all: from vision to collective action', the EU renewed this commitment by promoting the adoption and implementation of appropriate legal frameworks and national policies in the post-2015 framework. In 2014, projects worth nearly EUR 77 million addressed anti-corruption at country level through advocacy, awareness-raising and reporting and capacity building for control and oversight bodies and the judiciary. In addition, good governance and anti-corruption are mainstreamed in key sectors of cooperation to ensure that all development cooperation programmes through-out their cycle address corruption and promote principles of efficiency, accountability and transparency. At the same time Delegated Cooperation has also progressed. In 2014 alone (mid-year data) 17 new Delegated Cooperation agreements with Member States were signed for a value of EUR 131 million (of which EUR 6 million was for blending operations) and two Transfer agreements from Member States to the EU were signed for a total of EUR 3.8 million. The Commission has identified areas where an increased use of innovative financial instruments can be further explored and used through the EU Blending mechanisms. Guarantees and risk sharing mechanisms can be used in particular for infrastructure projects and for support to MSMEs but also for projects in the agriculture and social sector. EU support for sustainable change in transition societies In 2013, the European Commission and the European External Action Service (EEAS) have moved to implement the Joint Communication ‘EU support for sustainable change in transition societies’. In July, the Joint Communication and the Council Conclusions were sent to all EU Delegations for information and to follow up where relevant. The EU offers support to partner countries undergoing transition, both at bilateral and regional level. Given the varying levels of progress in different countries support is tailor-made, bearing in mind each country’s specific political and socioeconomic contexts. For example, in the southern European Neighbourhood transitions are increasingly complex and multidimensional and require a coordinated mobilisation of a wide range of EU instruments. The EU supports democracy-related reforms in the areas of justice, governance and human rights. Security has become a new area of cooperation as development cannot take firm root in the absence of peace and security. The EU further contributed to short-term security actions as well as to long-term support to develop institutional capacity for Security Service Reform. In addition, the EU further enhanced support to civil society, including support to create a conducive environment for the development of civil society organisations.

At headquarters level, a platform for better sharing knowledge was set up as a new public group on capacity4dev and was made operational for the European Development Days in November 2013. This platform on transition will allow members of the group to find relevant information on EU support for sustainable change. Members of the group will also be allowed to share information on capacity4dev’s blog pages. 1.2.2.Responding to global challenges and supporting long-term reforms Climate change and development Climate change threatens to reverse the development achievements of recent years. Developing countries are particularly vulnerable to climate change because their economies often depend more on climate-sensitive natural resources, their societies are less resilient and because they possess fewer resources to adapt to climate change. The EU has committed to spend at least 20 % of its budget for 2014-2020 on climate-related projects and policies and the EU’s development policy will contribute to achieving this overall commitment. The EU is the world's leader in providing ODA to developing countries and is also the world's leader in providing support for climate action in these countries. The Global Climate Change Alliance is the EU's main initiative to enhance policy dialogue and support partner countries implementing their climate strategies, in particular the national adaptation planning processes. For example, the Chololo village in Dodoma province in Tanzania is located in semi-arid drylands, one of three ecosystems targeted for support by the Global Climate Change Alliance (GCCA) project. Since 2011, the Chololo Ecovillage project worked with the community to identify, introduce and evaluate new approaches in agriculture, livestock, water, energy and forestry. It proved a great local success and a source of learning on climate adaptation for other communities and regional and national decision-makers. Its strategies are being shared widely. At the European level, the EU has taken ambitious steps to achieve climate-smart development: it has demonstrated that it is possible to de-couple economic growth from increasing CO2 emissions. The 20th Conference of Parties of the United Nations Framework Convention on Climate Change (UNFCCC COP) took place in Lima, Peru, in December 2014. The conference prepared the road for a new climate deal to be agreed upon in Paris in 2015. Water and Energy In line with the Agenda for Change and as a commitment to the objectives of the UN Secretary General’s Sustainable Energy for All initiative (SE4ALL), Commission ex-President Barroso proposed the target of enabling access to sustainable energy for 500 million people by 2030 and put forward funds for the coordination, dissemination and tracking of this global effort. Long-term partnerships with developing countries are based on mutual accountability and political dialogue at regional, national and local level to help them develop efficient, sustainable energy reform programmes. In the margins of the UN Climate Summit in New York in September 2014 the EU signed five Joint Declarations with African countries on enhanced energy cooperation aimed at reinforcing the political ties between partner countries’ political commitments in the field of energy and the supporting actions financed by the EU and relevant donors. Initiatives such as the EU’s Technical Assistance Facility worth EUR 47 million are available to assist partner countries in refining and developing their policies so that they can attract the necessary private investments to develop a sustainable energy sector. Additionally, over 25 countries have chosen energy, 12 water and sanitation and eight transport as a focal sector for their bilateral cooperation with the EU within the context of the next multi annual framework (2014-2020). Building resilience in crisis prone countries The Commission’s Resilience Action Plan of June 2013 provides the framework for a continuation and scaling up of the EU efforts to build resilience with an expanded geographical scope and operating at different levels. The Global Alliance for Resilience Initiative (AGIR) encompasses major stakeholders from 17 partner countries, regional organisations, and technical and financial partners, including donors and UN based agencies, civil society organizations and the private sector. Its objective is to structurally reduce, in a sustainable manner, food and nutritional vulnerability by supporting the implementation of Sahelian and West African policies. The EU has been a catalyst in mobilising stakeholders to provide both political and financial support. In October 2014, thanks to continued high level support by the EU, AGIR was on the right track in the three West African regional organisations as well as in 17 countries: all West African countries committed themselves to achieve, through their national and regional policies and budgets, the objective of ‘Zero Hunger’ within the next twenty years. On the donor side, all technical and financial partners have put resilience at the top of their agenda. The EU has put forward EUR 1.5 billion for the period 2014-2020 to strengthen resilience in all West African countries and Chad through the 11th European Development Fund and other donors such as the WBG, USAID and EU MS are following. The EU has supported this process through financial support (EUR 2.4 million from FSTP) to the ECOWAS/CILSS to develop plans, called Country Resilience Priorities (CRPs), in all countries. At field level, EU Delegations and ECHO offices are working closely together. Cooperation under the 11th EDF (2014-2020) with some sixty countries in the region will focus on agriculture and food security, providing a continuing basis for prolonged support to resilience activities. Indicators and data for climate-resilient and sustainable development

Many initiatives are in place or have been announced to support climate adaptation and resilience in those countries most vulnerable to climate change. Global efforts to set the world on a climate-change-resilient development path require an understanding of the relationships between climate change and development as well as metrics for the identification of the countries, groups of people, and sectors most seriously threatened by climate change. The EU Joint Research Centre supports Directorate-General for International Development and Cooperation — EuropeAid in identifying indicators for climate-resilient development, which will be applied throughout the new Global Climate Change Alliance (GCCA) programme (2014-2020). Moreover, the JRC is establishing an open forum on climate-resilient and sustainable development, which will be supported by a web knowledge platform, as an interface between science and policy in these areas. This platform will provide data and indicators and will be an open source, transparent, objective, reliable, and accurate source of information on the natural hazards related to climate change, vulnerability, adaptive capacity, mitigation, and resilience. It will provide users with indicators targeting adaptation and mitigation funding, and monitoring and evaluation (M&E) of adaptation and mitigation programmes, within the context of the 2015 Sustainable Development Goals, the 21st Conference of the Parties UNFCCC, and the UN World Disaster Risk Reduction Conference. 1.2.3.Making a difference: new instruments and aid modalities 2007-2013: a strong legacy Over the past few years, the EU and its Member States have provided more than half (56 %) of global aid to developing countries. To highlight just a selection of notable achievements, the EU has provided aid to the poorest people in more than 150 countries worldwide through the European Development Fund and the Development and Cooperation Instrument (DCI) making a significant impact in Africa, Latin America and Asia: regions that are home to 70 % of the world's people living on less than USD 1.25 per day. In our immediate neighbourhood, a number of strategic developments have been successfully achieved with partners to the East and South of the EU’s borders including the deepening of bilateral relationships, the launch of key regional initiatives and active support for democratic transition processes in our Southern Neighbourhood. The results obtained through the external financing instruments during the last financial period have paved the way for new, improved and adapted tools. 2014-2020: new challenges require new and sufficient targeted resources The new external financing instruments proposed by the Commission in December 2011 which provide the strategic tools for more effective and flexible action over the period 2014-20 have now been adopted by the Council and the European Parliament and started to be implemented from 2014. In a changing and globalised world that is affected by uncertainty and long term crisis, and where emerging economies like China, India and Brazil are asserting their influence, Europe must stand together and be an active partner in shaping global change. The external financing instruments funded by the EU budget and the European Development Fund will ensure that the EU can speak with a united and stronger voice and promote poverty reduction, democracy, peace, solidarity, stability and prosperity, both in our immediate neighbourhood and across the world. Pursuing the external strategic objectives of the Europe 2020 strategy the new instruments translate into operational terms the priorities of the Agenda for Change. and the new vision for the European Neighbourhood Policy. Four policy priorities are at stake: enlargement, neighbourhood, cooperation with strategic partners, and development cooperation. With regards to the latter point, the overall priority remains to help the poorest in the world and work towards achieving the Millennium Development Goals (MDGs) and contribute to a global agenda for sustainable development post-2015. Over the period 2014-2020 the total amount allocated (at current prices) for the six external relations instruments is EUR 51.4 billion. This is allocated as follows - Development Cooperation Instrument: EUR 19.6 billion; European Neighbourhood Instrument: EUR 15.4 billion; Instrument for Pre-Accession Assistance (IPA II): EUR 11.7 billion; Instrument contributing to Stability and Peace: EUR 2.3 billion; European Instrument for Democracy and Human Rights: EUR 1.3 billion; and Partnership Instrument: EUR 0.9 billion. In addition, the Instrument for Nuclear Safety Cooperation and the Instrument for Greenland, both adopted by the Council, will respectively provide EUR 0.22 billion and EUR 0.19 billion from the EU budget. A further EUR 30.5 billion will be made available for cooperation with African, Caribbean and Pacific countries as well as Overseas Countries and Territories through the 11th European Development Fund (EDF), which remains outside of the EU budget for the next period. Overall funding foreseen for all the instruments for the EU external action, including all those mentioned above totals EUR 96.8 billion. What are the main changes? The EU seeks to target its resources where they are needed most and where they can have most impact. This more differentiated approach to partnerships and aid allocation driven by specific country context is a core principle of the new Development Cooperation Instrument and European Neighbourhood Instrument. With the new Development Cooperation Instrument, the partner countries most in need, in particular the least developed countries, have been given priority in the programming phase achieved at the end of 2014.

Compared to the 10th EDF the amount allocated to the 11th EDF remains stable. The main areas of change were to insert changes foreseen by the second revision of the Cotonou agreement (such as the creation of regional envelopes for unforeseen needs and a new shock absorbing scheme), as well as to align the 11th EDF Implementation and Financial Regulations as much as possible with the other financial instruments of EU development cooperation. During 2014, the bridging facility covered the period until the 11th EDF enters into force in March 2015. With the new European Neighbourhood Instrument an incentive based approach, which is one of the key aspects of the renewed Neighbourhood policy, will allow the EU to adapt its support for partner countries who are genuinely implementing deep and sustainable democracy, including respect for human rights, and agreed reform objectives. When it comes to strategic emerging economies, the EU will focus primarily on partnerships in areas of mutual interest and will seek to more effectively promote its own strategic interests. Differentiation also means a flexible use of implementation methods. Innovative financial instruments such as blending (the combination of grants and loans or equity to enable investments) will help graduating partner countries to tap into capital markets and close financing gaps in the poorest countries. The Commission has committed itself to increase the share of EU aid through innovative financial instruments. Therefore, during 2014 Directorate-General for Development and Cooperation — EuropeAid has carried out exhaustive work together with development finance institutions and other stakeholders to identify specific instruments, key areas and sectors where blending can be used more. The European Parliament was involved in the setting of priorities for EU external cooperation prior to the programming of the external financial instruments. The Commission conducted an informal strategic dialogue with the European Parliament in the preparation of its programming documents. Finally, the new instruments allow more flexibility to increase the EU’s capacity to respond to unforeseen events and the simplified rules and procedures for programming and delivering assistance are more effective. 1.3.Keeping long-term promises 1.3.1.Progress in achieving the MDGs and preparation of the post-MDG framework Poverty, hunger and nutrition After the first MDG goal target of halving extreme poverty was successfully met five years ahead of schedule in 2010, just over one billion of people remained in extreme poverty in 2011. However, major regional differences remain a concern. The positive development is mostly due to the progress in the fast growing economies of East Asia. Sub-Saharan Africa (SSA) and South Asia (SA) account for about 80 % of the World’s poor and will have to face the biggest challenges to eradicate extreme poverty. The target of halving the number of people suffering from hunger is within reach. The proportion of undernourished people globally decreased from 23.2 % in 1990-1992 to 14.9 per cent in 2010-2012. But this still leaves 870 million hungry people. With concerted action by national governments and international partners the hunger target could be achieved, but more needs to be done. Education The MDG target to ensure that children everywhere in the world will be able to complete a full course of primary schooling has only been achieved in Latin America and the Caribbean, East Asia and the Pacific, and Europe and Central Asia. Full enrolment is far from being the reality in South Asia and Sub-Saharan Africa – despite an accelerated progress since 2010. In 2012, 58 million children, especially in conflict-affected areas and girls from poor rural households, still remained out of school. The EC's financing support to the Global Programme of Education has been instrumental in the efforts to improve MDG targets on education. In June 2014 the Commission hosted the second replenishment pledging conference of the Global Partnership of Education (GPE) in Brussels. The Conference raised an unprecedented commitment from partner countries of EUR 26 billion in additional domestic funding to education. The donors pledged EUR 2.1 billion to the GPE itself. Gender equality Great progress was achieved on gender parity in primary education with an enrolment ratio for boys to girls standing at 97 % for developing countries. In secondary and tertiary education, although with similar average indexes, strong regional disparities prevail. Achievements were also made in women's political participation. In January 2014, 22 % of all members of parliament were women, up by 1.5 % in the previous year. However, inequalities in the labour market remain persistent. The share of women working in paid employment in non-agricultural activities increased globally by only 5 % between 1990 and 2012 with lowest rates in Northern Africa (20 %). The gender commitments of EU development policy continue. To empower women and protect women and girls’ full enjoyment of human rights, the focus has been put on socioeconomic empowerment, access to and control over resources, participation in political and decision making processes especially related to security and fragile situations. Specific actions have been promoted, for instance a programme in the Central Africa Republic to support women victims of violence following the humanitarian crisis. At global level, the European Union called strongly for gender equality and women's empowerment and the promotion of human rights and opportunities for all women and girls to be considered as a universal priority in the elaboration of the post-2015 framework. Child mortality, maternal health and diseases

The significant European Commission support to global health initiatives, the Global Alliance on Vaccines and Immunisation (GAVI) and the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), has contributed to progress on the MDGs at country level, in particular in reducing under-fives mortality due to increased availability of childhood vaccination programmes and prevention of malaria, tuberculosis and HIV. The mortality rate for children under five years in 2012 was almost half of its 1990 number. The MDG of reducing global child mortality by two-thirds is thus still far from being reached. South Asia and Sub-Saharan Africa account alone for 81 % of all child deaths in the world. Stepping up efforts to decrease this high number is especially important in these two regions. The maternal mortality ratio shows a similar picture. Despite the 45 % decrease between 1990 and 2013, the progress lags far behind the goal of reducing maternal mortality by three-quarters. Moreover, regional differences are great and persistent. Despite the global decline in new HIV infections by 44 % between 2001 and 2012, in 2012, a record number of 35.3 million people living with HIV were registered. SSA is the region where around 70 % of all new incidents occurred. The access to antiretroviral drugs increased 40-fold between 2002 and 2012, treatment coverage for children, however, only reaches half that of adults. Incidence of tuberculosis and deaths resulting from it continue to fall and the target of halving the spread is within reach by 2015. Still some 8.6 million people were newly diagnosed with the disease in 2012. Malaria is one of the targets that will most likely be fully met by the deadline. Substantial work has been done in malaria prevention, leading to a decline in malaria mortality rates by 42 % globally between 200 and 2012. More than 700 million bed nets were delivered alone in Sub-Saharan Africa in this period. Environmental sustainability Environmental sustainability continues to be a major challenge with an increase of carbon dioxide emissions by almost 50 % since 1990, and an average forest loss of 13 million hectares a year between 2000 and 2010. Considerable progress has been made on water provision. The proportion of people without access to improved water sources had been halved by 2010 – five years ahead of the target. Although 33 % of urban residents in developing countries live in slums, down from 40 % in 2000, their absolute number is still increasing. The EU seeks an integrated approach to the challenges of poverty eradication and sustainable development, including environmental concerns. Over the course of 2014 the European Commission has worked hard to ensure that the follow on from the MDGs stresses the importance of present and future generations, recognising that environmental sustainability is fundamental to ensuring the sustainable prosperity and well-being of all citizens, within finite planetary boundaries. Efforts were further focused in order to close the gap between climate change and poverty eradication and catalyse opportunities for investing in green growth. Lessons for the transition to the Sustainable Development Goals (SDGs) The post-2015 development agenda, including the Sustainable Development Goals (SDGs) at its core, will build on the foundations laid by the MDGs, complete unfinished business and respond to new challenges. It will also build simultaneously on the Rio +20 process. Indeed, the transition to the SDGs provides the opportunity to address at the same time lessons learnt and gaps identified from both the MDGs and the Rio +20 processes. One central lesson is that poverty eradication and sustainable development are closely interlinked and should be addressed together. Another is that to stimulate action from all and achieve the necessary change, both at domestic and global level, a shift towards a universal agenda with goals and targets applying to all countries is fundamental. There is a need to move from a purely quantitative approach to also address quality, for example in education and health. Moving from aggregate averages to disaggregated data will also be key in order to address inequalities and ensure that targets are met for all relevant groups, including the poorest and most vulnerable. The Open Working Group’s proposal for SDGs clearly heeds these lessons, and puts forward a transformative set of goals and targets integrating the three dimensions of sustainable development (economic, social and environmental) in a balanced manner. It addresses gaps from the MDGs and breaks new ground with goals on inequalities, inclusive and sustainable economic growth, industrialisation, sustainable consumption and production, energy, climate change, peace, justice and institutions. Energy Although Energy is not explicitly mentioned in the current MDGs, the relevance of access to sustainable energy as acknowledged through the EU's contribution towards the SE4ALL initiative, is feeding into the discussion to include Energy in the future SDGs. Directorate-General for Development and Cooperation — EuropeAid works towards the general agreement that access to sustainable energy services, as stated in the Agenda for Change, is one of the most powerful levers in poverty reduction will hopefully lead towards the explicit mention of sustainable energy in the SDGs. Water and Sanitation The MDG target to halve the proportion of people without access to clean drinking water was reached five years ahead of the 2015 deadline. This achievement reflects the concerted effort of the international community, to which the EU made a significant contribution. In the period 2004-2013, EU assistance has helped to connect 70.2 million people to drinking water and 24.5 million people to sanitation facilities. 1.3.2.Focusing on poverty

Global poverty has declined significantly since 1990 and the goal of halving extreme poverty has been achieved globally. A major role in poverty reduction was played by India and China. Nonetheless, India remains the country with the highest share of the world's extreme poor (30 %) followed by China (8 %). Similarly, regions such as Sub-Saharan Africa (SSA) and Southern Asia are still lagging behind. Many African countries have made progress towards the MDGs, yet almost half of the population still lives on USD 1.25 or less a day. EU development cooperation has been a constant and significant supporter of African countries. In 2014 alone EDF disbursements amounted to EUR 3 billion. The MDG initiative, which the EU started in 2013, makes available additional funds for supporting countries in Sub-Saharan Africa to accelerate their progress towards the MDG targets. To date an amount of EUR 974 million has been committed. Although Asian countries have shown remarkable growth, poverty is still widespread on the continent, income inequality is increasing and regional development is uneven. During 2014, a number of Middle Income Countries in Asia graduated and will therefore no longer benefit from bilateral allocations under the DCI instrument. Yet, they still benefited from an important set of projects and programmes funded under the 2007-2013 MIPs and from funding stemming from thematic and regional programmes notably in the areas of trade related assistance, higher education, sustainable production and consumption, regional integration, good governance and civil society. As to the Asian MIC's which can still continue benefiting from bilateral programmes, their Multiannual Programmes were approved in 2014. Priority sectors reflect the emphasis of the ‘Agenda for Change’ on inclusive, sustainable development, green growth, job creation and on good governance. Blending instruments have also been put in action, notably in Vietnam. In addition, measures promoting EU business interests and public diplomacy have been implemented. In Central Asia, EU cooperation has focused on agriculture and rural development, support to the social and private sectors, sustainable energy development and environmental protection, including the management of water resources. In the Gulf region the political and security situation in Iraq and Yemen worsened during 2014. The escalation of violence has also undermined the stability of the region. The general poverty situation has deteriorated further in these countries. The EU addresses these challenges by improving governance in Iraq and basic services delivery in Yemen. In the Pacific region, EU development assistance has continued to focus on MDG-areas that are closely linked with improving basic living conditions, especially of poor and remote populations: by improving basic health and hygiene standards through improved access to water and sanitation as well as by assuring sustainable energy supply particularly in off-grid rural and outer island regions. Latin America and the Caribbean reduced their poverty levels to half by 2015 and also reached other MDGs, e.g. the rate of underweight children dropped from 7 % to 3 %, the access to improved drinking water sources rose to 94 % and more women are holding seats in national parliaments than in any other region. EU cooperation is focussed on increasing productivity, support diversification of production, economic integration and increased domestic resource mobilisation. 1.3.3.Strengthening human rights and good governance In 2014, the EU continued to implement its ‘Agenda for Change’ that has set human rights, governance and democracy as a core focus of the EU development cooperation. The development activities had also to respond to the requirements stemming from the ‘EU Strategic Framework and Action Plan on Human Rights and Democracy’. The EU finalised the bilateral programming exercise with partner countries adopting strategic programming documents and multiannual indicative programmes for 2014-2020. Human rights, democracy and other key elements of good governance have been addressed either as key focal sectors or the rights-based approach has been applied in other areas of cooperation. The EU commitment to the rights-based approach has been reflected in the 2014 Commission Staff Working Document designing a toolbox ‘a right based approach, encompassing all human rights for EU development cooperation’. In May 2014 the Council Conclusions welcomed this significant step and highlighted the key principles it contains. The toolbox provides political impetus and concrete guidance on how to integrate a rights-based approach into any development programme or project along five working principles: applying all rights, participation and access to the decision making process, non-discrimination and equal access, transparency and access to information. The implementation of a rights-based approach into all EU development programmes and projects will strengthen the capacity of duty of bearers to respect, protect and fulfil human rights and the corresponding capacity of the rights–holders to know, promote, protect and claim their rights and fundamental freedoms. In parallel with the programming exercise, the EU continued assessing the fundamental values in its budget support programmes. As of 1 January 2013, the methodology provided in the Budget Support Guidelines is implemented for all new budget support programmes. 1.3.4.Mainstreaming of cross-cutting issues Environment and Climate Change The EU remains firm on its commitment to make 20 % of its spending climate-relevant, and this is also true of its development cooperation. Mainstreaming of environment and climate change in development cooperation remains a top priority and the EU’s development arm seeks to ensure that the EU puts its money where its mouth is by allocating at least 20 % of its budget to climate-relevant action and to ensure that biodiversity financing is doubled by 2015 and that these levels remain at this level or above through 2020 and beyond. In 2014 the EU sought to scale up support to the Poverty-Environment Initiative which supports 30 countries across the world in integrating poverty-environment concerns in development policy, planning and investment. Expanded public and private investment to improve the poor’s access to these environmental assets can generate strong returns for poverty reduction, contribute to pro-poor growth and accelerate progress towards attaining the MDGs. Private Sector The private sector plays a central role in many areas of EU development cooperation. Thus on May 2014, the Commission adopted a Communication ‘A stronger role of the private sector in Achieving Inclusive and Sustainable Growth in Developing Countries’ that provides a strategic framework for mainstreaming private sector development and engagement across sectors of EU development cooperation with a particular focus on sustainable energy, sustainable agriculture, infrastructure and green sectors. In line with partner governments’ policies, the Commission is developing ways to better integrate private sector development objectives into support strategies, and to identify modalities for using the private sector as an implementing and financing partner in these areas.

More information can also be found in chapter 3.1.4. Research and innovation are a mean to foster development by enhancing human potential and infrastructures as well as designing new services and products. In addition, research provides evidence in support of development policies. The communication on 'Enhancing and focusing EU international cooperation in research and innovation: A strategic approach', adopted by the European Commission in 2012, sets "supporting the Union's external policies" as one of its three main objectives. A report on the implementation of the strategy was adopted in September 2014. Annexed to this report is a set of 11 roadmaps with international partners (2 regions and 9 countries) of the Union. These roadmaps are about setting priorities and making them visible, mirroring developments of the Union’s policy-dialogues on research and innovation. DG Research and Innovation continues to invest through Horizon 2020, the new EU Framework Programme for Research and Innovation (2014-2020), in cooperation between researchers in Europe and developing countries, to contribute to the achievement of the Millennium Development Goals (MDGs) and other international commitments such as Rio+20. Proper and appropriate cooperation between the DCI / EDF and Horizon 2020 should be ensured in future, at least for those 25 countries which have chosen energy as one of their three focal sectors for their bilateral cooperation with the EU. As outlined in the Union's strategy for international cooperation in research and innovation Horizon 2020 is first of all open to the participation of researchers from across the world, which entails that the majority of developing countries are eligible for funding. Secondly, targeted international cooperation activities are included across the societal challenges, enabling and industrial technologies and other relevant parts of Horizon 2020. 1.3.5.Cooperation with civil society organisations and local authorities Civil Society Organisations In October 2012 the EU endorsed the Commission Communication ‘The roots of democracy and sustainable development: Europe’s engagement with Civil Society in external relations’. The new policy aims at achieving an enhanced and more strategic approach to EU engagement with local civil society organisations (CSO) in partner countries, in order to build stronger democratic processes and systems of accountability, achieve better development outcomes through constructive relations between States and CSOs, and enhance Civil Society capacity. Although the contribution of partner countries’ CSOs to their domestic policy-making is at the heart of EU engagement, the policy also emphasises the role of CSOs in networks and international alliances that act at the regional and global levels to tackle transnational and global challenges including holding the international community accountable for delivering on aid commitments and promoting global solidarity and citizens’ awareness. 2014 has been a critical year for translating these provisions into substantive actions. A guidance note on EU Country Roadmaps for Engagement with Civil Society was launched in January 2014. To date 76 Roadmaps (conceived as a joint initiative between the EU and Member States) have been developed out of target of 118, while several others are in the pipeline. Many Delegations have been using the Roadmaps as an entry point to reach out to a broader range of CSOs in order to have a more strategic engagement and dialogue, going beyond the question of financial support. The roadmaps are also instrumental in strengthening EU collaboration and coordination with Member States and other international players, as well as to give visibility to the work carried out by the EU. In addition, under the Multi-Annual Financial Framework for 2014–2020 a specific actor-based programme to benefit CSOs and local authorities (LA) was adopted as a successor of the thematic programme Non-State Actors and Local Authorities in Development. Local Authorities In May 2013, the European Commission adopted the Communication ‘Empowering local authorities in partner countries for enhanced governance and more effective development outcomes’. It promotes a more strategic EU engagement with LA and their Associations in partner countries in order to unlock their full potential, focusing on good governance at the local level and a territorial approach to development. It supports decentralisation and State reforms, LA capacity development, smart solutions for sustainable urbanisation, and Associations of LA (ALA) at national, regional and international levels. 2014 has been the starting point for the translation of the Communication priorities into concrete actions, firstly with the elaboration of the aforementioned CSO-LA thematic programme. In addition, the Communication recognises ALA as instrumental in achieving good governance and development outcomes at local level, particularly in linking local concerns and priorities to regional and international debates. As a result, following a negotiation process held during 2014, the Commissioner for International Cooperation and Development Neven Mimica signed, for the first time ever, five Framework Partnership Agreements (FPA) with the main regional and global networks of ALA: the United Cities and Local Governments, Association Internationale des Maires Francophones, Commonwealth Local Government Forum, United Cities and Local Governments of Africa, and the Council of European Municipalities and Regions. FPA institutionalise strategic partnerships for the period 2015-2020, deepen EU’s relations with LA and foster their institutional and operational capacities thanks to financial support of EUR 20.3 million for the period 2015-2017.

The Policy Forum on Development (PFD): a space for multi-stakeholder dialogue 2014 constituted the first year of activity of the PFD during which two meetings were held in Brussels and in Latin America. Both meetings were an opportunity for PFD members to discuss the global agenda, and notably the post-2015 framework, as well as the CSO-LA thematic programme. The PFD brings together representatives of CSO networks (Non-Governmental Organisations, Trade Unions, Cooperatives, Chambers of Commerce, Foundations, etc.) and ALA from the EU and partner countries. Development Education and Awareness-Raising (DEAR) In 2014, the EU sought to further implement the lessons learned from the 2012 Staff Working Document (SWD) on DEAR in Europe. To this end, the EU further engaged with stakeholders on DEAR in 2014, including with EU Member States. Following up on what the SWD identified as elements of particular added-value, such as the pan-European scope of EU-supported actions, the EU contracted 22 new large-scale projects. All of these projects are directly relevant to the objectives of the European Year for Development 2015 (EYD2015) and seek to use the momentum created by EYD2015 to further raise awareness in Europe regarding development issues and global interdependencies. 1.3.6.Financing for development The Commission continued to successfully mobilise the EU and its Member States to act as one on financing for development (FfD), and promote a comprehensive and integrated approach to all financial and non-financial Means of Implementation, throughout 2014. Building on the 2013 Commission Communication ‘Beyond 2015: towards a comprehensive and integrated approach to financing poverty eradication and sustainable development’, the EU and its Member States have been able to articulate a common EU approach to financing beyond 2015 in UN discussions on financing for development during 2014. This approach will be further refined in 2015. These discussions will culminate in the Third UN Financing for Development Conference in Addis Ababa in July 2015 and the post-2015 Summit in New York in September 2015. In the UN, the EU and its Member States have been advocating for an integrated approach to financing, which should use all resources from all actors, ensure synergies between different processes and support poverty eradication and sustainable development in all of its dimensions. Crucially, financing measures should also be set in the context of the wider Means of Implementation available to developing countries, in particular good policy measures, good governance and the creation of an enabling environment needed to maximise impact. The EU and its Member States have also pushed for merging the FfD and post-2015 tracks (arguing that the financing for Development Conference in Addis should constitute the Means of Implementation pillar of the post-2015 agenda) and for coherence with the Conference of the Parties of the UN Framework Convention on Climate Change in December in Paris. The 12th annual EU Financing Accountability Report consolidated reporting on EU progress against development financing commitments, and provided transparency of the EU and Member States’ actions in support of financing for development. The Report covered all aspects of development finance as framed by the Monterrey Consensus and the Doha Declaration. It showed that mobilising more development financing from all available sources was a necessary, but not sufficient, condition to fight poverty and foster development. It also showed that the EU’s contribution to supporting developing countries went far beyond its Official Development Assistance (ODA). The EU and Member States have made substantial progress on the commitments concerning private investment, trade, finance relating to climate change adaptation and mitigation, Science, Technology and Innovation (STI) and innovative financing sources and instruments, and moderate progress on the commitments concerning domestic resource mobilisation, debt sustainability, remittances, biodiversity protection and development effectiveness. At the same time, the EU and most Member States have not yet reached their collective and individual ODA targets by 2015. EU collective ODA amounted to a total of EUR 58.2 billion in 2014, corresponding to 0.42 % of combined GNI, showing an increase of 2.4% from 2013.As a percentage of GNI however, this is a marginal decline from 0.43% in 2013 due to changes in the way GNI was calculated by most Member State. EU Collective ODA was however significantly higher than for other OECD donors with average ODA of 0.28% of GNI. The EU collectively remained the world’s largest donor in 2014- accounting for more than half of the ODA reported by the OECD DAC. Collective EU ODA is the sum of the ODA reported by the EU institutions and by the Member States. It includes EUR 2.0 billion of ODA loans of the European Investment Bank’s own resources (2014) that are not imputed to EU Member States and are additional to the EU28 Total. Without the aforementioned change in GNI methodology, EU collective ODA in 2014 would have reached 0.44% of EU GNI. The total ODA of the EU Member States alone that year stood at EUR 56.1 billion, or 0.41% of combined GNI.

Sources: For figures 1995 – 2014 oFor OECD members: OECD/ DAC. oFor non-OECD EU Member States: OECD/ DAC where available, otherwise Member States data. Data for Cyprus is estimated at the same volume and GNI ratio as 2013, as 2014 figures are not yet available. 2014 ODA figures are preliminary. For figures 2015, Commission simulation is based on: oMember States' ODA estimates when available, oCommission projections using compound annual ODA growth rate for 2008-2013 when Member States have not provided ODA estimates. Official EU GNI projections from the annual macro-economic database (AMECO) of the European Commission. 1.3.7.The role of the private sector The private sector is emerging as an active player in the development field, with increasing public-private collaboration in development cooperation. As a result, interactions between donors and the private sector have intensified and became more complex. Following extensive stakeholder consultations in the EU and partner countries, including the private sector, the Commission adopted on 13 May 2014 a Communication ‘A Stronger Role of the Private Sector in Achieving Inclusive and Sustainable Growth in Developing Countries’.This new strategy introduces private sector engagement as a new dimension in EU development cooperation. The Commission will look beyond public support to improving the business environment and framework conditions for private sector development in partner countries to also harness the potential of closer engagement of the private sector for development, both as a financing and implementing partner in EU development cooperation, and by encouraging the positive development impact which comes from companies' engagement in development as part of their core business strategies. The Communication proposes 12 actions in areas where the Commission can add value. These address better regulatory environments in partner countries, business development support and access to finance, especially for micro, small and medium-sized businesses in the formal and informal sectors that play a particularly vital role in job creation. The Communication also identifies actions in other areas such as sustainable energy, sustainable agriculture, infrastructure and the green sectors, where private sector engagement can effectively complement and add value to EU development assistance, including through the use of blending (combining grants and loans). It finally encourages the private sector in partner countries, the EU and beyond to engage in responsible investment, sustainable trade, inclusive business models and other strategies as part of its core business to enhance economic opportunities for the poor and thereby achieve development aims. The Communication also provides guidance to the EU and its Member States on how best to engage with the private sector for achieving development outcomes. To this end, it proposes a set of principles for private sector engagement in EU development cooperation. In particular, clear criteria in the provision of direct support to private sector actors have been defined to ensure that public support is additional to what the private sector can do on its own, leads to measurable development impact and promotes high standards. The communication has been discussed thoroughly in the Council of the European Union, and the Foreign Affairs Council (FAC) has adopted in the course of 2014 two sets of Council Conclusions. On 23 June 2014, a first set were adopted under the Greek Presidency welcoming the principles and priorities of the Commission’s communication. Under the Italian Presidency, a second set was adopted on 12 December 2014 with a specific focus on the principle and criteria that Member States have committed to apply, innovative financial instruments and mechanisms, the dialogue with the private sector, the promotion of responsible business practices and finally donor harmonisation and aid effectiveness in this area.

1.4.Better and more effective aid 1.4.1.Aid effectiveness and joint programming The Global Partnership for Effective Development Cooperation (GPEDC) is the key framework for the aid and development effectiveness agenda. The Commission represented the EU constituency in the GPEDC Steering Committee (SC), being one of the three representatives of donor partners in the SC, which met in 2014 in Abuja (February) and New York (July). The first GPEDC High Level Meeting (HLM) took place in Mexico on 15-16 April 2014. It highlighted its ability to convene a genuinely diverse group of actors, its focus on important issues for developing countries, the mechanism put in place to monitor and measure progress, and its commitment to improve effectiveness on the ground. Thirty nine Voluntary Initiatives were launched at the Mexico HLM, with the European Union putting forward officially the commitment on Joint Programming. Joint Programming helps respond to partner countries growing requests to reduce aid fragmentation and transaction costs placed on their institutions. It also improves transparency, predictability, coordination, and reduces bureaucracy and costs for all actors involved. In 2012, 52 partner countries were deemed suitable by EU Heads of Mission as good candidates for EU Joint Programming. This means 60 to 70 % of bilateral aid managed by the European Commission would be planned and implemented through joint programming processes. An analysis of the 52 countries shows that they are widely spread over almost all regions (see tables below). Almost half (25) of the countries are in sub-Saharan Africa, with West Africa being the most common region. Asia has nine potential joint programming countries. Table 1. GEOGRAPHICAL DISTRIBUTION OF JOINT PROGRAMMING Region No. of JP Countries % of Global JP Countries Africa – Western Asia Africa – Eastern Neighbourhood - Southern Latin America Africa - Southern Neighbourhood - Eastern Africa – Central Caribbean Middle East 11 9 7 7 6 4 3 3 1 1 22 18 17 6 12 16 6 5 4 3 The majority of joint programming countries are either in the least developed or lower-middle income group (see table below). 54 % of countries where joint programming has been launched are classified by the OECD as fragile states. Table 2. PARTNER COUNTRY TYPES Type No. of JP Countries % of Global JP Countries Upper-Middle Income Lower-Middle Income Least Developed Fragile State (OECD) Non-Fragile State (OECD) 5 18 27 28 24 10 35 52 54 46 All Member States with a development presence in the partner countries participate in Joint Programming. Most Member States are present in at least some of the joint programming countries. Particularly well represented are France (present in 45 joint programming countries), Germany (41), Italy (31), UK (26), Sweden (20), Denmark (20), the Netherlands (18), Belgium (17) and Spain (17). Preparations for the Joint Programming process are underway in 18 partner countries. In 14 partner countries Joint Programming documents were finalised or in the process of finalisation by end 2014. The table below summarises the amounts of bilateral programmable assistance in these 14 countries over the current programming cycle. Some EUR 11.5 billion is being jointly programmed, with the EU contributing EUR 4.3 billion.

Table 3. FINANCIAL WEIGHT OF JOINT PROGRAMMING A. COUNTRY B. EU allocation (EUR million) C. Total EU + MS (EUR million) D. Joint programming multiplier (C/B) E. Period under current discussions Burma/Myanmar Burundi Cambodia Chad Comoros Ghana Guatemala Laos Mali Namibia Rwanda Senegal South Sudan Togo 300 312 471 442 101 319 186 33 598 68 541 200 345 216 870 669 1047 582 135 1500 500 175 1747.6 166 1473 1200 920 483 2.9 2.1 2.2 1.3 1.3 4.7 2.7 5.3 2.9 2.4 2.7 6.0 2.7 2.2 2014-2016 (3 years) 2012-2015 (4 years) 2014-2018 (5 years) 2015-2020 (6 years) 2014-2020 (7 years) 2014-2016 (3 years) 2014-2020 (7 years) 2014-2015 (2 years) 2014-2018 (4years) 2014-2016 (3 years) 2014-2018 (5 years) 2014-2017 (4 years) 2011-2013 (3 years) 2014-2020 (7 years) Total 4 360 11 465 2.6 In 2014, three regional joint programming workshops were held: in Guatemala (for Latin America/Caribbean), Ethiopia (East, Central and Southern Africa) and Ivory Coast (West Africa). The EU also produced guidance based on accumulated good practice, which has been careful to focus on its voluntary, partner country-focused nature. It was found that: Joint programming is starting to be used to improve sector coordination, including better divisions of labour within sectors; the greater use of joint aid modalities (such as budget support, pooled funding, delegated cooperation, and trust funds etc.); increased sector dialogue; and the facilitating of work with non-EU donors. There are first moves towards results frameworks (joint goals/indicators built on partner country systems) as well as joint monitoring, evaluation and reporting. We are seeing the first steps towards reduced duplication and other transaction costs for example through the full or partial replacement of bilateral programming documentation with joint programming documents. Joint programming can facilitate potential ties-in with other policy actions such as: CSO roadmaps, early warning systems in fragile countries, and budget support risk assessments. Joint programming shows the EU speaking with one voice, enabling it to make full use of the weight of its presence in a partner country including facilitating joint EU positions. 1.4.2.Cooperation with the donor community Close cooperation with the OECD on development issues continued at all levels in 2014. Throughout the year, the Commission participated actively in the work of the OECD Development Assistance Committee (DAC), of which the EU is a full member. In particular, the Commission contributed to the discussions at senior and ministerial level covering issues of great relevance for the future global development agenda such as the post-2015 development goals, the Global Partnership for Effective Development Cooperation and financing for development. The latter was the subject of the July Tidewater conference in which Commissioner Piebalgs participated and the DAC Ministerial meeting of December at which a landmark reform of the concessionality provisions for development loans was agreed, finally recognising EIB loans to developing countries. The Commission also contributed to promoting a more active involvement of emerging donors into OECD's work. As part of the broader EU-US strategic dialogue, the Commission chaired regular consultations with its US counterparts (USAID and US State Department) in the context of the EU-US development dialogue established in 2009, with the aim of deepening cooperation on the ground and at policy level. This dialogue notably contributed to raising political awareness at global level around the post 2015 development agenda and other issues of common interest such as resilience, energy, security and development as well as to better coordinate actions in the field. Further impetus was given by the EU-US Summit in March 2014. As an example of enhanced coordination, a number of EU delegations and USAID offices are now closely cooperating, sharing country assessments, comparing strategies and exploring synergies at sector level. Strong synergies are being developed in food security/resilience, sectors where both sides are very active, notably in the Sahel and the Horn of Africa. Consultations were held with Japan in Brussels in July in the framework of our development dialogue. Field cooperation between JICA and EU Delegations has been enhanced. Dialogue with China has been strengthened on global and regional development issues notably through the visit of Commissioner Mimica to Beijing in November 2014. The annual EU-Korea Development Policy Dialogue held in March 2014 showed that both parties largely share similar development thinking. Relevant contacts with the Korea International Cooperation Agency (KOICA), Exim Bank and civil society organisations were also established. The European Commission continued to deploy efforts to engage with new donors and to progressively shift its relationships with them towards more strategic partnerships on global/regional development issues. 1.4.3.Cooperation with international organisations

United Nations In 2014, the Commission was involved in a variety of different UN-related processes with an impact on development. Council Conclusions based on Commission inputs were adopted with an EU position preparing for the UN Conferences on Small Islands Developing States (September 2014) and on Landlocked Developing Countries (November 2014). Both conferences had a successful outcome with active EU participation and high EU visibility. Within the framework on the UN General Assembly (UNGA) and the UN Economic and Social Council (ECOSOC), the Commission contributed actively to the preparation and outcome of development-related High Level Meetings, notably the Development Cooperation Forum and the High Level Political Forum (July 2014), the UNSG Summit on Climate Change and the UNGA Special Session on the review of the Programme of Action of the International Conference on Population and Development (September 2014). The Commission also contributed to more than 40 UNGA resolutions with direct impact on development, including the adoption of the report of the Sustainable Development Goals Open Working Group, other resolutions and the UN ECOSOC ministerial declaration. Cooperation with UN agencies, funds and programmes was actively pursued with particular emphasis on giving visibility to our partnership. In 2014 the Commission also renewed a Memorandum of Understanding with the United Nations Programme for Environment (UNEP) which was signed at the 1st UNEA in Nairobi on 25 June. A number of UN organisations also participate in the EU framework programme for research and innovation. Throughout the whole duration of the 7th Framework Programme, UN organisations that were more active in EU-funded research projects were the World Health Organisation (WHO) and the UN Organisation for Education and Scientific Cooperation (UNESCO). International Financial Institutions (IFIs) Strategic and strong engagement with IFIs was reflected in the WBG/IMF Spring and October Annual meetings in Washington that addressed the Global Economic Outlook, actions needed to revive the world economy and the global financial architecture. The Commission continued its efforts in the framework of its strategic partnerships with the IMF for Sub-Saharan Africa, Middle East and North Africa (e.g. through contributions to trust funds, strengthening transparency on revenue from natural resources, and improving tax policy and administration). The initial implementation of the new WBG strategy brings greater convergence with the EU vision for the post 2015 agenda; a result to which the high-level dialogue with the WB certainly contributed. The Commission has continued its operational cooperation with IFIs, in particular multilateral development banks, both global and regional, providing a substantial contribution to the funding of their activities. This also included negotiating new framework agreements with the WB and the IMF and other IFIs to adapt to the new Financial Regulation. G20 In 2014, the Australian Presidency narrowed the Development Working Group (DWG) agenda by prioritising Financial Inclusion, Infrastructure and Domestic Resource Mobilisation. The EU supported these priority areas by involving Member States in efforts to drive down remittance costs, by linking infrastructure work to a German-led initiative involving the private sector in green infrastructure investment and by developing programmes to support tax authorities in Low Income Countries (LICs). The EU has also continued to press for action on the critically important Fossil Fuel Subsidy Reform and provided strong support for representation of groups such as the African Union at Summits and other meetings. For 2015, Turkey's key themes are inclusiveness, implementation and investment for growth. Turkey considers the DWG essential to understand LICs' needs and ensure G20 actions have a positive impact on LICs. There is general agreement on the importance of the DWGs efforts in contributing to a successful outcome from the post 2015 and Financing for Development discussions. Turkey is prioritising Infrastructure, Food Security and Financial Inclusion. Domestic Resource Mobilisation and Human Resource Development work is proceeding and Turkey has introduced a new initiative on Inclusive Business. G7 In 2014, the main focus of the G7's development related work continued to be on agriculture and food security. The ‘New Alliance to improve food security and nutrition' was expanded. The EU continued to play an active role with other G7 leaders to build the partnership between partner governments in Africa, G7 countries and the private sector to lift 50 million people out of poverty in the next ten years by supporting agricultural development. Priorities for 2015 include supporting the responsible management of global supply chains. The EU will in particular support the German “Partnership for sustainable textiles” initiative, which aims to promote responsible business practices in developing countries to implement social, ecological and economic standards for the entire value chain of raw material, textile and clothing production. 1.4.4.Coherence between development and other policies Policy Coherence for Development (PCD) emerged in international discourse in the early 1990s against a background of growing concerns as to the effectiveness of aid. The underlying assumption is that limiting policy incoherence and developing synergies among different policies will lead to increased effectiveness of development cooperation. This principle is embedded in the Lisbon Treaty which stipulates that ‘the Union shall take account of the objectives of development cooperation in the policies that it implements which are likely to affect developing countries’ (art. 208). The inclusion of PCD in its fundamental law sets the EU apart on the international stage.

PCD is a legal and policy commitment shared by the Commission and EU Member States. Since 2007, progress on PCD mainly in the Commission and in EU Member States is monitored in a biennial report published by the Commission. In 2014 preparations were made for the publication of the fifth EU PCD Report which is scheduled for the second half of 2015. Measurement of impacts of policies and of progress on PCD is a long term endeavour due to the complexity of issues and considered as work in progress. In 2014, the Commission continued its efforts to strengthen PCD at various levels. A potentially strong tool for promoting PCD are Impact Assessments (IA) which are compulsory under Commission rules for every major new policy initiative at EU level. IA allow ex-ante assessments of policy proposals and can help to ensure that impacts on developing countries are taken into account at an early stage of the preparation of a political initiative. In the context of the revision of IA Guidelines under the lead of the Commission Secretariat General, Commission services made a proposal for a specific toolkit to give guidance on how to take account of development objectives in other EU policies. Based on the 2014 Commission Work Programme, policy initiatives which potentially have an impact on developing countries were identified with the aim of raising awareness among Commission services of the relevance of PCD at early stages of the initiatives. EU Delegations can play an important role in providing feedback on the impacts of wider EU policies on our partner countries. For this reason, the Commission and the European External Action Service (EEAS) jointly conducted a first reporting exercise from Delegations at the beginning of 2014 with 41 reports received covering 62 partner countries. Based on the feedback, the Commission started to develop a targeted training tool on PCD based on e-learning and on-site sessions to further raise knowledge and awareness in Delegations. Among other things, a regular reporting mechanism from Delegations on PCD is envisaged and Delegations are being encouraged to engage in regular discussions on PCD with partner countries, Member States and civil society at country level. Encouraging external assessments and PCD-targeted research are important tools for strengthening PCD. In this context, the Commission launched an external study that explores the links between the EU trade regimes and growth, poverty reduction and economic diversification in developing countries using innovative approaches. The study will provide useful information for the improvement of coherence between trade and development policy. It is scheduled for publication during the first half of 2015. The international reflection on the post-2015 framework has further highlighted the key importance of ‘beyond-aid’ issues, including PCD. The Commission organised in June 2014 an international workshop on ‘How to promote policy coherence and PCD-approaches in the Post-2015 framework?’. The aim of the workshop was to engage Member States, academics and civil society in a dialogue and reflection on the role of policy coherence and PCD in particular as an important mean of implementation for the new global agenda. Also, the Commission has been actively contributing to the work of the OECD PCD-unit with a view to knowledge sharing and further developing tools for measuring progress on PCD. During the year, the Commission convened two meetings of the network of Member States PCD focal points. This informal network allows sharing of information on national processes and PCD priorities and alerts Member States to important events and issues relevant for PCD at EU level. It also allows reflection on cross-cutting issues and disseminating good practices. 1.5.Outlook 2015 2015 is a pivotal year. Through the adoption of the post-2015 development agenda, the international community will be called upon to respond in a transformative manner to fundamental challenges facing the world today: eradicating poverty, achieving inclusive and sustainable development, ensuring the promotion and protection of all human rights and fundamental values as the basis for peaceful and prosperous societies. Two high-level international meetings provide the opportunity to agree on a new agenda including a set of Sustainable Development Goals (SDG). They are the Third International Conference on Financing for Development in Addis Ababa in July and the United Nations (UN) summit for the adoption of the post-2015 development agenda in New York in September. This process must bring together and build upon earlier initiatives, in particular the Millennium Development Goals and the 'Rio+20' Conference on Sustainable Development. It will also have important implications for negotiations under the UN Framework Convention on Climate Change. Significant progress has already been achieved through various processes at the UN. The report of the Open Working Group on SDGs, the report of the Intergovernmental Committee of Experts on Sustainable Development Financing, and the UN Secretary-General Synthesis Report provide key contributions and show that a global agreement on an ambitious post-2015 agenda is within reach. The EU has consistently played an important and constructive role in these processes, providing key inputs and engaging actively with partners at all levels. The European Commission Communications of February 2013, July 2013 and June 2014, Febuary 2015 and the Council Conclusions of June 2013, December 2013 and December 2014 articulate the EU's vision for a post-2015 agenda that needs to be global and universal, incorporating all three dimensions of sustainable development: social, economic and environmental. Implementing such a far-reaching agenda presents a complex challenge but also a unique opportunity to redefine and strengthen the way the global community works together. In order to deliver the post-2015 agenda, a new global partnership for poverty eradication and sustainable development is required. For this global partnership to succeed, all parties will have to contribute. The EU is committed to playing its full part, working constructively with others, and looking forward to their active participation.





2.Chapter 2 - Implementation: geographic overview Introduction EU development cooperation is mainly based on three geographical instruments: the European Development Fund (EDF), the Development Cooperation Instrument (DCI) and the European Neighbourhood and Partnership Instrument (ENPI). The EDF is the main source of financing for EU assistance to Sub-Saharan Africa (except South Africa), the Caribbean and the Pacific regions (ACP). The fund is separate from the EU budget: it is directly funded by EU Member States and managed by a specific committee. The DCI and the ENPI are financed by the EU budget. The DCI covers geographic programmes supporting cooperation with 47 developing countries in Latin America, Asia and Central Asia, the Gulf region (Iran, Iraq and Yemen) and South Africa, as well as thematic programmes benefiting all developing countries. The ENPI supports the European Neighbourhood Policy (ENP) and covers 17 countries in the EU's southern and eastern neighbourhoods. While some figures and data can be found throughout this chapter, detailed financial information can be found in Chapter 5, Financial Annex. This narrative report does not cover the Common Foreign and Security Policy (CFSP) or the current Instrument for Pre-Accession Assistance (IPA) but they are included in Tables 5.22 and 5.23 in Chapter 5. A short section of this report is dedicated to humanitarian assistance. 2.1.European Neighbourhood and the Middle East 2.1.1.European Neighbourhood & Russia Introduction Since its launch in 2004, the European Neighbourhood Policy (ENP) has been a crucial aspect of the EU's foreign policy. It addresses issues of strategic importance, such as security, stability and prosperity in our neighbourhood, by aiming to foster sustainable and resilient economies and free and inclusive societies. It is a policy of long-term engagement, based on mutually beneficial integration and cooperation. 2014 saw some remarkable positive developments with the signature of three Association Agreements with Georgia, the Republic of Moldova and Ukraine. This new generation of agreement includes provisions on a deep and comprehensive Free Trade Area (AA/DCFTA), putting in place the most ambitious contractual relations so far established with neighbourhood partners. Furthermore, relations with Morocco and Tunisia have been strengthened and continue to reflect the depth and breadth of reform efforts in these countries. The democratic transition in Tunisia has been particularly positive. Some important progress in the area of mobility also took place as the Republic of Moldova successfully implemented all the benchmarks set in its Visa Liberalisation Action Plan (VLAP), which allowed Moldovan citizens to enjoy a visa-free travel regime in the Schengen countries from spring 2014. Tunisia and Jordan also signed a Mobility Partnership with the EU in 2014. However, 2014 was also a year of major challenges in the EU's neighbourhood. Events in Ukraine, as well as increasing Russian pressure on other Eastern partners, have put Europe's political realities into focus. Inside and outside Syria, millions of people have been displaced because of the actions of the Assad regime and Da’esh, and remain in dire need of assistance. Atrocities and human rights violations and abuses were perpetrated as well by Da'esh, Jabhat al-Nusra and other terrorist groups in the region. Renewed hostilities in Gaza have shattered livelihoods and devastated already fragile infrastructures. Libya's statehood remained at stake; the absence of functioning public authorities, the increase of violence and the lack of control of migratory flows to and from the country created favourable conditions for irregular migration and trafficking in human beings to Europe. Poverty in the neighbourhood was on the rise impacting children in particular and other vulnerable groups in society. In this difficult context the EU has maintained a high level of engagement, for which the instruments offered by the ENP have played a central part. The new European Neighbourhood Instrument (ENI), in place since March 2014, allows for faster and more targeted EU financial assistance, amounting to EUR 15.4 billion for the period 2014-2020. In addition, civil society organisations and local authorities are better and more closely involved in preparing, implementing and monitoring EU support. The ENI provides a predictable, long term envelope to support the agreed reform priorities in each country. Countries where substantial democratic reforms are being introduced may also receive additional funding under an umbrella programme worth up to 10 % of the value of the instrument. For this purpose, the EU assessed performance of partner countries on implementing 'deep democracy' and respect for human rights on the basis of the ENP Progress Reports.

Substantial support is also provided under ENI for regional and cross-border initiatives. Blending of EU funding with IFIs plays an increasing role, especially though the Neighbourhood Investment Facility (NIF). Funding for civil society has also substantially increased. But the ENI is not suitable or sufficient for all needs, especially where a crisis response requires substantial additional funding at short notice. ENI funding is therefore complemented by support under other instruments, such as the Instrument Contributing to Stability and Peace (ICSP), EU humanitarian funding (ECHO) or the European Instrument for Democracy and Human Rights (EIDHR). Under these or other instruments, additional funds may need to be mobilised as required by the evolving situation in the region, for example, the responses in Syria and Ukraine. Ukraine remained under special measures in terms of financing, whilst no programming has taken place for Syria. A number of special ENI facilities have been introduced or improved including the NIF, a facility to support partners having concluded a Deep and Comprehensive Free Trade Area (DCFTA) with the EU, and enhanced higher education support under Erasmus+. Joint programming with Member States is being developed in some countries in the medium-term. The current dynamic situation in the neighbourhood requires a flexible approach to planning and implementation and the EU has used all the flexibility available to it. The EU has moved with unprecedented speed and fast-tracked approval processes to meet the crisis needs in Ukraine, combining major ENI support, Macro-Financial Assistance and technical support from the Ukraine Support Group. An EU Trust Fund for Syria has been created to help address particular needs there. Russian Federation The EU's relations with Russia in 2014 were dominated by the issue of Russia's illegal annexation of Crimea and continuing destabilisation of Ukraine including aggression by Russian armed forces on Ukrainian soil. The 32nd EU-Russia Summit took place in a restricted format on 28 January in Brussels, focusing on Ukraine and the Eastern Partnership (EaP). On that occasion President Putin, while stating that Russia had no problem of principle with the EaP, raised concerns regarding effects on the Russian economy of the EU-Ukraine Deep and Comprehensive Free Trade Area. It was agreed to hold technical consultations to explain how the EU's Association Agreements with several EaP partner countries will bring benefits to all partners, Russia included. The Summit also discussed the joint vision of a Common Economic Space from Lisbon to Vladivostok, which could help overcome current differences, provided the sides could first agree on a New EU-Russia Agreement, better compliance with WTO and other commitments, and more constructive cooperation in our Common Neighbourhood. A joint statement of 28 January 2014 on combating terrorism was adopted. In March, the European Council decided on a graduated approach of restrictive measures (including visa bans and asset freezes) on certain Russian and Ukrainian individuals responsible for the violation of Ukraine's sovereignty and territorial integrity. Negotiations on a New Agreement and the Visa Dialogue as well as preparations for the Summit foreseen for June were suspended. Further to European Council Conclusions of 16 July and 30 August, in September targeted measures were taken against Russia in areas including access to capital markets, defence, dual-use goods and sensitive technologies, including those in the energy sector. Furthermore several EU-Russia cooperation programmes were suspended. The European Investment Bank and the European Bank for Reconstruction and Development also suspended the signing of new financing operations in Russia. At the end of the year the list of Russian and Ukrainian individuals and entities subject to a travel ban and an asset freeze stood at 132 persons (including persons providing support to or benefitting Russian decision-makers) and 28 entities. Russia took retaliatory measures including a ban on the import of certain foods from the EU and several non-EU countries and also imposed a travel ban on Members of the European Parliament without disclosing who were affected. Following a series of EU-Russia-Ukraine talks on Russian gas deliveries and prices, the EU on 30 October brokered a deal between Russia and Ukraine enabling gas supplies to continue until the end of March 2015. Among its main points were the settling of Ukrainian gas debt based on a preliminary price, the final price/debt to be determined through pending arbitration, and the agreement on modalities for new gas deliveries. In addition the European Commission worked with International Financing Institutions to ensure that Ukraine had the necessary financial means to honour its part of the agreement. The parties also agreed to ensure safe gas transit through Ukraine to the European Union. Alleging EU opposition, Russia in December declared a stop to the ‘South Stream’ project which would have routed gas deliveries to the EU through Bulgaria and Serbia, bypassing Ukraine as transit country. An alternative pipeline through Turkey was suggested during President Putin's visit to Ankara, with the aim to carry Russian gas to the EU with Greece as entry point. Despite the adverse circumstances EU-Russia communication channels remained open and political dialogue continued in 2014 on issues high on the EU's foreign policy agenda such as Syria, Iran, the broader Middle East and Afghanistan. The EU also continued cooperation with Russia on global issues such as counter-terrorism, non-proliferation of weapons of mass destruction, organised crime, illegal trafficking and energy security. The human rights situation in Russia remained a source of deep concern in 2014, characterised by further steps to restrict press freedom and civil society activities, in particular online, and incapacitate the opposition including by attempting to close down NGOs on the basis of administrative or judicial court cases. The EU’s concerns in