Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions From Monterrey to the European Consensus on Development: honouring our commitments {COM(2007) 163 final} {COM(2007) 164 final}
Date: 2007-04-04
Institutions: European Commission
Subjects: development aid, development policy, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.4.2007 
COM(2007) 158 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

From Monterrey to the European Consensus on Development: honouring our 
commitments 

{COM(2007) 163 final} 
{COM(2007) 164 final} 

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TABLE OF CONTENTS 

Introduction ................................................................................................................................ 3 

1. 

2. 

3. 

4. 

The European Union honoured its overall commitments to increase aid in 2006 – but 
meeting the next target dates will call for further, concerted efforts ........................... 3 

Aid for Trade must increase so that developing countries can take advantage of trade 
liberalisation – an implementation plan will be needed............................................... 4 

The quality and effectiveness of EU aid must improve – the Commission has 
proposed a code of conduct on division of labour ....................................................... 5 

Conclusion.................................................................................................................... 6 

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INTRODUCTION 

With  the  adoption  of  the  European  Consensus  on  Development  in  December 2005,  the 
European  Union  (EU)  placed  development  at  the  heart  of  its  external  action  and  gave  it  an 
unprecedented  political  dimension.  For  the  first  time  ever  a  shared  vision,  binding  the 
Council, the Parliament, the Commission and each of the 27 Member States, gives the EU’s 
action  the  reference  framework  required  to  deal  more  effectively  with  poverty  and  growing 
inequalities  in  the  world,  and  to  be  more  coherent  in  tackling  such  global  challenges  as 
climate change, energy, migration, security and the social dimension of globalisation. This is 
an  important  dimension  of  the  Sustainable  Development  Strategy  which  is  now  included  in 
the EU's general objectives. 

While recognising the number and variety of instruments for promoting development, the EU 
has  decided  to  increase  aid  substantially,  believing  it  more  necessary  than  ever  to  speed  up 
progress towards the Millennium Development Goals.  

Since  the  Monterrey  Conference  on  Development  Financing  in  2002,  the  EU  has  made  a 
commitment  to  increase  its  development  aid.  It  is  in  particular  committed  to  collectively 
dedicate 0.39% of its gross national income to development aid in 2006 and 0.56% in 2010 in 
order to reach 0.7% in 2015. By actively contributing to the adoption of the Paris Declaration 
on aid effectiveness, the EU has also committed itself to a radical overhaul of its aid system.  

The  EU  recognises  that  partner  countries  have  the  primary  responsibility  for  their  own 
development  and  commits  the  EU  to  providing  adapted  assistance  that  responds  to  their 
specific  needs.  But  by  investing  in  social  sectors,  in  infrastructures,  in  institutional  reforms 
and supporting efforts towards good governance, the EU assumes its share of the work. 

An  unprecedented  political  framework  has  been  mapped  out  between  developing  countries 
and  the  EU,  bringing  together  aid  and  policy  dialogue.  Europe  has  a  duty  to  make  a 
difference. Its influence must be commensurate with the resources it provides. 

The  Council  has  mandated  the  Commission  to  follow  up  these  commitments.  The  latest 
studies  have  prompted  it  to  make  three  proposals  to  ensure  that  the  commitments  are 
honoured in full.  

1. 

THE EUROPEAN UNION HONOURED ITS OVERALL COMMITMENTS TO INCREASE AID 
IN  2006  –  BUT  MEETING  THE  NEXT  TARGET  DATES  WILL  CALL  FOR  FURTHER, 
CONCERTED EFFORTS 

In 2002, the EU commited itself to collectively dedicate 0.39% of its gross national 
income to development aid in 2006. The EU hasn't only reached this objective, it has 
gone  beyond.  The  EU  collectively  devoted  0.42%  of  its  gross  national  income  to 
development aid in 2006.  

The following comparative figures help gauge the scale of the effort: 

•  In  2006  EU  development  aid  amounted  to  €48 billion,  an  appreciable  increase 

from €35 billion in 2004 and €45 billion in 2005. 

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•  The aid of one Member States has exceeded 1% of its gross national income. 

•  The  ten  Member  States  which  acceded  to  the  EU  in  2004  and  were  previously 
providing  very  little  aid  have  since  doubled  the  volume  of  their  aid,  thereby 
demonstrating  their  commitment  to  the  Community  acquis  and  their  will  to 
achieve their individual targets. 

•  This  aid  effort  represents  more  or  less  €100  per  EU  citizen  a  year;  it  also 
represents €40 for every person living on less than a dollar a day in the developing 
countries. 

By  way  of  comparison,  US  aid  stands  at  0.17%  of  gross  national  income  and  the 
equivalent  of  €53  per  US  citizen;  the  figures  for  Japan  are  0.25%  and  €69 
respectively. 

This collective effort masks marked disparities between Member States. While some 
devote more than 0.80% of national income to development, far more than the most 
ambitious  targets,  others  continue  to  fall  far  short  of  the  average  or  their  own 
objectives  or  register  a  decline  of  their  aid  in  2006  compared  with  2005.  It  is  also 
clear that a substantial share of the additional aid takes the form of debt alleviation. 
In the years to come, the challenge will be to continue to increase development aid as 
a whole while reducing the share of debt alleviation. 

As  regards  the  breakdown  of  EU  aid,  the  priority  given  to  Africa  is  being  upheld, 
since  at  least  half  of  the  EU’s  aid  is  already  going  to  this  continent,  which  should 
receive an additional €10 billion a year from 2010. 

Overall,  the  EU  is  well  on  the  way  to  honouring  its  commitments  by  2010,  but 
whether  these  trends  and  results  are  borne  out  will  depend  on  the  capacity  to 
mobilise political and public support. The increase recorded in some Member States’ 
aid  has  partly  been  the  result  of  debt  forgiveness  or  other  one-off  operations, 
especially  humanitarian  aid.  Sustaining  growth  aid  budgets  will  require  the 
mobilisation of new flows of programmable aid in future.  

This encouraging but uneven situation, plus the need for close monitoring of trends 
in EU aid budgets lead the Commission to recommend that each Member State draw 
up a road map by the end of 2007 to ensure a gradual increase in official aid flows by 
2010  and  2015  in  order  to  prevent  any  slippage  on  collective  and  individual 
commitments.  

2. 

AID  FOR  TRADE  MUST  INCREASE  SO  THAT  DEVELOPING  COUNTRIES  CAN  TAKE 
ADVANTAGE  OF  TRADE  LIBERALISATION  –  AN  IMPLEMENTATION  PLAN  WILL  BE 
NEEDED 

The  poorest  countries’  share  of  international  trade  remains  marginal  in  spite  of  the 
tariff  preferences  they  enjoy,  especially  on  the  European  market.  Beyond  technical 
assistance  to  the  implementation  of  trade  policies  (including  for  instance  custom 
policies), a consensus has developed in recent years as to the need to go further and 
incorporate  into  cooperation  strategies  support  for  the  development  of  productive 

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capacity,  support  for  trade-related  infrastructure  and  support  to  overcoming  other 
supply constraints. 

In  December 2005  the  EU  pledged  to  collectively  increase  its  aid  for  trade  to 
€2 billion  a  year  from  2010  for  all  developing  countries,  €1 billion  of  it  in 
Community aid and €1 billion in bilateral aid from the Member States. 

The Commission and the Member States must agree a joint strategy on aid for trade, 
as  requested  by  the  Council  in  October 2006.  According  to  the  Commission,  this 
strategy should contain the following essential elements: 

–  the  announced  increase  in  EU  aid  for  trade  to  €2 billion  from  2010.  The 
Commission is on the right track to respect its own commitment. Member States 
should reach a level of €600 million by 2008 to respect theirs. If this wouldn't be 
the case, specific corrective measures should be envisaged; 

–  the  attribution  of  a  significant  share  of  these  resources  to  ACP  countries  in  the 
context of the Economic Partnership Agreements (EPA). The strategy will have to 
specify the amount envisaged for ACP countries; 

–  a  process  to  identify  the  partner  countries’  needs  on  the  basis  of  their  own 
assessments  and  existing  international  mechanisms.  The  involvement  of  civil 
society  and  the  private  sector  in  this  process  is  crucial  and  must  be  facilitated. 
Furthermore, the  sustainability  of measures and reforms backed by the EU must 
be guaranteed; 

–  more  effective  aid  through  the  implementation  of  the  announced  reforms,  in 
particular progress towards joint programming, the division of labour, alignment 
and more effective aid arrangements, such as budget aid and cofinancing; 

–  the constitution by the ACP regions of regional funds to cover needs identified in 
the context of the EPAs and to support regional integration by channelling EU aid 
in a coherent manner. Created in 2006, the Infrastructure Partnership for Africa is 
the first such initiative. A number of Member States are already contributing, and 
the others are invited to join this concerted effort. 

3. 

THE QUALITY AND EFFECTIVENESS OF EU AID MUST IMPROVE – THE COMMISSION 
1 
HAS PROPOSED A CODE OF CONDUCT ON DIVISION OF LABOUR

The  expansion  and  multiplication  of  development  cooperation  activities  in  recent 
years  has  resulted  in  a  system  which  is  complex  and  costly  to  manage  for  partner 
countries. 

The  harmonisation  effort  actively  promoted  by  the  Commission  lies  at  the  heart  of 
the Paris Agenda on aid effectiveness, which the EU wholeheartedly endorsed.  

1 

COM(2007) 72. 

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There are three fundamental aspects: 

–  the division of labour. The Commission has proposed a voluntary and flexible EU 
code  of  conduct  to  promote  complementarity  between  donors  in  the  interests  of 
greater effectiveness; 

–  ownership and the alignment of cooperation programmes on the partner countries’ 
strategies  and  procedures.  Though  enshrined  in  the  Paris  Declaration  and  the 
European  Consensus,  these  principles  are  still  far  from  being  realised.  Not  only 
are  countries’  budget  cycles  not  respected  but  a  welter  of  conditionalities 
undermine the continuity and predictability of aid. The Commission believes it is 
now time to apply the concept of a "contract" based on tangible results in relation 
to  the  Millennium  Development  Goals  rather  than  the  annual  checking  of  each 
individual donor’s traditional conditionalities; 

–  aid modalities. Programme aid and budget aid must quickly become the preferred 
delivery  methods,  without  excluding  other  aid  modalities  when  they  are  more 
appropriate.  The  dispersion  of  aid  across  many  small  projects  –  as  in  Tanzania, 
where  there  are  600  projects  of  less  than  €1  million  in  the  health  sector  alone  – 
generates unnecessary costs and lessens effectiveness.  

These reforms must take place against a backdrop of more decisive progress towards 
joint programming of bilateral and Community aid.  

4. 

CONCLUSION 

The EU has taken, at the very highest political level, ambitious development commitments by 
deciding to raise its aid gradually to a level of 0.7% of gross national income by 2015 (€164 
per European citizen a year) and taking the requisite steps to increase the overall effectiveness 
of EU aid as a whole.  

We  need  to  move  from  words  to  deeds.  This  calls  for  the  honouring  of  commitments  and 
political  will.  There  is  no  question  of  changing  the  institutional  balance  in  the  EU  or 
increasing the Commission’s powers in the sphere of development. It is simply a matter of a 
stronger, more efficient EU that holds out better prospect for the weakest and most vulnerable 
people on the planet. To offer this prospect the EU has to act collectively. 

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