Proposal for a Council Decision on the position to be adopted by the Community within the ACP-EC Council of Ministers concerning the multiannual financial framework for the period 2008-2013 and the modifications to be inserted in the agreement revising the Partnership Agreement between the members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000 and revised in Luxembourg on 25 June 2005
Date: 2006-03-17
Institutions: European Commission
Subjects: ACP countries, aid policy, cooperation agreement, development policy, inclusion in the budget

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 17.3.2006 
COM(2006) 132 final 

Proposal for a 

COUNCIL DECISION 

on the position to be adopted by the Community within the ACP-EC Council of 
Ministers concerning the multiannual financial framework for the period 2008-2013 and 
the modifications to be inserted in the agreement revising the Partnership Agreement 
between the members of the African, Caribbean and Pacific Group of States of the one 
part, and the European Community and its Member States, of the other part, signed in 
Cotonou on 23 June 2000 and revised in Luxembourg on 25 June 2005 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

In  view  of  the  conclusion  of  the  negotiations  on  the  revision  of  the  ACP-EC  Partnership 
Agreement,  signed  in  Cotonou  on  23  June  2000  (hereinafter  called  the  “Cotonou 
Agreement”),  the  Council  made  a  minimum  provisional  commitment,  for  the  post-9th  EDF 
(European Development Fund) multiannual financial framework for cooperation, to “maintain 
its  aid  effort  to  ACP  States  at  least  at  the  same  level  as  that  of  the  9th  EDF,  not  including 
balances;  to  this  shall  be  added,  based  on  Community  estimates,  the  effects  of  inflation, 
growth within the European Union and enlargement to 10 new Member States in 2004”. The 
equivalent  of  this  commitment  in  monetary  terms,  based  on  Community  estimates,  came  to 
€22 682 million. However, no agreement was reached on the period to be covered (2008-2012 
or 2008-2013), the final figure (with a possible conditional tranche above the minimum) and 
the funding mechanism (budgetisation or a 10th EDF). The provisional multiannual financial 
framework included in the revision of the Cotonou Agreement1 therefore provides in Annex 
Ia, point 3, that “any required amendments to the mult-annual financial framework or relative 
parts  of  the  Agreement  shall  be  decided  by  the  Council  of  Ministers  by  derogation  from 
Article 95 of this agreement”.  

The  European  Council  of  16  December  2005  then  decided  on  the  period  to  be  covered 
(2008-2013), the amount allocated to the ACP (€22 682 million in current prices, excluding 
support expenditure) and the funding mechanism (inter-governmental European Development 
Fund),  so  the  revised  Cotonou  Agreement  can  now  be  modified.  As  the  period  covered 
extends beyond the traditional five-year period, not only Annex Ia has to be amended but also 
Article 95 of the Cotonou Agreement, which defines the duration of the agreement, and the 
related  financial  protocols  and  revision  clauses.  To  ensure  coherence,  it  is  also  proposed  to 
amend  the  existing  9th  EDF  financial  protocol  in  order  to  clarify  the  period  it  covers 
(Annex I). 

The  10th  EDF  multiannual  financial  framework  for  the  period  2008-2013  confirms  the 
principle of a sunset clause, which will be fully compatible with possible budgetisation later. 
It also opens the way for subsequent increases in Member State contributions in the light of 
their recent commitments to increase their official development assistance and to channel at 
least 50% of those increases to Africa. Moreover, the multiannual financial framework builds 
in  enough  flexibility  to  allow  for  further  accommodation  following  the  2008-2009  budget 
review. 

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OJ L 287, 28.10.2005 

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Proposal for a 

COUNCIL DECISION 

on the position to be adopted by the Community within the ACP-EC Council of 
Ministers concerning the multiannual financial framework for the period 2008-2013 and 
the modifications to be inserted in the agreement revising the Partnership Agreement 
between the members of the African, Caribbean and Pacific Group of States of the one 
part, and the European Community and its Member States, of the other part, signed in 
Cotonou on 23 June 2000 and revised in Luxembourg on 25 June 2005 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 310 in conjunction with Article 300(2) thereof, 

Having regard to the Partnership Agreement between the members of the African, Caribbean 
and Pacific Group of States (hereinafter called ‘the ACP’) of the one part, and the European 
Community and its Member States, of the other part, signed in Cotonou (Benin) on 23 June 
2000  and  revised  in  Luxembourg  (Grand  Duchy  of  Luxembourg)  on  25  June  2005 
(hereinafter called ‘the ACP-EC Agreement’),2 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Council Decision 2005/446/EC of 30 May 2005 has set at 31 December 2007 the date 
beyond  which  the  funds  of  the  9th  European  development  fund  (hereinafter  ‘EDF’) 
can no longer be committed, apart from the resources used to finance the Investment 
Facility3. 

Annex  Ia  to  the  revised  Agreement  signed  in  Luxembourg  on  25 June  2005 
concerning  the  multiannual  financial  framework  of  cooperation  under  the  ACP-EC 
Partnership  Agreement  for  the  period  after  the  9th  EDF  does  not  specify  the  exact 
period  covered  (five  or  six  years),  the  amount  or  the  financing  instrument  (general 
budget or new EDF). 

Annex Ia does, however, lay down that: “Any required amendments to the multiannual 
financial framework or relative parts of the Agreement shall be decided by the Council 
of Ministers by derogation from Article 95” of the ACP-EC Agreement. 

The  European  Council  of  16 December  2005  decided  on  the  exact  period  to  be 
covered (six years), the amount (€22 682 million at current prices) and the financing 
mechanism (10th EDF). 

2 
3 

OJ L 287, 28.10.2005. 
OJ L 156, 18.6.2005. 

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HAS DECIDED AS FOLLOWS: 

Sole Article 

The  Community  proposes  to  adopt  within  the  ACP-EC  Council  of  Ministers  the  following 
position on the multiannual financial framework for the period 2008-2013 on the basis of the 
draft Decision of the ACP-EC Council of Ministers at annex.  

Minor changes to the draft decision may be agreed without need for a further decision by the 
Council. 

Done at Brussels, […] 

For the Council 
The President 

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ANNEX 

Draft 

Decision of the ACP-EC Council of Ministers of 

specifying the multiannual financial framework for the period 2008-2013 by modifying 
the Agreement revising the Partnership Agreement between the members of the 
African, Caribbean and Pacific Group of States of the one part, and the European 
Community and its Member States, of the other part, signed in Cotonou on 23 June 
2000 and revised in Luxembourg on 25 June 2005 

THE ACP-EC COUNCIL OF MINISTERS, 

Having regard to the Partnership Agreement between the members of the African, Caribbean 
and Pacific Group of States (hereinafter called the ‘ACP’) of the one part, and the European 
Community and its Member States, of the other part, signed in Cotonou (Benin) on 23 June 
2000  and  revised  in  Luxembourg  (Grand  Duchy  of  Luxembourg)  on  25  June  2005 
(hereinafter  called  the  ‘ACP-EC  Agreement’),4  and  in  particular  paragraph  3  of  Annex  Ia 
thereto 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Annex  Ia  to  the  revised  Agreement  signed  in  Luxembourg  on  25 June  2005 
concerning  the  multiannual  financial  framework  of  cooperation  under  the  ACP-EC 
Partnership  Agreement  for  the  period  after  the  9th  European  Development  Fund 
(hereinafter  called  the  ‘EDF’)  lays  down  that  the  EU  shall  maintain  its  aid  effort  to 
ACP  States  under  the  revised  ACP-EC  Partnership  Agreement  at  least  at  the  same 
level as that of the 9th EDF, also adding the effects of inflation, growth within the EU 
and  enlargement  to  10  new  Member  States  in  2004,  but  does  not  specify  the  exact 
period  covered  (five  or  six  years),  the  amount  or  the  financing  mechanism  (general 
budget or new EDF). 

At  the  conclusion  of  the  negotiations  on  the  revision  of  the  ACP-EC  Partnership 
Agreement  in  Brussels  on  23 February  2005  the  EU  undertook  to  propose  a  precise 
amount and the application period as soon as possible.  

Annex  Ia  to  the  ACP-EC  Agreement  lays  down  that:  “Any  required  amendments  to 
the  multiannual  financial  framework  or  relative  parts  of  the  Agreement  shall  be 
decided by the Council of Ministers by derogation from Article 95”. 

The  European  Council  of  16 December  2005  decided  on  the  exact  period  to  be 
covered (six years), the amount (€22 682 million at current prices) and the financing 
mechanism (10th EDF), 

4 

OJ L 209, 11.08.2005; OJ L 287, 28.10.2005. 

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HAS DECIDED AS FOLLOWS: 

Sole Article 

The  annexed  modifications  to  the  Partnership Agreement between the  members of the ACP 
Group of States of the one part, and the European Community and its Member States, of the 
other part, signed in Cotonou on 23 June 2000 and revised in Luxembourg on 25 June 2005, 
are approved by the ACP-EC Council of Ministers. 

Done at Port Moresby, […] 

For the Council 
The President 

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Annex to the Decision of the ACP-EC Council of Ministers 

specifying the multiannual financial framework for the period 2008-2013 by 
modifying the Agreement revising the Partnership Agreement between the members 
of the African, Caribbean and Pacific Group of States of the one part, and the 
European Community and its Member States, of the other part, signed in Cotonou 
on 23 June 2000 and revised in Luxembourg on 25 June 2005 

a) Article 95(2) of the ACP-EC Agreement is replaced by the following text: 

“Financial protocols for multiannual periods shall be drawn up by the ACP-EC Council 
of Ministers.” 

b) Point 1 of Annex I, the Financial Protocol, of the ACP-EC Agreement is replaced by 
the following text: 

“1. 
For  the  purposes  set  out  in  this  Agreement  the  overall  amount  of  the 
Community’s  financial  assistance  from  1 March  2000  until  31 December 2007  shall  be 
EUR 15 200 million. This period may be revised by decision of the ACP-EC Council of 
Ministers in accordance with point 3 of Annex Ia to this Agreement.” 

c) Following Annex Ib is inserted in the ACP-EC Agreement:  

“Annex Ib - multiannual financial framework for the period 2008-2013 

1. 

2. 

For  the  purposes  set  out  in  this  Agreement  and  for  a  period  commencing  on 
1 January  2008,  the  overall  amount  of  the  Community’s  financial  assistance 
shall be EUR 22 682 million under the 10th European Development Fund. 

This  sum  shall  be  made  immediately  available  on  entry  into  force  of  the 
multiannual financial framework. It shall be allocated to the areas of cooperation 
as follows: 

(a)  EUR 18.940  million 

to  finance  national  and  regional 

indicative 

programmes. This allocation will be used to finance: 

i. 

ii. 

the national indicative programmes of the ACP states in accordance 
with  Articles  1  to  5  of  Annex  IV  to  this  Agreement  concerning 
implementation and management procedures;  

the regional indicative programmes of support for regional and inter-
regional  cooperation  and  integration  of  ACP  states  in  accordance 
with Articles 6 to 11, 13(1) and 14 of Annex IV to this Agreement 
concerning implementation and management procedures;  

(b)  EUR 2 242  million  to  finance  intra-ACP  and  inter-regional  cooperation 
with many or all of the ACP states, including institutional support for the 
CDE and the CTA referred to in Annex III to this Agreement, and for the 

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joint Parliamentary Assembly referred to in Article 17 of this Agreement, 
in  accordance  with  Articles  12,  13(2)  and  14  of  Annex  IV  to  this 
Agreement concerning implementation and management procedures; 

(c)  EUR 1 500 million to finance the Investment Facility in accordance with 
Annex  II  to  this  Agreement  on  the  terms  and  conditions  of  financing, 
including  EUR  400  million  for  the  interest-rate  subsidies  provided  for  in 
Articles 2 and 4 of that Annex.  

including 

the  Investment  Facility, 

the 
The  operations  financed  under 
corresponding  interest-rate  subsidies,  shall  be  managed  by  the  European 
Investment Bank. An indicative amount of up to EUR 1 700 million in addition 
to the 10th EDF shall be made available by the European Investment Bank in the 
form  of  loans  from  own  resources.  These  resources  shall  be  granted  for  the 
purposes set out in Annex II to this Agreement on the terms and conditions of 
financing  in  accordance  with  the  conditions  laid  down  in  the  statutes  of  the 
European  Investment  Bank  and  the  relevant  provisions  of  the  terms  and 
conditions for investment financing in that Annex. All other financial resources 
under this Protocol shall be administered by the Commission.  

The  remaining  balances  of  the  9th  and  previous  EDFs  may  not  be  committed 
after 31 December 2007 or, should it be later, after the date of entry into force of 
this multiannual financial framework, as well as the amounts decommitted after 
this  date  from  projects  under  these  funds,  except  remaining  balances  of  the 
primary  agricultural  export  receipt  stabilisation  guarantee  system  (STABEX) 
under the EDFs prior to the 9th EDF and the remaining balances of the amounts 
allocated  for  the  financing  of  the  Investment  Facility,  excluding  the  related 
interest-rate subsidies, which will be transferred to the 10th EDF where they will 
be used in accordance with the conditions laid down in this revised Agreement. 

The  overall  amount  of  this  multiannual  financial  framework  shall  cover  the 
period  from  1 January  2008  to  31  December  2013.  After  31  December  2013 
there shall be no further commitments under the 10th EDF, apart from amounts 
allocated to the Investment Facility, excluding related interest-rate subsidies.  

The  Committee  of  Ambassadors,  acting  on  behalf  of  the  ACP-EC  Council  of 
Ministers,  may,  within  the  overall  amount  of  the  multiannual  financial 
framework, 
to  meet  programming 
requirements under one of the allocations provided for in point 2, including the 
reassignment of funds between these allocations. 

take  appropriate  measures 

in  order 

The Community and the Member States may decide at any moment to increase 
the overall amount of this multiannual financial framework, in particular at the 
time of the 2008-2009 review of the Community budget and in the light of the 
commitments  entered  into  by  the  Member  States  to  increase  their  official 
development assistance during the life of this multiannual financial framework. 
The ACP-EC Council of Ministers, will decide on the assignment of funds to the 

3. 

4. 

5. 

6. 

7. 

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instruments referred to in point 2 in accordance with point 3 of Annex Ia to this 
Agreement.  The  release  of  these  additional  amounts  may  be  subject  to  the 
Council’s  prior  examination  of  the  results  of  cooperation  on  the  basis  of  a 
performance  assessment  drawn  up  by  the  Commission.  Such  a  performance 
assessment will in any case be drawn up by the Commission and forwarded to 
the Council before end of 2010. This review will cover both the degree to which 
funds  have  been  committed  and  disbursed  and  results  and  impact.  The 
assessment will also help to evaluate the new resources that will be required for 
financial cooperation under this Agreement after the 10th EDF.  

8. 

Member  States  may  also  decide  at  any  time  on  the  complete  or  partial 
budgetisation  of  the  10th  EDF.  Any  amendment  needed  to  this  multiannual 
financial  framework  or  to  the  relevant  elements  of  the  Agreement  will  be 
decided  by  the  ACP-EC  Council  of  Ministers  in  accordance  with  point  3  of 
Annex Ia to this Agreement. 

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