Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Supporting developing countries in coping with the crisis - Where does the EU go from Doha ? - What prospects for meeting the EU targets of 2010 and 2015 ? - Annual progress Report 2009 on financing for development {COM(2009) 160 final} {SEC(2009) 442} {SEC(2009) 443} {SEC(2009) 445}
Date: 2009-04-08
Institutions: European Commission
Subjects: Doha Round, cooperation agreement (EU), developing countries, economic recession, report, the EU's international role, third country

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.4.2009 
SEC(2009) 444 

COMMISSION STAFF WORKING PAPER 

accompanying the 

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

Supporting developing countries in coping with the crisis 

Where does the EU go from Doha? 

What prospects for meeting the EU targets of 2010 and 2015? 

Annual progress report 2009 on financing for development 

{COM(2009) 160 final} 
{SEC(2009) 442} 
{SEC(2009) 443} 
{SEC(2009) 445} 

EN 

   EN 

 
 
 
 
 
 
 
 
 
 
 
TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

4. 

Introduction .................................................................................................................. 4 

The UN Conference at the highest level on the world financial and economic crisis 
and its impact on development..................................................................................... 5 

The EU priorities.......................................................................................................... 6 

The preparatory process ............................................................................................... 6 

Mobilising domestic financial resources for development – EU focus on economic 
and financial governance.............................................................................................. 7 

Better inclusion of tax and customs related matters in the policy dialogue and 
cooperation programmes for improved governance in developing countries.............. 8 

Closer cooperation under bilateral tax agreements between EU Member States and 
developing countries .................................................................................................. 10 

Supporting an enabling international environment .................................................... 10 

Next steps ................................................................................................................... 11 

Mobilising international resources for development: foreign direct investment and 
other private flows...................................................................................................... 13 

4.1. 

EU trends on mobilising international resources for development............................ 13 

4.1.1.  Support for private investment................................................................................... 13 

4.1.2.  Corporate social responsibility................................................................................... 14 

4.1.3.  Public procurement – a tool to enhance social and environmental standards............ 15 

4.1.4.  The way forward ........................................................................................................ 15 

4.2. 

The role of remittances............................................................................................... 16 

4.2.1.  Remittances: resilient to the global economic crisis? ................................................ 16 

4.2.2.  Main findings of the survey: Continuing progress on implementing the EU 

commitments on remittances...................................................................................... 16 

4.2.3.  What needs to be done?.............................................................................................. 18 

5. 

5.1. 

Increasing international financial and technical cooperation for development ......... 18 

ODA levels are on the increase but by and large insufficient to reach agreed EU and 
international targets.................................................................................................... 18 

5.1.1.  Global ODA trends .................................................................................................... 18 

5.1.2.  EU ODA levels in 2008 ............................................................................................. 21 

5.1.3 

Short-term and medium-term adaption of EU assistance to developing countries in 
response to the financial and economic crisis ............................................................ 23 

EN 

2 

   EN 

 
5.1.4.  Prospects of achieving the collective EU targets for 2010 ........................................ 24 

5.1.5 

Prospects for Member States' individual targets for 2010 ......................................... 26 

5.1.6.  Little progress with multi-annual ODA timetables to enhance ODA predictability.. 32 

5.1.7.  ODA for Africa .......................................................................................................... 32 

5.1.8.  ODA for the least developed countries (LDCs)......................................................... 34 

5.1.9.  Continued need to enhance ODA reporting capacity................................................. 35 

5.1.10.  Outlook....................................................................................................................... 35 

5.2. 

Bridging the finance gap: innovative sources of financing........................................ 36 

5.2.1. 

Innovative finance: a timely matter............................................................................ 36 

5.2.2.  A small number of EU Member States are promoting innovative sources of finance

.................................................................................................................................... 36 

5.2.3.  Actions required for implementing new mechanisms and partnerships allowing an 

increase in financing for development ....................................................................... 38 

6. 

6.1. 

6.2. 

7. 

8. 

8.1. 

External debt: Challenges to debt sustainability in developing countries.................. 39 

The implementation of the HIPC initiative and preserving debt sustainability ......... 39 

Next steps ................................................................................................................... 40 

systemic issues: Working Together for international governance and stability ........ 41 

Copenhagen and beyond: the challenge to mobilise funding for climate change 
related efforts of developing countries....................................................................... 42 

Financing related to climate change and other environmental challenges in the wake 
of the crisis ................................................................................................................. 42 

8.2. 

The follow-up to the EU position for Doha and Poznan:........................................... 45 

9. 

Conclusions ................................................................................................................ 45 

ABBREVIATIONS.................................................................................................................. 47 

Annex 1: UN Convention against Corruption (Merida Convention) - State of signature and 
ratification by the EU (on 15.03.2009) .................................................................................... 50 

Annex 2: The Commission methodology applied for analysing ODA indications of EU 
Member States:......................................................................................................................... 51 

Annex3: Africa – infrastructure priorities................................................................................ 52 

Annex 4 – Infrastructure priorities: Union for the Mediterranean ........................................... 53 

EN 

3 

   EN 

 
1. 

INTRODUCTION 

A series of high level events (the UNCTAD XII Conference, the Third High Level Forum on 
Aid  Effectiveness,  held  in  Accra,  and  the  two  UN  High  Level  Events  on  the  MDG  and  the 
Special  Needs  of  Africa,  held  in  New  York)  made  development  a  key  priority  on  the 
international agenda of 2008, culminating with the Doha Financing for Development Follow-
up Conference in December.  

The  global  crisis  is  having  a  serious  impact  on  developing  countries.  The  international 
community  has  repeatedly  underscored  that  development  needs  to  be  an  integral  part  of  the 
response to the crisis. This promise has to be turned into practical actions; keeping in line with 
the financing for development commitments given at EU and G8 level is a central pillar for 
this. The focus on development will remain sharp throughout 2009; no international debate on 
global  issues  (e.g.  financial  stability,  economic  recovery,  global  governance  architecture, 
climate  change.)  can  escape  from  integrating  the  development  dimension  into  the  design  of 
solutions. This year's Monterrey report1 is set against this intense international background.  

A strong, united and visible EU position played a key part in making the Doha conference a 
success,  producing  an  explicit  action-oriented  Declaration.  One  major  success  in  Doha  was 
that,  UN  member  states  reconfirmed  their  aid  commitments,  including  0.7%  of  /GNI  for 
ODA,  and  also  called  for  establishing  rolling  timetables  for  scaling  up  aid.  The  aid 
effectiveness  principles  agreed  in  Paris  and  Accra  were  prominently  stressed  and  support 
was  expressed  for  exploring  innovative  sources  of  financing.  Governance  and  better 
mobilisation  domestic  resource  were  seen  as  other  vital  areas  to  develop.  A  shared 
understanding  was  expressed  that  the  new  global  challenges  need  to  be  tackled  in  a 
comprehensive and inclusive fashion.  

This  strong  position  on  the  part  of  UN  members  was  made  possible  by  the  clear  and 
comprehensive  commitments  given  by  EU  in  the  common  position  for  the  Conference 
adopted  by  the  General  Affairs  and  External  Relations  Council    on  11  November.  The  EU 
needs to honour the commitments given. The 2008 Monterrey report follows the structure of 
the 2002 Monterrey Declaration, but also includes the new subjects decided in Doha. It will 
provide baseline information for monitoring progress on these additional topics.  

The EU reconfirmed, in 2008, its role as the world leader in terms of development financing: 
It increased its spending by 8% reaching almost €50 billion, wh ich is 0.40% of EU GNI. This 
is  an  all-time  high  in  current  prices  and  corresponds  to  almost  €100  spent  on  aid  per  EU 
inhabitant.  This  aid  increase  is  a  commendable  correction  of  the  downward  trend  the  EU 
registered in 2007; aid disbursements have though not yet gone back to the 0.42% ODA/GNI 
level achieved in 2006. Moreover, the prospects for reaching the EU collective commitment 
to provide 0.56% of its GNI as ODA by 2010 remain bleak; reaching this target would require 
additional ODA disbursements of around €20 billion by 2010 from current levels. Most of the 
Member States are increasing their ODA, but can reach their individual targets of 0.51% or 
0.17% of GNI only through demonstrating substantial extra efforts. 

1 

Comprising  the  Communication  COM(2009)160  of  08.04.2009  'Supporting  developing  countries  in 
coping with the crisis' and four related Staff Working Papers, this one and Aid for Trade ("2009 Aid for 
Trade Monitoring Report" - SEC(2009) 442), Aid effectiveness ("Aid Effectiveness after Accra – where 
does  the  EU  stand?"  -  SEC(2009)  443)  and  on  the  Millennium  Development  Goals  ("Millennium 
Development Goals – impact of the financial crisis on developing countries" - SEC(2009) 445) 

EN 

4 

   EN 

 
                                                 
The  EU  needs  to  remain  in  line  with  the  level  of  ambition  and  commitments  it  showed  in 
Monterrey  and  Doha.  Implementation  of  the  action-oriented  Doha  Declaration-the 
culmination  of  the  international  high-level  events  in  2008  and  a  success  at  a  time  of  a 
worsening  financial  and  economic  crisis  must  follow  closely.  A  clear  common 
understanding emerged in Doha that shared responsibility can only work if global governance 
processes  and  structures  are  inclusive  enough  and  reflect  the  global  partnership,  with  the 
voices  and  interests  of  the  rich,  the  emerging  and  the  poorest  all  taken  into  account.  This 
concern underpinned the decision taken at Doha that the UN should hold a conference at the 
highest level on the world financial and economic crisis and its impact on development (at the 
beginning  of  June  2009).  Core  concerns  of  the  Doha  Declaration  could  resurface  in  this 
context.  

This  report  is  the  Commission's  seventh  annual  assessment  of  how  Europe  has  been 
delivering  on  the  commitments  made  to  contribute  to  the  broad  international  financing  for 
development  agenda  since  Monterrey  (2002)  and  evaluates  how  Europe  has  moved  from 
rhetoric to reality since then. The report builds on and assesses the opinions expressed by the 
27  Member  States  (EU-27)  in  their  replies  to  the  monitoring  questionnaire  ("Monterrey 
survey  2009”2)  and  to  an  additional  survey  of  early  2009  that  had  the  objective  to  explore 
what  measures  Member  States'  are  considering  in  their  cooperation  programmes  and 
instruments  to  react  to  the  impact  of  the  crisis  on  developing  countries.  The  results  of  this 
analysis  will  inform  the  EU  position  in  the  forthcoming  international  meetings.  Individual 
"donor profiles" of the Member States and the Commission are being prepared to reflect the 
positions they expressed in the survey.  

The initial and continuing EU commitments on financing for development raise the questions 
of to the volume and sources of financing, the quality of aid, support for mobilising domestic 
financial  resources  for  development,  mobilising  additional  international  financial  flows  and 
trade, creating a development-friendly international governance system and dealing with new 
challenges.  Building  on  shared  concerns  the  EU  commitments  have  been  deepened  and 
extended and now also cover governance with a focus on tax issues and financial transparency 
and on foreign direct investment and remittances  

Progress on the EU commitments on aid for trade, Aid effectiveness and on the Millennium 
Development Goals is assessed in three separate Staff Working Papers3. 

2. 

THE UN CONFERENCE AT THE HIGHEST LEVEL ON THE WORLD FINANCIAL 
AND ECONOMIC CRISIS AND ITS IMPACT ON DEVELOPMENT 

The  United  Nations  will  hold,  in  June  2009,  a  conference  at  the  highest  level  on  the  world 
financial  and  economic  crisis  and  its  impact  on  development.  The  decision  to  organise  this 
event was taken at the Doha Financing for Development Follow-up Conference in December 
2008  as  stated  in  paragraph  79  of  the  Doha  Declaration  on  Financing  for  Development. 
Following the G20 London summit in April 2009 this conference will be another mile-stone 
international event this year. The most important meeting of 2009 is, likely to, be the United 
Nations Framework Convention on  Climate Change  in Copenhagen. All these events will – 

http://ec.europa.eu/development/icenter/repository/EU-progress-on-financing-for-development-and-

2 
MDGsQuestionnaire11-12-2008.pdf 
3 

see footnote 1 

EN 

5 

   EN 

 
                                                 
once again – illustrate that financing for development remains a key contribution to tackling 
global challenges. These conferences also offer great opportunities for inclusive global debate 
on the impact of the financial, economic and environmental crisis and should produce a global 
response  to  mitigate  the  negative  impact  of  the  crisis  on  development  and  particularly  the 
most vulnerable developing countries with limited resilience  

The European Union should engage actively and constructively in the UN Conference and the 
preparatory process. 

2.1. 

The EU priorities 

Numerous international conferences and events in 2008 - On Financing for Development in 
Doha,  Aid  Effectiveness  in  Accra,  MDGs  and  Africa  in  New  York  and  Climate  Change  in 
Poznan – produced important decisions and commitments to achieve the global development 
goals, including the MDGs, to meet aid targets, to make aid more effective and to carry out 
inclusive  reforms  of  global  governance.  The  European  Union's  strong  united  stance, 
leadership and determination were necessary in order to secure these significant successes in 
2008. The same united EU resolve is needed even more now to face the global financial and 
economic crisis. 

The Commission considers that the EU's positions for the UN Conference should be based on 
the  global  partnership,  which  is  the  foundation  for  all  EU  development  efforts.  This  means 
that  all  partners,  rich,  emerging  and  poor  are  expected  to  contribute  to  the  decisions, 
commitments and actions needed to tackle the impact of the crisis on development. 

As regards the substance of the EU contribution to and priorities for the UN Conference, the 
Communication "Supporting developing countries in coping with the crisis", accompanied by 
this  and  other  Staff  Working  Papers,  puts  forward  concrete  proposals  for  the  EU  to  take 
forward  in  the  various  international  fora,  including  in  the  UN  .  These  proposals  and  the 
ensuing Council Conclusions should form the core of the EU input to the UN Conference and 
should focus on: 

•  honouring aid commitments;  

•  leveraging other means of providing assistance and s mobilising resources  

•  taking and facilitating counter-cyclical actions;  

•  improving aid effectiveness;  

•  cushioning  the  social  impact,  protecting  the  most  vulnerable  and  supporting  the  real 

economy; 

•  making a "governance pact" with developing countries; 

•  improving openness, efficiency and inclusiveness of global governance systems. 

2.2. 

The preparatory process 

At the time of writing, the consultations on the arrangements for the UN Conference were still 
in progress in the UN General Assembly. It seems likely that the Conference will take place 
from 1to3 June 2009 in New York. The UN General Assembly consultations/negotiations on 

EN 

6 

   EN 

 
the outcome are expected to start in early April with a view to adopting a political declaration 
during the Conference itself. 

3. 

MOBILISING DOMESTIC FINANCIAL RESOURCES FOR DEVELOPMENT – EU FOCUS ON 
ECONOMIC AND FINANCIAL GOVERNANCE 

the  consequent  requirements  relating 

The  Doha  Declaration  reaffirmed  that  each  country  bears  prime  responsibility  for  its  own 
to  democratic 
development  and  underscored 
governance, respect of human rights and rule of law. In the field of economic governance, it 
one  a  particular  EU  priority  was  to  tackle  taxation,  where  there  is  potential  for  further 
mobilisation of domestic resources. The current financial and economic crisis underscores the 
importance  of  raising  domestic  resources,  which  will  -  in  the  long-term  -  provide  more 
predictable,  secure  and  sustainable  sources  for  development  and  enable  poor  countries  to 
grow  out  –  over  time  -  of  the  aid  dependency.  The  Doha  Declaration  there  are  strong 
commitments  on  tax  reform,  the  improvement  of  public  financial  management  and 
combating tax evasion leading to more efficient tax collection and broadening the tax base 
with an overall view of making tax systems more pro-poor. Underscoring that each country is 
responsible for its tax system, the Declaration stresses the need to support national efforts in 
these  areas  by  stepping  up  technical  assistance  and  enhancing  international  cooperation  and 
participation  in  addressing  international  tax  matters.  The  Declaration  also  meets  related  EU 
concerns  with  strong  messages  on  battling  corruption,  capital  flight  and  on  enhancing 
international tax cooperation. 

The  deepening  financial  and  economic  crisis  has  revealed  the  vulnerability  of  advanced, 
emerging and developing economies in a globalised world. Tax havens4 and under regulated 
international  financial  centres,  both  in  developed  and  developing  countries,  which  do  not 
operate  according  to  the  principles  of  transparency  and  information  exchange,  have  come 
under  the  enhanced  scrutiny5.  The  assets  supposed  to  be  hosted  in  the  world's  tax  havens 
exceed by a wide margin the annual global flows of ODA to developing countries6, and their 
origin  is  often  linked  to  capital  flight,  money  laundering  as  well  as  tax  fraud  and  tax 
avoidance. Tax havens deprive other countries of revenues urgently required to foster social 
development and other policy objectives, while in vulnerable economies, which have turned 
themselves into tax havens, poor pockets of the population persist and have little or no gain 
nothing from the off shore status of their country. 

In  a  global  economy,  the  EU  and  developing  countries  have  a  common  interest  in  building 
sustainable  tax  systems  that  interoperate  smoothly  notably  in  order  to  mobilize  domestic 
financial resources for development. In this respect namely good governance in the tax area 
(including  through  transparency,  exchange  of  information  and  fair  tax  competition,)  has  an 

4 

5 
6 

As defined in the 1998 OECD report "Harmful tax competition: an emerging global issue". The OECD 
lists four key factors to determine whether a jurisdiction is a tax haven – i) the jurisdiction imposes no 
or only nominal taxes; ii) there is a lack of transparency; iii) there are laws or administrative practices 
that  prevent  the  effective  exchange  of  information  for  tax  purposes  with  other  governments  on 
taxpayers benefiting from the no or nominal taxation; iv) there is an absence of a requirement that the 
activity be substantial. Certain jurisdictions which had not yet made commitments to transparency and 
effective exchange of information have been identified by the OECD's Committee on Fiscal Affairs as 
uncooperative  (Andorra,  Liechtenstein,  Monaco).  This  could  change  in  view  of  their  recent 
commitments 
Cf. Outcome of the London G20 Summit in April 2009  
OECD estimates range from US$5 to 7 trillion 

EN 

7 

   EN 

 
                                                 
important  role  to  play.  For  developing  countries,  good  governance  in  the  tax  area  could 
contribute  to  balancing  the  need  to  stimulate  growth  with  generation  of  the  revenues 
necessary  to  implement  policies  to  eradicate  poverty.  For  developed  countries,  it  will 
contribute  to  the  sustainability  of  their  tax  systems,  thus  creating  room  for  manoeuvre  for 
providing development assistance. 

Against this background the EU, in its common position for the Doha Conference, has called 
for  national  and  international  action  to  fight  corruption,  tax  fraud  and  illicit  flows  and  has 
itself taken concrete commitments, expressed in the EU Guidelines for the Doha Conference7. 
In line with those commitments this report reflects the views expressed by EU Member States 
in  return  to  the  survey  and  takes  account  of  the  current  thinking  within the  Commission  on 
how to promote good governance in tax matters. 

3.1. 

Better  inclusion  of  tax  and  customs  related  matters  in  the  policy  dialogue  and 
cooperation programmes for improved governance in developing countries 

24  EU  Member  States  and  the  European  Commission  provide  active  support  to  developing 
countries'  customs,  judiciary  and  tax  administrations  in  one  or  another  form.  Support  is 
namely provided through 

•  technical  assistance  programmes  in  countries  covered  by  the  European  Neighbourhood 

Policy (ENP) and a number of ACP countries; 

•  programmes  for  the  reform  and  modernization  of  customs  administrations  focusing,  in 
particular,  on  the  application  of  customs  legislation  and  on  training  regarding  selected 
aspects,  such  as  rules  of  origin,  valuation,  classification,  security,  Intellectual  Property 
Rights, enforcement etc;  

•  bilateral  cooperation  with  developing  countries  or  their  regional  organisations  (different 

formats, e.g. technical assistance, study programmes, budget support); 

•  financial  contributions  to  activities  of  international  organisations,  e.g.  the  World  Bank 
(WB)/  International  Finance  Corporation  (IFC),  United  Nations  Office  on  Drugs  and 
Crimes  (UNODC),  United  Nations  Democracy  Fund  (UNDEF)  and  the  United  Nations 
Development Programme (UNDP); 

•  cooperation with international organisations, such as the International Centre for Tropical 
Agriculture (Centro International de Agricultural tropical, CIAT), OECD, Inter-American 
Development  Bank  (IDB),  the  International  Development  Law  Organisation  (IDLO)  and 
the World Customs Organisation (WCO), that has developed the Framework of Standards 
to  secure  and  facilitate  global  trade..  Moreover  Member  States  refer  to  support  they 
provide  through  cooperation  with  civil  society  organisations  such  as  the  Association  of 
European  Parliamentarians  for  Africa  (AWEPA)  or  through  the  Investment  Climate 
Facility for Africa (ICF); 

At  Commission  level  the  governance  policy  dialogue  with  developing  countries  benefitting 
from  support  under  the  European  Neighbourhood  Policy  (ENP)  and  with  ACP  countries  is 
underpinned  by  financial  incentives  for  governance  reforms,  including  in  the  area  of 

7 

Adopted by the GAERC on 11 November 2008 - Guidelines for EU participation in the International 
Conference on Financing for Development (Doha, 29 November - 2 December 2008) 

EN 

8 

   EN 

 
                                                 
public  finance  management  and  taxation  (Governance  Facility  for  ENP  countries  to 
support  implementation  of  national  Action  Plans  under  the  overall  Partnership  and 
Cooperation  or  Association  Agreements  or;  the  governance  incentive  tranche  for  ACP 
countries with Governance Action Plans). 

Economic  and  financial  statistics  in  developing  countries  provide  primary  tools  for 
economic governance and for formulating appropriate policies, especially in response to the 
global crisis. Endemic tax evasion is closely linked with statistical misreporting and thus mis-
measurement.  

For most (21) of the EU Member States (21) the commitments on the part of partner countries 
to general good governance principles is one criterion for aid allocation, but there has been, 
until  recently,  no  special  focus  on  good  governance  in  the  tax  area.  The  financial  crisis  has 
sharpened the awareness of the importance of good governance especially in the tax area and 
triggered  new  initiatives  reflecting  a  change  of  approach,  such  as  the  strong  messages  from 
the G8 and the G20 , most recently at the London Summit of 2 April 20098 or the French-
Germany  initiative  on  uncooperative  jurisdictions  in  tax  matters  launched  in  October 
2008.  DE  followed  this  initiative  up  with  the  proposal  to  create  an  International  Tax 
Compact (ITC), as announced at Doha. The declared aim of the ITC is to contribute to the 
fight against tax evasion and abusive tax avoidance a major cause of loss of domestic revenue 
in  developing  countries.  The  ITC  should  promote,  on  the  international  and  domestic  levels, 
tax  systems  make  developing  countries  more  effective  at  fighting  tax  evasion  and 
inappropriate tax practices in order to achieve national and international development goals. 
Strengthening the ownership, voice and participation of developing countries in international 
tax  fora,  raising  confidence  in  tax  systems,  promoting  domestic  accountability  and  state 
building are among the key objectives that the ITC will attempts to promote in the context of 
international development.  

Sound,  transparent  and  reliable  customs  systems  contribute  to  increasing  domestic  public 
revenues,  reducing  evasion  and  smuggling  and  facilitating  access  to  international  markets. 
Cooperation amongst customs administrations and between customs authorities and business 
or  other  government  agencies  must  be  further  developed.  Customs  administrations  need  to 
ensure that they have the capacity and skills perform all customs controls most efficiently and 
effectively.  Capacity  building  for  customs  administrations  promoting  regulatory  compliance 
to facilitate legitimate trade and increase participation in international supply chains should be 
provided,  for  instance  under  the  Columbus  Programme  of  the  WCO.  Furthermore,  the  fight 
against  corruption  and  the  protection  of  Intellectual  Property  Rights  remain  important  tasks 
that should be enhanced over the years to come. In this context revised Arusha Declaration of 
the  WCO  (June  2003)  will  remain  the  reference  document  for  all  Customs  administrations. 
The  comments  made  by  the  Member  States  in  response  to  the  survey  show  that  the  WCO 
Framework  of  Standards  to  secure  and  facilitate  global  trade  could  be  considered  the 
appropriate international instrument for stronger information sharing and for risk management 
and detection of fraud and other threats.  

With  a  view  to  sustaining  lasting  capacity  building  for  customs  administrations  around  the 
world additional standards for combating counterfeiting and other forms of illicit activity are 
required. This will further promote a strong partnership and tight links between developed and 

8 

G20 London Summit Leaders' Statement of 02.04.2009, §15 

EN 

9 

   EN 

 
                                                 
developing  countries  and  their  economies,  a  partnership  that  is  also  important  to  foster  an 
attitude of mutual and active cooperation.  

3.2. 

Closer cooperation under bilateral tax agreements between EU Member States 
and developing countries 

However,  a  number  of  Member  States  have  concluded  or  started  negotiating  Double  Tax 
Conventions (DTC) and Tax Information Exchange Agreements (TIEAs) with developing 
countries.  These  Member  States  also  state  that  the  agreements  that  they  have  concluded  or 
started  negotiating  are  in  line  with  the  principles  of  good  governance  in  the  tax  area.  Other 
Member  States  indicated  that  they  have  not  entered  into  negotiations  of  new  or  into 
renegotiations of existing bilateral tax agreements with developing countries. 

Agreements recently concluded by EU Member States with developing countries: 

Bilateral double taxation conventions: BE (with Moldova), CY (with Moldova and 
Qatar), CZ (with Ethiopia, Armenia and Syria), NL (with Uganda, Ghana and South 
Africa), PT (with Guinea Bissau), RO (with India), and IE (with Vietnam). 

Developing  countries  currently  involved  in  negotiations  on  double  taxation 
conventions and of tax information exchange agreements with EU Member States:  

Algeria,  Azerbaijan,  Barbados,  Bosnia  and  Herzegovina,  Botswana,  Brazil,  China, 
Costa  Rica,  Cuba,  the  Democratic  Republic  of  Congo,  Egypt,  Ethiopia  Georgia, 
Ghana,  India,  Indonesia,  Iran,  Kenya,  Kyrgyz  Republic,  Libya,  Mexico,  Moldova, 
Mongolia,  Morocco,  Oman,  Pakistan,  Peru,  South  Africa,  Sudan,  Tajikistan, 
Tanzania, Tunisia, Turkey, Turkmenistan, Ukraine and Vietnam. 

The  OECD  provides  continuously  updated  information  on  this  type  of  agreements 
concluded by EU Member States with developing and developed countries9. 

3.3. 

Supporting an enabling international environment 

Creating  an  international  environment  that  is  conducive  to  the  fight  against  corruption,  tax 
evasion and illegal financial flows requires determined national and international action. The 
EU has identified several key conventions and initiatives, where progress is necessary and has 
given firm commitments to international initiatives to prevent money laundering, financing of 
terrorism and proliferation, international co-operation and on the repatriation of stolen assets, 
to  promote  the  principles  of  transparency  and  accountability  over  natural  resource  revenue, 
either directly or under the United Nations (Merida) Convention against Corruption.  

The Commission has conducted an initial assessment of the state of play and will continue to 
monitor progress in the future on: 

•  The  UN  (Merida)  Convention  against  Corruption),  which  entered  into  force  in 
December 2005: So far 22 EU countries have ratified the Convention. The EC acceded to 
the Convention in November 2008. Estonia, the only country that has not yet signed, plans 
ratification  in  2009.  Ireland  in  the  process  of  adjusting  its  domestic  legal  framework, 
whereas  Germany  has  not  yet  initiated  the  necessary  adjustment  of  domestic  law,  a 

9 

http://www.oecd.org/topic/0,3373,en_2649_33767_1_1_1_1_37427,00.html 

EN 

10 

   EN 

 
                                                 
precondition  for  ratification.  The  Czech  Republic  and  Italy  are  the  other  Member  States 
that  have  yet  to  ratify  the  Merida  Convention,  it  would  be  best  to  do  so  before  2010,  to 
keep to the commitment given prior to Doha10 (see annex 1 for an overview of the state of 
ratification of the Merida Convention). 

•  The  OECD  Convention  on  Combating  Bribery  of  Foreign  Officials  in  International 
Business Transactions: Seven EU Member States are not yet in a position to access to the 
Convention, because they must first be a party to the OECD Working Group on Bribery in 
International Business Transactions. 

•  International  cooperation  on  repatriation  of  stolen  assets,  in  particular  the  Stolen  Assets 
Recovery Initiative (STAR): While several Member States have expressed interest in the 
initiative and are committed to considering support in the future, to date only seven have 
reported that they support the initiative (CY, EL, ES, FR, IT, PL and UK). 

•  The  situation  is  similar  with  the  Extractive  Industries  Transparency  Initiative  (EITI), 
which currently has the support of eight MS (BE, EL, ES, FI, FR, IT, SE and UK) and the 
EC.  Transparent  management  of  natural  resources  is  essential  if  revenues  earned  from 
them  are  to  contribute  to  national  development.  The  EITI  and  other  international 
initiatives, such as the Kimberley Process, the Forest Law Enforcement, Governance and 
Trade  (FLEGT)  Action  Plan  and  the  Action  Plan  to  Fight  Illegal  Logging  should  be 
strengthened. 

Extractive Industries Transparency Initiative (EITI) 

Good  governance  and  transparency  in  extractive  industries  in  resource-rich 
developing  countries  can  substantially  increase  domestic  revenues  and  as  a  result 
foster  growth  and  reduce  poverty,  especially  in  Africa.  The  EITI  is  a  coalition  of 
governments, companies, civil society, investors and international organizations that 
aims  to  promote  transparency  and  accountability  in  the  extractive  industries,  by 
supporting  the  verification  and  full  publication  of  company  payments  and 
government  revenues  from  oil,  gas  and  mining.  In  2007  the  EU  endorsed  the  EITI 
politically in the statements at the 9th EU-Africa Summit. 

As part of the "Thematic Programme for Environment and Sustainable Management 
of Natural Resources including Energy" (ENTRP) in 2007 the European Commission 
committed  €  0.53  million  to  the  EITI  via  th e  World  Bank  Multi-Donor  Trust  Fund 
(MDTF). 

3.4. 

Next steps 

In  follow-up  to  the  GAERC  Conclusions  of  November  2008  and  the  Doha  Conference  on 
financing for development: 

•  It will be important to assess progress, in the context of the forthcoming mid-term review 
of the EC external cooperation instruments (including the 10th EDF) among others, in the 
actual  implementation  of  the  commitments  made  in  the  area  of  governance,  including  in 
the  area  of  taxation,  and  to  consider  a  reallocation  of  funds  to  countries  that  are 

10 

Council Conclusions GAERC 11.11.2008 (EU Guidelines for Doha) 

EN 

11 

   EN 

 
                                                 
satisfactorily implementing commitments they have taken on governance and, conversely 
consider  cancellation  of  funds  earmarked  from  countries  that  did  not  implement  their 
commitments.  There  is  also  a  need  that  Member  States  adopt  a  similar,  coordinated 
approach for their national cooperation programmes. 

•  It  is  essential  to  promote  and  strengthen  technical  assistance  to  developing  countries  in 

order 

•  to improve capacities in the area of economic and financial statistics, linked to tax 

and customs reform measures; 

•  to improve the soundness and effectiveness of their tax and customs systems and 

•  to  support  efforts  of 

the  developing  countries 

in  meeting 

international 

commitments they have taken in tax and customs cooperation matters, 

while ensuring effective donor coordination at relevant levels for maximum synergy. 

•  Practical  aspectis  of  customs  cooperation  and  good  governance  in  tax  matters  should 
become an integral part of Member States' policy dialogue with developing countries. ; 

•  Specific  provisions  related  to  good  governance  in  the  tax  area  should  be  included  in  all 
relevant EC agreements with developing countries, in line with the Council Conclusions of 
May 200811. Such provisions can provide a framework for future bilateral tax cooperation 
between the Member States and developing countries; EU Member States and developing 
countries  to  should  enhance  tax  cooperation  between  themselves,  among  others  by 
establishing  a  wide  network  of  tax  information  exchange  agreements  with  developing 
countries and, if appropriate, through bilateral double tax conventions; 

•  Coordinated  action  by  the  Member  States  is  required,  as  already  outlined  in  the 
Commission Communication on the application of anti-abuse measures in the area of direct 
taxation12; 

•  Member States that have not yet done so, need to accelerate the ratification of the United 
Nations Convention against Corruption (Merida) to ensure adherence of the EU as a whole 
before 2010; 

•  Strengthened  support  to  specific  initiatives  aiming  at  improved  governance  and 

transparency in the extractive sector, namely to the EITI, is important; 

•  Member States need to expand their support to STAR and other relevant initiatives such as 
the  International  Tax  Compact,  aiming  to  increase  domestic  tax  revenues  in  developing 
countries. 

11 
12 

ECOFIN Council of 14 May 2008 
COM(2007) 785) 10.12.2007 

EN 

12 

   EN 

 
                                                 
4. 

MOBILISING  INTERNATIONAL  RESOURCES  FOR  DEVELOPMENT:  FOREIGN  DIRECT 
INVESTMENT AND OTHER PRIVATE FLOWS 

The  private  sector  can  play  a  key  role  in  achieving  economic  growth  and  development. 
Private  international  capital  flows  exceed  aid  flows  by  a  great  margin  and  are  vital 
complements additions to national and international development efforts, as they contribute to 
competitiveness, creating jobs and transferring, knowledge and technology. 

Promotion  of  sustainable  international  investment  flows  is  a  central  challenge.  On  the 
one hand, this requires greater support for private investment by both international institutions 
and source countries' governments, by providing specific development-oriented financial tools 
such  as  lending  facilities  and  risk  guarantees.  On  the  other,  there  is  a  need  for  private 
stakeholders to engage actively in development processes, taking into account the social and 
environmental dimensions of their activities. 

Remittances are another sizeable financial flow to developing countries and a significant 
source of income, going directly to private households. For some countries, remittances flows 
are far more significant than ODA. 

The  next  two  sections  discuss  measures  to  promote  sustainable  international  private 
investment and remittances flows implemented in the EU by both public authorities and the 
private sector. 

4.1. 

EU trends on mobilising international resources for development 

4.1.1. 

Support for private investment 

There  is  general  agreement  on  the  importance  of  private  international  capital  flows 
for development. However, trends establishment and use of specific financial tools to 
support private investment in developing countries are rather mixed. Almost half the 
Member  States  have  specific  tools,  mostly  in  the  form  of  investment  guarantees, 
dedicated  funds,  preferential  loans,  and  venture  capital.  Specific  financial  tools  for 
small and medium-sized enterprises (SMEs) have been developed both by European 
institutions  (the  European  Investment  Fund  –  EIF)  and  by  a  number  of  Member 
States.  Some  Member  States  also  have  special  programmes  to  promote  of 
microfinance. 

In  a  number  of  EU  countries  specific  tools  and  projects  are  run  by  dedicated 
institutions, such as national development agencies and national development banks. 
At European level, the European Bank for Reconstruction and Development (EBRD) 
and  the  European  Investment  Bank  (EIB)  are  supporting  infrastructure,  private 
investments and the overall business climate in developing countries. 

Any comprehensive assessment of progress made in this area, should also take into 
account that the lack of specific financial tools in a number of Member States should 
not be interpreted as lack of support for private investment in developing countries. 
This objective can be pursued using standard financial tools. 

Several  Member  States  did  not  specify  any  target  countries.  However,  Africa 
emerges  as  the  main  overall  target  region,  followed  by  Latin  America  and  the 
Caribbean. There is also strong interest in supporting private investment in the major 
emerging economies - notably China, India, and Russia. 

EN 

13 

   EN 

 
4.1.2.  Corporate social responsibility 

A  large  majority  of  Member  States  (19)  are  actively  promoting  adoption  and 
implementation  of  corporate  social  responsibility  (CSR)  principles  and  standards. 
their  strong  commitment  to  multilateral 
Most  Member  States  expressed 
initiatives, such as: 

•  the  OECD  Guidelines  for  Multinational  Enterprises,  a  set  of  voluntary 
principles  covering  a  broad  range  of  issues  in  business  ethics,  including 
employment  and  industrial  relations,  the  environment,  information  disclosure, 
competition,  financing,  corruption,  taxation,  science/technology,  and  the  need  to 
encourage suppliers and sub-contractors also to comply. 

•  The  UN  Global  Compact,  a  voluntary  corporate  citizenship  initiative  for 
companies committed to, supporting and enacting a set of ten core values in the 
areas of human rights, labour, the environment and anti-corruption. 

•  the  International  Labour  Organisation  (ILO)  conventions  and  recommendations 

on labour standards. 

•  Austria and the UK also stressed their involvement drafting the ISO standard on 
social  responsibility  (ISO  26000),  which  aims  at  offering  guidance  on  socially 
responsible behaviour to both public and private organizations. 

•  Specific initiatives undertaken by Member States include: 

–  public information and awareness-raising by means of campaigns, conferences, 
training,  specific  education  programmes,  direct  involvement  of  economic 
missions etc; 

–  public private partnerships programmes; 

–  dialogue  with  stake-holders,  with  different  degrees  of  institutionalisation 

(consultations, coordination mechanisms, committees); 

–  support for initiatives led by the private sector; 

–  inclusion  of  CSR  among 

the  essential  criteria  for  access  to  public 

funding/specific financial tools. 

The attitude of companies to CSR principles varies across countries. Some Member 
States (AT, IT, PT, and UK) highlighted autonomous CSR-related activities launched 
by  the  private  sector,  such  as  adoption  of  codes  of  conduct,  establishment  of  CSR 
platforms,  training  activities,  and  awareness  rising  campaigns.  Other  (PL  and  LV) 
stated  that  private  companies  were  still  showing  very  limited  interest  in  CSR.  The 
importance  of  corporate  social 
G20  Summit  of  London  underscored 
responsibility of all firms13. 

the 

13 

G20 London Summit Leaders' Statement of 02.04.2009, §15 

EN 

14 

   EN 

 
                                                 
4.1.3.  Public procurement – a tool to enhance social and environmental standards 

In  the  EU  public  procurement  is  subject  to  a  series  of  rules,  which  lay  down 
transparent open procedures and ensure fair conditions of competition for suppliers. 
Directives 2004/17/EC and 2004/18/EC set this public procurement framework in the 
EU, the objective of which is to ensure best value for taxpayers' money. Under this 
Community legislative package there are a number of references to the inclusion 
of environmental and social criteria in public purchasing, which are considered 
secondary  objectives  of  this  legislation.  The  EC  public  procurement  Directives 
include  clauses  which  give  public  contracting  authorities  the  possibility  to  address 
environment/social objectives by allowing the inclusion of environmental and social 
criteria  at  all  the  stages  of  the  procurement  procedure  (technical  specifications, 
selection and ward, contract performance), provided that the are linked to the subject 
matter of the contract and are objective, transparent and non-discriminatory in terms 
of the fundamental principles of the EC Treaty. Most Member States report that their 
national  laws  on  public  procurement  (20  Member  States)  include  social  and 
environmental  clauses.  In  some  EU  countries  the  EC  Directives  have  triggered  a 
reform of the legislation. 

Several  Member  States  provided  neither  any  detail  of  the  specific  requirements 
included in their public procurement regulations nor information on the stages of the 
procurement  procedure  to  which  such  requirements  apply.  It  seems,  however,  that 
various  approaches  are  taken,  ranging  from  the  possibility  for  the  contracting 
authorities  to  set  social  and  environmental  requirements  for  the  performance  of  a 
contract (BE, DE, ES, PT, SI) to the possibility of dissolving a contract if the winner 
of the tender is found not to comply with the standards set (FI). 

In some Member States, specific rules apply to tender procedures managed by 
national  development  agencies,  making  compliance  with  of  social  and 
environmental conditions a mandatory obligation (AT, FR). Also, an environmental 
impact  assessment  is  often  required  as  part  of  the  documentation  for  development 
projects (ES, LT, and RO). 

4.1.4.  The way forward 

•  Promotion  of  sustainable  private  capital  flows  is  an  important  focus  for  the 
European  Union.  Interest  seems  to  be  increasing  for  enhancing  the  development 
dimension of private companies' activities. 

•  Continued  efforts  are  needed  to  promote  mobilisation  of  international  private 

resources for development, notably : 

– 

– 

develop specific financial tools in every EU Member States in order to 
make  it  easier  private  capital  flows  to  contribute  to  economic  growth 
and development; 

raise the awareness of both private companies and public opinion in the 
field  of  CSR,  and  ensure  that  all  stakeholders  engage  in  an  active 
dialogue; 

EN 

15 

   EN 

 
– 

sharpen the specific focus on the social and environmental dimension in 
the legislation on ODA public procurement. 

4.2. 

The role of remittances 

4.2.1.  Remittances: resilient to the global economic crisis? 

According  to  the  latest  estimations  of  the  World  Bank,  remittances  flows  to 
developing  countries  reached  $305  billion  in  2008  after  several  years  of  strong 
growth.  Whereas  the  impact  of  the  crisis  on  remittances  flows  cannot  yet  be  fully 
assessed remittances are expected to shrink in 2009, although they are considered 
being  more  resilient  than  other  private  or  official  financial  flows14.  There  is  a  risk 
that, if the global economic downturn turns out to be deeper or longer than currently 
expected  and  an  increasing  number  of  migrants  become  unemployed,  remittances 
might fall more substantially15. 

Remittances  flows  from  the  EU  to  developing  countries  have  followed  the  general 
trend of an increase of 60% since 2004, and they are estimated to have amounted to 
about  €25  billion  in  2008. 16.  More  than  40%  of  this  amount  has  been  flowing  to 
Africa, the main recipients of EU originated remittances flows are Morocco, Turkey, 
Nigeria and Ecuador. In the context of the financial crisis the EU's commitments on 
remittances are even more relevant.  

4.2.2.  Main  findings  of  the  survey:  Continuing  progress  on  implementing  the  EU 

commitments on remittances 

The  higher  awareness  in  recent  years  of  the  importance  of  remittances  and  various 
international  initiatives  are  gradually  becoming  visible  in  the  form  of  tangible 
measures. Some of the main initiatives were the guidelines for the compilation of 
data  on  remittances  issued  by  the  "Luxembourg  Group",  the  "General 
Principles for International Remittances Services" and the recent G8 initiative for 
a  "Global  Remittances  Working  Group"  coordinated  by  the  World  Bank. 
Regarding  the  three  main  areas  covered  by  of  EU  commitments  on  remittances 
(ensuring  more  reliable  data  on  remittances,  favouring  cheaper,  faster  and  more 
secure flows of remittances and, stimulating the development impact of remittances 
on  development)  Member  States  and  EC  contributions  to  the  survey  can  be 
summarised as follows: 

(1) 

Improving data on remittances 

•  In  addition  to  bank  transfers,  Member  States  are  increasingly  integrating 
remittances  transfers  by  money  transfers  operators  (MTOs)  in  their  balance  of 
payments statistics and progressively adopting the best practices recommended by 

14 

15 

16 

http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-
1110315015165/MD_Brief8.pdf;  RATHA  Dilip  et  al.,  “Outlook  for  remittance  flows  2008-2010”, 
WORLD BANK, 2008 
SEC(2009)445  of  08.04.2009  Millennium  Development  Goals  ("Millennium  Development  Goals  – 
impact of the financial crisis on developing countries" chapter 3.2.2 
The  estimation  is  based  on  the  estimation  of  remittances  flows  from  the  EU  in  2004  as  provided  by 
Fundacion de Estudios de Economia Aplicada, 2007, and the latest World Bank estimate on remittances 
flows in 2008. 

EN 

16 

   EN 

 
                                                 
the Luxemburg Group. Household surveys and targeted studies are the main tool 
used to obtain better estimates of informal flows. 

(2) 

Favouring cheaper, faster and more secure remittances flows 

•  Most EU Member States made progressed in recent years on reducing the cost and 
improving the safety of remittances. In particular the five Member States, which 
account for most remittances from the EU to developing countries, i.e. Germany, 
France, Spain, the United Kingdom and Italy, have been progressing on all these 
issues. 

•  Member States generally share a common analysis of the nature of the drivers of 
financial  exclusion  for  migrants.  The  lack  of  transparency  and  of  financial 
products suitable for migrants needs, the insufficient competition on a number of 
remittances corridors and the unattractive regulatory and business environment in 
countries of destination explain the high transaction costs. 

•  Substantial  progress  has  been  achieved  in  the  form  of  adoption  of  the  Payment 
Services Directive (PSD) in November 2007, which lays the legal foundation for 
an  EU-wide  single  market  for  payments.  "Payment  institutions",  i.e.  money 
transfer operators, are now recognised as a separate entity and subject to specific 
authorisation.  They  have  to  comply  with  appropriate  regulatory  requirements 
harmonised throughout the EU. The Directive requires payment services providers 
to  make  charges,  including  exchange  rates,  and  other  conditions  such  as  the 
transfer  time  and  the  charge  to  the  recipient  fully  transparent  to  customers. 
However, the PSD will apply only to payments made within the EU and will not 
therefore  cover  international  remittances.  Yet,  remittances  costs  could  be 
lowered  further  if  money  transfer  operators  with  global  reach  (such  as 
Western Union or Money Gram) were to extend most of the PSD requirements 
to extra-EU  transfers, something that they are envisaging in order to avoid the 
operational  problems  and  extra  costs  associated  with  running  different  systems 
and  practices  for  the  same  activity.  A  group  of  MS  is  already  planning  to  apply 
most  of  the  requirements  to  some  extra-EU  transfers.  The  Directive  will  be 
implemented throughout the EU by November 2009. 

•  Member  States  confirmed  that  they  are  applying  international  and  EU  rules  on 
anti-money  laundering  and  combating  the  financing  of  terrorism  ("AML-
CFT")  while  aiming  to  avoid  unnecessary  administrative  burdens  and  costs  on 
remittances. 

•  Several initiatives have been taken to make the private banking sector more aware 
of  the  specific  needs  of  migrants  to  whom  products  should  be  better  tailored.  A 
number of Member States have supported the construction of websites making it 
possible to compare the costs of the various operators and, in this way, fostering 
competition and reducing costs.17  

17 

Examples of such websites are: www.sendmoneyhome.org (UK), www.geldtransfair.de (Germany), 
www.envoidargent.fr  (France),  www.geldnaarhuis.nl  (Netherlands).  Italy  is  currently  preparing  a 
similar project. 

EN 

17 

   EN 

 
                                                 
(3) 

Enhancing the impact of remittances from the EU on development 

•  A  group  of  EU  Member  States  and  the  Commission  are  implementing 
programmes  in  partner  countries  with  the aim  of  developing  the  financial  sector 
(e.g.  microfinance,  technical  assistance  on  financial  sector  regulation  and 
supervision)  and  improving  financial  literacy  in  order  to  familiarise  households 
receiving remittances with banking services. If some of the remittances are saved, 
banks  can  build  up  their  role  as  intermediaries  turning  savings  into  productive 
investment with a positive impact on development. 

•  Other initiatives, for example in Belgium, are currently exploring development of 
remittances transfers via cell phones which would lower costs substantially and 
improve  accessibility,  given  the  proportion  of  cell  phone-owners  in  developing 
countries. Others, like France, favour the development of bank services especially 
for migrants (creation of specific agencies, insurance products, etc.). 

•  Several Member States and the Commission are supporting developing countries 
in establishing a policy framework more conducive to remittances. With the aid of 
its  development  cooperation  (whether  undertaken  bilaterally  or  by  the  European 
Community),  the  EU  is  supporting  creation  of  a  more  favourable  business 
environment in developing countries. A number of targeted initiatives have been 
set  up  in  that  framework,  such  as  EU  support  for  the  African  Remittances 
Institute under the leadership of the African Union and in collaboration with the 
World Bank (WB). The WB will provide, among other things, policy advice and 
training to African central banks and governments.  

4.2.3.  What needs to be done? 

A  significant  number  of  initiatives  are  being  undertaken  by  the  EU,  which  will 
continue  to  focus  on  implementing  its  current  commitments.  Specific  attention 
should also be paid to the following issues: 

•  supporting  new  technology-based  transfers  (via  cell  phones  or  Internet)  by 

targeted projects; 

•  extend  the  requirements  of  the  Payment  Service  Directive  to  extra-EU  transfers 

when the time comes for revision of the Directive in 2011; 

•  coordinate work better on specific remittances corridors where flows from several 

Member States are of particular importance. 

5. 

5.1. 

INCREASING  INTERNATIONAL  FINANCIAL  AND  TECHNICAL  COOPERATION  FOR 
DEVELOPMENT 

ODA levels are on the increase but by and large insufficient to reach agreed EU 
and international targets 

5.1.1.  Global ODA trends 

Global  ODA  levels  increased  steadily  between  2000  and  2005.  After  the 
disappointing drop in 2006 and 2007 as a consequence of the end of the debt relief 

EN 

18 

   EN 

 
spike,  a  positive  trend  was  restored  in  2008,  with  global  development  spending 
increasing  by  around  10%  to  an  historical  high  of  US$  almost  120  billion  (€84 
billion). This increase falls short, however, of creating the dynamics required for 
reaching the international ODA commitments, including those given by the G8 in 
Gleneagles.  Out  of  the  additional  US$50  billion  per  year  promised  to  be  available 
annually as from 2010, US$20 billion remain to be delivered. In light of the crisis the 
G20  Summit  of  London  reaffirmed  the  commitment  to  achieving  ODA  pledges, 
including  commitments  on  Aid  forTrade,  debt  relief  and 
the  Gleneagles 
commitments, especially to sub-Saharan Africa18. 

In 2008, as in previous years, most of the global ODA increase came from the EU, 
which provided 60% of the aid financing to the developing world coming from the 
DAC members. The same is forecast for the years ahead: the EU is set to continue 
shouldering  the  lion  share  of  the  global  scaling  up  of  aid,  i.e.  76%  of  the  forecast 
ODA  increases  by  2010  from  2008  levels.  By  that  year  EU  ODA  could  represent 
62% of the aid mobilised by all DAC donors. 

Figure:  Aid  flows  of  the  EU  and  non-European  G7  countries  2000  –  2010  (in  € 
million constant 2006) 

Global aid flows 2000 – 2010 (in € million current prices )

EU27
Canada
Japan
US

n
o

i
l
l
i

m

€ 

80000

70000

60000

50000

40000

30000

20000

10000

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009* 2010

Source: European Commission calculations on OECD/ DAC data

* Data linearly approximated based on OECD 2010 aid simulation

Source: European Commission calculations on OECD/ DAC data. 

In view of moving to a more balanced international burden sharing the ambitious 
plan  of  the  new  US  administration  to  double  the  nation's  ODA  from  $25  billion  to 
$50 billion is a  welcome contribution  to the global effort. The 2010 budget outline 
puts  the  US  on  the  path  to  doing  so.  The  Obama  campaign  pledge  to  deliver  this 
increase by 2012 is expected to be modulated to take into account the impact of the 
economic crisis on the US. According to the DAC simulation Japan's aid is also set 
to increase by around US$4 billion from 2008 levels, while Canada's aid will slightly 
increase in volume and as a share of GNI. 

18 

G20 London Summit Leaders' Statement of 02.04.2009, §25 

EN 

19 

   EN 

 
 
                                                 
So far, outside the EU only Norway has reached an ODA level of 0.7% of GNI or 
more. The EU continues to stand out as the only group of donors that has given a 
time-bound  commitment  on  the  0.7%  of  GNI  goal  for  ODA  (by  2015)  and  a 
collective intermediate target of 0.56% by 2010. EU disbursements in line with this 
pledge  could  add  up  to  €  69  billion  in  2010,  mobilising  an  additional  €  21  billion 
compared with 2006 levels (in current prices). A general understanding is emerging 
that ODA is a long-term investment in a more stable world and more decisive action 
is  needed  to  maintain  the  possibility  of  achieving  the  Gleneagles  and  other  agreed 
global aid targets. Switzerland and Australia have also set time-bound ODA targets, 
albeit  aiming  at  lower  levels.  Comparable  efforts  are  needed  on  the  part  of  other 
donors, particularly G8 partners, new donors and emerging economies. 

EN 

20 

   EN 

 
Figure: EU ODA as percentage share of DAC ODA and in € million 

EUROPEAN UNION AID
(in € million current prices and as a percent of DAC ODA)

EU 27 ODA in millions of €

EU 27 ODA as a percent of DAC ODA

s
e
c
i
r
p
t
n
e
r
r
u
c

n
o

i
l
l
i

m

€ 

n
i

70000

60000

50000

40000

30000

20000

10000

0

70%

60%

50%

40%

30%

20%

10%

0%

A
D
O

l
a
b
o

l

g
f
o
t
n
e
c
r
e
p

2001

2002

2003

2004

2005

2006

2007

2008

2010*

Source: EC calculations on OECD DAC data and EC Monterery Survey

*percentage based on linear assumption of global scaling up as EU MS commitment

Source European Commission simulation based on OECD/ DAC data and on  information provided 
by the EU Member States in the2009Monterrey questionnaire  

5.1.2.  EU ODA levels in 2008 

After the disappointing decline in 2007, EU ODA volumes have reached almost € 
50  billion,  an  all-time  high  in  volumes  (in  current  prices)  which  corresponds  to 
almost €100 spent  on  aid  per EU inhabita nt. This  brought the developing countries 
almost €4 billion of additional financi ng compared with 2007 and €1.8 billion more 
than  in  2006.  However,  the  upward  trend  –  corresponding  to  0.40%  of  the  EU's 
combined GNI - has not been pronounced enough to reach again 2006 aid levels 
relative  to  income  (0.42%  of  GNI).  Instead,  in  2008  EU  aid  basically  recovered 
part  of  the  ground  "lost"  in  2007  for  the  sustained  scaling-up  of  aid  required  to 
meet the EU targets for 2010. 

The picture among EU Member States countries varies. In most countries ODA 
increases  remain  volatile.  The  overall  rise  in  EU  aid  was  led  by  Spain,  which 
contributed almost € 0.9 billion to the coll ective increase in EU aid accounting for a 
quarter of it,  followed by Germany,  the UK, France, the Netherlands and Belgium. 
Despite  having  missed  its  self-set  national  ODA  target  of  0.5%  for  2008  and 
notwithstanding  the  economic  downturn,  in  early  2009  Spain  adopted  a  new  and 
ambitious  multi-annual  policy  framework,  which  confirms  the  decision  to  continue 
scaling  up  aid  at  a  more  ambitious  pace  than  the  EU  to  achieve  0.7%  of  GNI  by 
2012. This is a good example of how far-sighted understanding and political will can 
translate  into  practical  and  bold  decisions.  Significant  scaling-up  was  also  seen  on 
the  part  of  the  UK  after  the  2007  drop-off  due  to  completion  of  big  debt  relief 
operations – and accounted for more than 16% of the total increase in EU ODA. The 
"0.7% club" mobilised more than €500 m illion additional financing, led by Sweden 
which  increased  its  ODA  by  0.05%  of  GNI.  Similar  relative  efforts  were  made  by 
Portugal,  followed  closely  by  Belgium,  Cyprus,  Greece  and  Finland,  Ireland  and 

EN 

21 

   EN 

 
 
 
 
 
 
 
 
Slovenia. Several other Member States (DE, DK, FR, IT, LT, LU, LV, RO, SK) also 
either maintained or slightly increased their ODA levels. This modest effort added in 
case of Germany another €666 million and in case of France € 385 million. Greece 
reported a sizeable increase to 0.20% of GNI, albeit from very low levels. Italy, also 
reaching 0.20% of ODA/ GNI, has moved to the bottom of the 15 EU countries that 
are  DAC  members.  For  the  Netherlands  and  Poland,  although  absolute  ODA 
amounts 
to  GNI  ratio  actually  decreased.  Austria's 
disbursements decreased by €154 million, the biggest decline in aid in both absolute 
and  relative  terms in the EU,  leading the way on the downward path also taken by 
Bulgaria,  Estonia  and  Hungary.  Malta's  ODA  (2008:  0.11  %  of  GNI)  has  taken  a 
particularly worrisome downward trend since 2005 when it had been already above 
the 2010 target level (18% of GNI). 

the  ODA 

increased, 

Figure: Percentage share of Member States in EU ODA 2008 

Share of MS ODA in Total EU ODA (2008)
in € million and %

PT  425; 0,9%

EL  480; 1,0%

FI  790; 1,6%

LU  283; 0,6%

EU12  805; 1,6%

IE  918; 1,9%

AT  1165; 2,4%

BE  1651; 3,3%

DK  1941; 3,9%

IT  3081; 6,2%

DE  9644; 19,5%

SE  3286; 6,6%

UK  7919; 16%

ES; 4635; 9,4%

NL  4848; 9,8%

FR  7596; 15,4%

Source: DAC data and European Commission sources (Monterrey survey 2009)

Source: DAC data and European Commission sources (Monterrey2009 survey) 

The ratios of ODA to GNI might be subject to changes after the publication of this 
report. For the year 2008 only preliminary GNI figures were available from Eurostat 
and from EU Member States' replies provided to the OECD/ DAC in March 2009 in 
response to the DAC advance ODA questionnaire. 

EN 

22 

   EN 

 
 
Table: EU ODA levels 2005 – 2008 

2005

2006

2007

2008

ODA in € 
million 

ODA in % 
of GNI

ODA in € 
million 

ODA in % 
of GNI

ODA in € 
million 

ODA in % 
of GNI

ODA in € 
million 

ODA in % 
of GNI

Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
The Netherlands
Poland
Portugal
Romania
Slovak Republic
Slovenia
Spain
Sweden
UK
EU 15 TOTAL
EU 12 TOTAL
EU 27 TOTAL

1266
1580
2
12
109
1697
8
726
8067
8112
309
80
578
4096
8
12
206
8
4116
165
303
NA
45
29
2428
2706
8666
44857
479
45336

0,52
0,52
0,01
0,09
0,11
0,81
0,07
0,46
0,47
0,36
0,16
0,10
0,42
0,29
0,07
0,06
0,82
0,18
0,80
0,07
0,21
NA
0,12
0,10
0,27
0,92
0,47
0,43
0,08
0,41

1194
1576
1
21
128
1782
12
665
8446
8313
338
119
814
2901
10
18
232
7
4344
236
316
3
44
35
3038
3151
9931
47039
634
47673

0,47
0,49
0,00
0,15
0,12
0,80
0,09
0,39
0,46
0,35
0,16
0,14
0,53
0,20
0,06
0,08
0,90
0,15
0,78
0,09
0,21
0,00
0,10
0,11
0,31
0,99
0,51
0,43
0,09
0,41

1320
1425
16
18
131
1872
16
716
7212
8978
365
75
870
2897
12
30
274
8
4542
265
343
80
49
38
3755
3170
7191
44930
739
45668

0,50
0,43
0,06
0,12
0,11
0,81
0,12
0,39
0,38
0,37
0,16
0,08
0,55
0,19
0,06
0,11
0,91
0,15
0,81
0,10
0,22
0,07
0,09
0,11
0,37
0,93
0,36
0,39
0,09
0,37

1165
1651
13
27
146
1941
14
790
7596
9644
480
72
918
3081
14
41
283
6
4848
264
425
94
65
51
4635
3286
7919
48663
805
49468

0,42
0,47
0,04
0,17
0,11
0,82
0,09
0,43
0,39
0,38
0,20
0,07
0,58
0,20
0,06
0,13
0,92
0,11
0,80
0,08
0,27
0,07
0,10
0,14
0,43
0,98
0,43
0,42
0,09
0,40

Source: OECD/DAC, where available; Commission data based on Member States' information to the 
Commission or the DAC for 2008. Note: shaded cells contain information supplied by Member States, 
white cells DAC data. ODA is at current prices. Annex 2 describes the Commission's methodology for 
analysing Member States' indications on ODA provided in response to the Monterrey survey. 

5.1.3 

Short-term  and  medium-term  adaption  of  EU  assistance  to  developing  countries  in 
response to the financial and economic crisis 

The  Communication19  identifies  protection  of  the  most  vulnerable  and  sustaining 
economic  activity  and  employment  in  developing  countries  as  the  priority  areas 
requiring special support. This includes maintaining and building infrastructure, e.g. 
closing  the  infrastructure  financing  gaps  for  the  key  missing  links  in  Africa  (see 
annex 3) and regional infrastructure in the Mediterranean (see annex 4), revitalising 
agriculture, investing in green growth and stimulating trade and private investment. 

The  Commission  endeavoured  to  collect  information  from  the  Member  States  on 
their  planned  measures  to  respond  to  the  impact  of  the  crisis  in  developing 

19 

COM(2009) 160 of 08.04.2009 'Supporting developing countries in coping with the crisis' 

EN 

23 

   EN 

 
 
                                                 
countries. For that purpose a questionnaire that complements the Monterrey survey 
had been prepared,  looking at ODA and  non-ODA  instruments  that Member  States 
were willing to use to the benefit of developing countries. So far, 12 Member States 
have reacted to this questionnaire20. The other Member States are invited to provide a 
response  soon,  as  a  coordination  of  EU  actions  and  instruments  will  enhance  the 
efficiency and effectiveness of the forthcoming EU support to developing countries 
hit by the crisis. The return to the survey shows that Member States' reaction to the 
crisis  in  developing  countries  has  been  cautious,  in  line  with  the  uncertainty  with 
regard  to  the  actual  impacts  in  partner  countries.  There  is,  however,  a  wide 
agreement that development cooperation needs to respond to the new situation on the 
ground.  Reprogramming  to  target  the  key  sectors  of  infrastructure,  agriculture  and 
climate change is considered in this context, while some Member States cite already 
elevated support to these sectors. 

In the short term, given the budget constraints of Member States, frontloading ODA 
is  not  considered  feasible  by  most,  while  some  see  EC  and  EIB  instruments  as 
primary vehicles for additional flexibility to respond to the crisis. Member States 
considered rapidly increasing aid effectiveness a crucial part of increasing financing 
to the developing countries. 

Mobilising  other  sources  of  financing  -  besides  ODA  -  to  support  developing 
countries has been considered important and is in line with the EU commitments on 
Policy Coherence for Development. Member States stressed that such efforts need to 
be seen as additional to and separate from ODA. Finding it very difficult to quantify 
such measures in terms of development benefit, Member States were not in position 
to provide comprehensive data on such support. 

5.1.4.  Prospects of achieving the collective EU targets for 2010 

In 2005 the EU committed itself to additional aid targets, aiming to take individual 
ODA  to  0.51%  (EU-15)  or  0.17%  (EU-12)  by  2010,  while  those  countries  that 
already had high aid levels promised to maintain them. Collectively, the EU should 
achieve  0.56%  of  GNI  by  2010.  Buoyed  by  higher  national  pledges  from  some 
Member States, the projection was that the collective result could be in that order of 
magnitude. 

This projection was based on the policy decisions, which had been made by several 
EU countries at that time, and the following assumptions:  

•  Countries with ODA levels of 0.7% of GNI or above will maintain that level: SE, 
LU,  DK  and  NL  have  consistently  ensured  the  pledged  levels,  albeit  with  small 
variations  that  show  how  difficult  it  is  for  even  the  most  ambitious  EU  ODA 
providers to deliver on their aspirations. 

•  Countries  that  pledged  to  achieve  0.7%  before  2015,  following  more  ambitious 
national  deadlines,  will  increase  their  aid  volumes  linearly  to  meet  the  targets. 
Policy  and  budget  decisions  have,  unfortunately,  not  confirmed  this  hypothesis: 

20 

AT, BG, CY, DK, FI, HU, LV, MT, NL, SE, SI, UK, some of these Member States have though not 
provided full replies but rather general statements on priorities that need to be maintained despite the 
crisis situation. 

EN 

24 

   EN 

 
                                                 
France  and  Finland  have  lowered  their  sights  and  postponed  the  0.7%  deadline 
from 2012 to 2015. Others, while sticking to their target years, i.e. the UK (2013), 
Spain and Ireland (both 2012), have taken policy and budget decisions implying a 
back-loading of the scaling- up to the period after 2010. 

Despite  the  evident  challenges  to  achieving  0.56%  after  unfavourable  decisions  by 
major  stakeholders,  the  EU  has  repeatedly  confirmed  its  resolve  to  achieve  this 
objective.  Getting  there  will  require  efforts  from  every  Member  State  beyond 
the  existing  plans  and  minimum  baselines  to  which  EU  MS  have  individually 
committed themselves. 

EN 

25 

   EN 

 
Figure:  Progress  towards  and  forecast  for  the  collective  EU  target  of  0.56%  of 
GNI 

*Simulation based on European Commission calculations based on OECD/ DAC data 

Note: The red line indicates the EU collective target of 0.56% of GNI; the blue line marks the path 
that the EU needs to take to achieve that target by 2010. The broken line shows the estimated progress 
if Member States fulfil their individual ODA commitments, as known at present; the upper dotted line 
stands  for  the  Member  States'  current  forecasts  on  their  ODA  increases  until  2010;  and  the  lower 
dotted blue line estimates the direction that the EU collective aid levels as a share of the GNI will take 
if  Member  States,  which  have  not  provided  forward-  looking  data  for  2009  and/  or  2010,  maintain 
their current ODA level without any further increases. 

5.1.5 

Prospects for Member States' individual targets for 2010  

As  a  consequence  of  the  global  financial  and  economic  crisis,  public  finance  in 
Europe  and  donor  countries  is  becoming  increasingly  strained.  Tax  revenues  are 
lower  than  expected  prior  to  the  crisis;  higher  expenditure  is  needed  to  support  the 
financial  sector,  stabilise  the  economy  and  assist  the  increasing  number  of 
unemployed  people.  External  policies  risk  therefore  being  considered  of  a  lesser 
political  priority  and  therefore  suffer  from  reduced  budget  allocations.  Even  where 
the targeted ratios of ODA relative to GNI have been achieved, this can imply lower 
ODA in absolute terms compared to pre-crisis projections because of lower nominal 
economic  growth  and  depreciating  exchange  rates.  Strong  political  determination 
will  be  required  and  EU  Member  States  need  to  prioritise  budgetary 
expenditures  in  a  way  that  ODA  commitments  can  be  reached  and  are  not 
curtailed in a time when developing partners need this support most. 

In  their  reply  to  the  survey  a  majority  of  Member  States  expressed  their  resolve  to 
increase their ODA. Although some MS may see a cut of ODA spending in 2009 due 
to  crisis-related  budgetary  constraints,  the  overall  trend  is  in  the  right  direction. 
But the pace for moving to the individual baseline targets of 0.51% ODA/ GNI for 
the EU15 and of 0.17% ODA/ GNI for the EU12 is by and large insufficient. A fair 
burden-sharing between different EU countries risks becoming a contentious issue in 
light of the widening gap of the level of commitments and delivery: 

EN 

26 

   EN 

 
•  Meanwhile four EU Member States – Sweden, Luxembourg, the Netherlands and 
Denmark  are  spending  0.8%  of  their  GNI  or  more  on  development  and  are 
planning  either to maintain this level  or to  achieve the  1%  target  [LU,  SE].  The 
contribution  by  these  four  countries  to  improving  the  EU  average  ODA 
performance is substantial, although their relative economic weight within the EU 
is not. 

•  Some Member States (UK, ES, IE, and BE) had set themselves national deadlines 
more ambitious than the EU time limits for achieving the target of 0.7% but have 
decided  to  deviate  from  linear  increases  and  backload  the  new  development 
financing.  This  means  that  they  will  need  to  be  prepared  to  increase  their  ODA 
spending  drastically  during  this  year  2009  and  in  the  target  date,  which  creates 
political  uncertainty  and  might  lead  to  postponement.  However,  these  Member 
States  are  well  on  track  to  achieving  the  minimum  individual  targets.  The  same 
applies to Finland. 

•  While remaining far behind the agreed targets and not on track to meet the 2010 
target,  Greece  and  Portugal  have  taken  noteworthy  steps  to  increase  their  ODA 
and are moving in the right direction. 

•  After achieving 0.5% of GNI in 2007, Austria has slid backwards and the forecast 
continuation  of  this  downward  trend  is  not  in  line  with  the  EU-15  baseline 
objective. 

•  Despite  consistent  but  small  aid  increases  since  2002,  Germany,  the  EU's  single 
biggest  donor in 2008,  cannot be  considered on-track: aid levels to date are still 
lingering  below  the  EU  average;  the  country  has  not  yet  mobilised  resources 
commensurate with the amounts required for bridging the gap to 0.51%; nor have 
multi-annual ODA timetables been prepared. The same is true for France, which 
has  shown  high  volatility  in  its  past  efforts  and  is  also  still  far  from  the  2010 
baseline threshold. 

•  Italy  is  the  only  Member  State  apparently  abandoning  its  commitments  and 
planning significant cuts for 2009 and 2010, reducing its aid by €1 billion by 2010 
(corresponding to 0.11% of its GNI) and set to cut it to 0.09% by 2011. 

•  There  is  some  good  news  from  EU-12  Member  States:  Cyprus  has  already 
achieved the 0.17% target and Slovenia, Lithuania, Malta and Poland are planning 
to  attain  it  in  2010.  Four  other  Member  States  (the  Czech  Republic,  Estonia, 
Hungary  and  Latvia)  are  also  increasing  their  aid,  but  do  not  plan  to  meet  the 
target by 2010. Slovakia, Romania and Bulgaria seem to be even further off track. 
Their ODA volumes will remain below 0.10% of GNI, unless the current forecasts 
are revised upwards substantially. 

EN 

27 

   EN 

 
Table: EU ODA estimates for 2008-2013 (ODA in € million and % of GNI) 

2008
ODA in € 
million 

ODA in % 
of GNI

2009
ODA in € 
million 

ODA in % 
of GNI

2010
ODA in € 
million 

ODA in % 
of GNI

2011
ODA in € 
million 

ODA in % 
of GNI

2012
ODA in € 
million 

ODA in % 
of GNI

2013
ODA in € 
million 

ODA in % 
of GNI

Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
The Netherlands
Poland
Portugal
Romania
Slovak Republic
Slovenia
Spain
Sweden
UK
EU 15 TOTAL
EU 12 TOTAL
EU 27 TOTAL

1165
1651
13
27
146
1941
14
790
7596
9644
480
72
918
3081
14
41
283
6
4848
264
425
94
65
51
4635
3286
7919
48663
805
49468

0,42
0,47
0,04
0,17
0,11
0,82
0,09
0,43
0,39
0,38
0,20
0,07
0,58
0,20
0,06
0,13
0,92
0,11
0,80
0,08
0,27
0,07
0,10
0,14
0,43
0,98
0,43

0,42
0,09
0,40

986
2098
13
29
150
1973
12
916
9548
11371
635
59
796
2467
15
47
275
9
5245
445
479
169
47
55
5321
3157
7101
52368
1051
53419

0,35
0,60
0,04
0,17
0,11
0,82
0,08
0,48
0,49
0,45
0,26
0,06
0,54
0,16
0,08
0,15
0,92
0,15
0,88
0,14
0,29
0,13
0,07
0,15
0,49
1,06
0,48

0,47
0,11
0,44

1144
2496
66
32
141
1977
16
1004
10205
13098
883
139
911
1739
20
54
290
10
5405
567
557
244
49
67
6139
3036
8388
57272
1405
58676

0,40
0,70
0,17
0,18
0,10
0,80
0,10
0,51
0,51
0,51
0,35
0,14
0,61
0,11
0,10
0,17
0,93
0,17
0,89
0,17
0,34
0,17
0,07
0,17
0,56
1,00
0,56

0,50
0,15
0,48

1340
2596
89
35
167
2057
28
1111
11500
14712
1193
214
1026
1558
44
64
315
12
5653
669
657
333
56
81
7355
3135
9545
63753
1793
65546

0,46
0,70
0,21
0,18
0,11
0,80
0,17
0,54
0,56
0,56
0,45
0,21
0,66
0,09
0,21
0,19
0,94
0,20
0,89
0,19
0,39
0,21
0,07
0,19
0,64
1,00
0,61

0,54
0,18
0,51

1580
2701
113
40
279
2141
38
1153
12795
16326
1418
260
1141
4531
54
63
343
16
5634
739
770
423
63
99
8571
3252
10702
73058
2187
75244

0,52
0,70
0,25
0,20
0,17
0,80
0,22
0,54
0,60
0,60
0,51
0,25
0,70
0,26
0,25
0,18
0,95
0,25
0,86
0,20
0,44
0,25
0,07
0,22
0,70
1,00
0,66

0,60
0,20
0,57

1849
2808
136
45
391
2229
48
1333
14090
17941
1697
305
1197
7503
64
77
373
20
5834
964
870
513
71
119
9006
3369
11859
81957
2754
84710

0,58
0,70
0,28
0,22
0,23
0,80
0,26
0,60
0,64
0,64
0,58
0,28
0,70
0,42
0,28
0,20
0,96
0,30
0,85
0,25
0,47
0,28
0,08
0,24
0,70
1,00
0,70

0,65
0,24
0,61

Source:  OECD/DAC  for  2008,  where  available;  otherwise  Commission  data  based  on  Member  States'  information  to  the  Commission.  Note:  shaded  cells  contain  information 
supplied by  Member  States, white  cells  are  Commission data  or  simulations. ODA  is  at  current  prices.  Annex 2  describes  the  Commission's  methodology  for analysing  Member 
States' indications on ODA provided in response to the Monterrey survey. 

EN 

28 

EN 

 
  
 
Figure: ODA-indicator for EU15 

I

/

N
G
A
D
O
%

1,2

1,1

1

0,9

0,8

0,7

0,6

0,5

0,4

0,3

0,2

0,1

0

0.98

0.92

0.83

0.86

0.38

0.39

0.42

0.43

0.43

0.44

 0.58

0.46

0.27

0.20

0.20

s
t
e
g
r
a
t

i

A
D
O
g
n
h
c
a
e
r
s
d
r
a
w
o
T

l

y
a
t
I

e
c
e
e
r
G

2015 target of 0.7% ODA/GNI

2010 target of 0.51% ODA/GNI

ODA/GNI in 2000

l

i

K
U

n
a
p
S

e
c
n
a
r
F

a
i
r
t
s
u
A

a
g
u
t
r
o
P

y
n
a
m
r
e
G

s
d
n
a
l
r
e
h
t
e
N
         The position of the arrows represent the 2008 ODA/GNI  level for each country.   
The direction of the arrow indicates whether ODA went up or down from 2007 levels.  Arrows are coloured:
green             the MS is "on track" with a clear timetable to meet the 2010  target of 0.51% ODA/GNI, 
orange           the MS is likely "on track", plans to reach the 2010 target of 0.51% ODA/GNI, but does not have a  timetable, 
red                the MS is not "on track" and needs to substantially reinforce efforts to reach the target.  
       A diamond indicates that ODA levels stayed the same from 2007 to 2008.

k
r
a
m
n
e
D

g
r
u
o
b
m
e
x
u
L

m
u
g
e
B

d
n
a
n
F

d
n
a
e
r
I

i

l

i

l

l

n
e
d
e
w
S

EN 

29 

EN 

 
  
 
 
 
 
 
 
 
EN 

30 

EN 

 
  
Figure: ODA-indicator for EU12 

I

/

N
G
A
D
O
%

0,35

0,3

0,25

0,2

0,15

0,1

0,05

0

0.07

0.07

0.08 

0.09

0.1

0.06

0.04

0.11

0.11

0.12

0.17

0.14

s
t
e
g
r
a
t

i

A
D
O
g
n
h
c
a
e
r
s
d
r
a
w
o
T

Bulgaria

Latvia

Romania Hungary

Poland

Estonia

Slovakia

Czech
Republic

Malta

Lithuania Slovenia

Cyprus

2015 target of 0.33% ODA/GNI

2010 target of 0.17% ODA/GNI

ODA/GNI at time of EU accession

                    The position of the arrows represent the  2008 ODA/GNI  level for each country.   
The direction of the arrow indicates whether ODA went up or down from 2007 levels.  Arrows are coloured:
green            the MS is "on track" with a clear timetable to meet the 2010  target of 0.17% ODA/GNI, 
orange          the MS is likely "on track", plans to reach the 2010 target of 0.17% ODA/GNI but does not have a timetable 
red               the MS is not "on track" and needs to substantially reinforce efforts to reach the target.  
                   A diamond indicates ODA levels stayed the same from 2007 to 2008.

* will reach 0.17% ODA/GNI in 2011

EN 

31 

EN 

 
  
 
 
 
 
 
Further  work  needs  to  be  done  to  tackle  the  sensitive  issue  of  cooperation  in  the 
framework of peace and security related activities concerning developing countries. 
A  number  of  those  activities  are  not  covered  by  the  current  ODA-definition  of  the 
OECD/  DAC.  Discussion  in  the  OECD/  DAC  needs  to  continue  to  reflect  on  this 
situation that concerns, amongst others, also the Africa Peace Facility, funded by the 
EDF.  Another  area  concerns  migration,  where  the  survey  with  the  Member  States 
shows that more reflection is warranted to better articulate the links with ODA. 

5.1.6.  Little progress with multi-annual ODA timetables to enhance ODA predictability 

Progress remains slow towards establishing multi-year timetables showing how 
Member  States  intend  to  scale  up  their  aid  levels  towards  the  agreed  ODA  targets. 
The  decisions  by  the  UK  (in  2008)  and  Spain  (February  2009)  to  move  to  0.56% 
GNI  by  2010  prove  that  this  EU  target  can  facilitate  national  decision-making  on 
multi-annual ODA timetables in budget processes and in adopting government policy 
frameworks. Some MS have timetables, but these plans mention aid levels that will 
be  insufficient  by  a  long  way  to  meet  the  2010  EU  ODA  targets.  Nonetheless, 
Portugal's  adoption  of  a  multi-year  timetable  is  a  commendable  effort  to  catch-up 
from  its  current  low  aid  levels,  even  if  the  available  forecasts  do  not  yet  reveal  by 
when the country will achieve its 0.51% individual baseline target. 

Member States seem to take different approaches with regard to timetables: There is 
a more or less equal divide between those with timetables for a set period and those 
which prefer a rolling programme with annual updates. Most of the EU countries that 
have  not  been  able  to  make  any  forecast  on  their  future  ODA  spending  levels  cite 
legal restrictions related to their national budget cycle. Some of them have processes 
under way to address the legal and policy obstacles to multi- annual commitments. 
These  efforts  have  to  be  pursued  and  concluded  urgently,  especially  in  those 
countries that had referred to internal discussions on the issue in previous years. The 
lack of appropriate policy frameworks and/or budget forecast decisions worsens the 
back-loading  in  the  EU  scaling-up  process.  This  undermines  the  Union's  ability  to 
live up to its immediate ODA targets for 2010 in addition to the medium-term targets 
for 2015. 

5.1.7.  ODA for Africa 

Africa  is  the  region  furthest  off  track  from  meeting  the  Millennium  Development 
Goals and the EU is paying special attention to its development efforts. In 2005 EU 
Member  States  committed  themselves  to  increase  development  assistance  to  Sub-
Saharan  Africa  and  to  channel  at  least  50%  of  their  collective  aid  increase  to  the 
continent. 

The  debt  relief  spike  that  substantially  augmented  total  EU  flows  during  2005  and 
2006  also  affected  EU  ODA  to  Africa,  as  a  significant  share  of  debt  relief  was  for 
Nigeria. With the decline in debt forgiveness there was also a decline in the overall 
EU ODA to Africa in 2007, since the mobilisation of country programmable aid did 
not  fully  compensate  for  the  amounts  of  debt  relief  that  had  been  made  available 
before.  In  2008  EU  bilateral  aid  to  Africa  has  increased  to  €14.1  billion,
  an 
amount insufficient to match with the 2006 level. 

EN 

32 

   EN 

 
Figure:  EU  bilateral  ODA  to  Africa  (North  and  Sub-Saharan  Africa)  in  current 
prices 

EU15 + EC ODA to Africa in € million and as a %  of total ODA

ODA to Africa, Total

% of total EU 15 ODA to Africa

35%

30%

30%

25%

29%

14 119

10 243

13 625

16 683

11 187

18 000

16 000

14 000

12 000

10 000

8 000

6 000

4 000

2 000

n
o

i
l
l
i

m

€ 

2004

2005

2006

2007

2008

Source: OECD DAC

Source: OECD/ DAC 

Looking  at  EU  ODA  to  Sub-Africa  excluding  debt  relief,  there  is  a  clear  and 
persistent  upward  trend  in  aid  flows  in  absolute  amounts  since  2005.  Beteween 
2007  and  2008  this  aid  increased  by  more  than  a  third  showing  that  bilateral 
programmes are being refocused towards Sub-Sahara Africa. 

Figure: EU bilateral ODA increase to Sub-Sahara Africa without debt relief grants 

EU15 + EC bilateral ODA to Sub-Saharan Africa 
in € million and as a %  of total bilateral ODA, Excluding Debt Relief

12 000

10 000

8 000

6 000

4 000

2 000

n
o

i
l
l
i

m

€ 

38%

26%

30%

30%

6 047

6 297

7 060

7 917

40%

10 605

2004

2005

2006

2007

2008

Source: OECD DAC

ODA to Sub-Saharan Africa, Total

% of total EU 15 bilateral ODA to Africa

Source: OECD/ DAC 

The future aid increases to Africa remain hard to predict as the Member States gave 
no  indication  of  their  plans  to  sustain  this  trend  in  their  forecasts  provided  in 

40%

35%

30%

25%

20%

15%

10%

5%

0%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

EN 

33 

   EN 

 
 
 
 
 
 
response  to  the  Monterrey  survey.  While  a  mix  of  instruments  is  considered 
necessary,  most  Member  States  will  continue  to  use  bilateral  aid  as  the  preferred 
channel for ODA to Africa, either by means of project/ programme approaches or as 
budget  support  or  support  for  regional/continental  organisations.  Compared  with 
indications from Member States last year, budget support seems to be falling out of 
favour, as only five countries consider this their preferred modus operandi for scaling 
up  for  Africa  (down  from  ten).  In  particular  the  countries  that  have  become  EU 
members  since  2004  continue  to  provide  their  support  to  Africa  mainly  via 
the  European 
multilateral  channels, 
Commission. 

instruments  administered  by 

including 

5.1.8.  ODA for the least developed countries (LDCs) 

In  November  2008,  Member  States  promised,  as  part  of  the  EU's  overall  ODA 
commitments,  collectively  to  provide  0.15%  to  0.20  %  of  their  GNP  to  LDCs  by 
2010 while fully respecting the differentiated commitments set out in the "Brussels 
Programme  of  action  for  the  LDCs  for  the  decade  2001-2010.  This  report  will 
establish the baseline for future monitoring. 

The  share  of  EU  ODA  to  LDCs  has  been  increasing  constantly.  The  feasibility  of 
achieving this target depends on fulfilling the overall ODA commitments. Ten of the 
EU-15 MS have indicated that they are willing to provide at least 0.15% of their GNI 
to  LDCs  by  the  target  date.  As  some  of  them  do  not  plan  to  increase  their  overall 
ODA  levels,  this  may  entail  significant  re-prioritisation  of  their  current  aid 
programmes.  Of  the  EU-12,  only  Cyprus  and  Lithuania  are  prepared  to  reserve  a 
share of their ODA for LDCs. 

The  current  trend  and  preliminary  predictions  indicate  that  the  collective  ODA 
target of 0.15 to 0.20% of GNI to LDCs by 2010 remains in reach, provided MS 
refocus their spending plans accordingly. 

Figure: EU ODA to LDCs 

18 000

16 000

14 000

12 000

10 000

8 000

6 000

4 000

2 000

n
o

i
l
l
i

m

€ 

EU15 ODA to LDCs in € million and as a %  of GNI

0,12% 

 0,12% 

 0,08% 

 5 915 € 

13 204 € 

14 000 € 

0,15

17022 €

0,16

0,14

0,12

0,10

0,08

0,06

0,04

0,02

-

I

N
G
%

1996 - 1997

2006

2007

ODA to LDC

Per cent of donor's GNI

*Simulation based on the collective ODA target of 0.15% to LDCs by 2010

EN 

34 

   EN 

 
 
 
 
5.1.9.  Continued need to enhance ODA reporting capacity  

In  follow-up  to  the  Council  Conclusions  of  May  200721  the  Commission,  in  close 
cooperation  with  the  OECD/  DAC  and  Austria,  organised  seminars  on  ODA 
reporting standards for EU12 administrations22. Eight MS participated in the training 
that  aimed  at  facilitating  adherence  of  these  EU  countries  to  their  ODA  reporting 
obligations in follow-up to the commitments taken at EU level. The Commission will 
continue to work with the DAC secretariat on providing such support. As the EU12 
are not yet DAC-members they do not fully - or not at all - report to the organisation, 
although  all  of  them  are  covered  by  the  OECD/DAC  outreach  strategy  for  new 
donors.  A  hindrance  for  further  enhancing  the  statistical  reporting  (capacity, 
expertise) stems from the fact that some EU12 MS have not appointed a permanent 
ODA reporting officer or unit. 

5.1.10.  Outlook 

There  is  no  more  time  for  complacency.  The  EU  needs  to  maintain  its  leadership 
role for a global development partnership and must not put at risk its credibility as a 
reliable  and  predictable  donor.  Urgent  and  decisive  action  is  required  in  a  difficult 
economic context during 2009 and 2010:  

•  The  European  Council  of  March  2009  highlighted  the  need  to  honour  agreed 
commitments  to  increase  development  assistance.  This  requires  a  concerted 
action by all EU Member States to reach the collective target of 0.56% ODA 
GNI by 2010. 

•  Member  States  need  to  live  up  to  their  individual  commitments  while 
preserving  a  fair  burden-sharing  among  themselves  in  line  with  the  pledged 
2010 thresholds. 

•  In order to live up to agreed commitments regarding the establishment of rolling 
multi-annual  indicative  ODA  timetables23  Member  States  that  do  not  dispose  of 
such  national  timetables  need  to  include  multi-year  forward-plans  in  their 
Government work programmes and related budget decisions. As budget decisions 
for 2010 are being prepared now and 2015 is the next target date for ODA levels, 
such timetables should best become available by the end of 200924 and explain 
how  countries  will  go  towards  meeting  the  0.7%  (EU15)  and  0.33%  ODA/ 
GNI (EU12) target of 2015.  

•  In line with the Council Conclusions of May 2007 Member States should adhere 
to their ODA reporting obligations. A useful step in EU12 countries that have 
not yet done so would be to assign permanent reporting officers for ODA statistics 
and to ensure sustainability in their reporting system. 

21 
22 
23 
24 

"Keeping Europe's promises on Financing for Development" of May 15, 2007 
In 2008 and 2009 as part of the 3rd capacity building programme in development policy for the EU12 
Council Conclusions (GAERC) of 11.11.2008 and of 27 May 2008 
But not later than by the end of 2010 to remain in keeping with the Council Conclusions of 2008, see 
previous footnote 

EN 

35 

   EN 

 
                                                 
5.2. 

Bridging the finance gap: innovative sources of financing 

5.2.1. 

Innovative finance: a timely matter 

As seen in the previous chapter, the current crises are making it ever more difficult to 
meet  Europe's  ambitious  commitment  to  scale  up  aid  to  developing  countries.  In 
assessing  whether  the  EU  is  able  to  develop  and  adopt  innovative  finance 
mechanisms  (IFM)  and  thereby  meet  its  ODA  commitments  or  mobilise  further 
development funding, the Monterrey survey sounded out Member States' interest in 
exploring  further  possibilities  or  making  firm  commitments 
innovative 
mechanisms.  Most  of  the  existing  initiatives  concerning  innovative  sources  of 
funding and financing mechanisms were launched with a view to providing a stable, 
predictable and, in the case of the International Financing Facility (IFF), frontloaded 
funding to achieve the Millennium Development Goals and other development goals. 

to 

The  political  message  concerning  innovative  financing  mechanisms  at  Member 
States level can be summed in the three following points: 

•  Member  States  agree  to  some  extent  on  improving  resource  mobilisation  by 
making funds more predictable, however they remain divided over the importance 
of the issue and feasibility of schemes. 

•  The  debate  within  many  Member  States  '  administration  on  the  scope  for 
is 
additional  official  financial  commitments  for  development  assistance 
continuing.  

•  There  is  traditional  reluctance  in  parts  of  the  national  administrations  of  many 
Member  States  to  consider  international  taxation  schemes;  this  apprehension  is 
exacerbated by the global financial crisis. 

5.2.2.  A small number of EU Member States are promoting innovative sources of finance 

Ten  EU  countries  mobilised  funds  via  innovative  mechanisms  in  2008,  while 
Hungary and the Czech Republic are conducting informal discussions at the national 
level. France, Germany, the Netherlands, Sweden, Luxembourg, Italy and the UK are 
becoming  more  engaged  in  the  field  of  innovative  finance,  but  the  majority  of  the 
Member  States  are  not  participating  in  any  of  the  existing  innovative  tools  and 
instruments. The major contributions to existing mechanisms have been: 

•  Air  ticket  contributions:  France  and  the  UK  have  an  air  ticket  tax,  but,  unlike 
France,  the  UK  does  not  earmark  any  of  the  proceeds  for  development  finance. 
Luxembourg  is  the  only  country  to  collect  voluntary  contributions  from  air 
passengers  (since  April  2008).  Cyprus  has  also  introduced  an  air  ticket  tax,  but 
has yet to sort out legal constraints relating to the contract with the private airport 
operator. In 2008, Cyprus (€ 400000) and France (€164 million) paid the proceeds 
from their air ticket tax to the International Drug Purchase Facility (UNITAID) 
and the UK contributed around €19 million in 
the form of regular ODA. What is 
more, the Portuguese government is developing an internal consultation process, 
involving different ministries and the parliament, in order to assess the technical 
and financial implications of potential support for UNITAID. 

EN 

36 

   EN 

 
•  International  Financing  Facility 

for 

Immunisation 

(IFFIm):  The 

disbursements  of  the  UK  (€12.6millio n),  France  (€19.2  million),  Italy  (€5.76 
million),  Spain  (€9.1  million)  and  Swed en  (€1.9  million)  under  their  existing 
long-term commitments backed the IFFIm, following the first bond issue of US$ 1 
billion in 2006. A second issued in March 2008 raised a further US$223 million. 

•  In  February  2007,  the  UK  and  Italy  (together  with  Canada,  Norway,  Russia  and 
the  Bill  &  Melinda  Gates  Foundation)  launched  the  first  Advance  Market 
Commitment (AMC) for the pneumococcal vaccines. In 2008 Italy contributed 
€36.04 million and Spain has expressed interest in a further  AMC for malaria. 

•  Debt2Health: Germany disbursed €50 million in  debt relief for Indonesia and €40 

million  for  Pakistan  via  its  new  Debt2Health  initiative.  Debt2Health  envisions 
freeing  up  domestic  resources  with  the  aid  of  debt  relief  that  can  be  invested  in 
urgent  public  health  needs.  Creditor  countries  forgo  a  portion  of  their  claims  on 
condition that the beneficiary country invests an agreed amount in health under a -
programme  approved  by  the  Global  Fund.  This  counterpart  payment  is  made  to 
the Global Fund. 

•  Financial  and  currency  transaction  levy:  Belgium  and  France  had  earlier 
introduced legislation to tax such transactions; effective implementation is linked 
to the existence of a similar levy in the other EU Member States. Austria and Italy 
have expressed interest in introducing a tax on financial or currency transactions 
at EU level. 

•  Climate change is giving a new boost to work on innovative financing and seems 
to be inspiring some Member States that have so far been reluctant to take a fresh 
look on innovative finance: Germany (€100 million in 2008 and €225 million in 
2009) and Denmark (€ 13.4 million in 2008 with the same amount earmarked for 
2009)  have  both  decided  to  allocate  an  increasing  share  of  their  national  carbon 
trade revenues to climate change mitigation and adaptation projects, focussing on 
developing countries. 

Member States agree to some extent on improving resource mobilisation by making 
funds more predictable, increasing the volume of traditional development assistance 
and  working  better  with  the  private  sector  and  the  markets.  The  UK  in  particular 
emphasises the importance of harnessing the private sector by improving regulatory 
frameworks to provide greater incentives for private investment25. 

Finally,  Member  States  are  equally  split  between  those  that  would  like  to  explore 
further  the  potential  of  certain  other  mechanisms  (e.g.  a  financial  transaction  tax, 
global lottery) and those that do not consider them realistic options. 

25 

The UK is currently using ODA to leverage additional private sector investment via the facilities of the 
Private Infrastructure Development Group and the Challenge Fund approach (which provide matching 
grants  of  up  to  49%  of  the  costs  of  commercial  proposals  selected  on  a  competitive  basis  by  an 
independent expert panel). 

EN 

37 

   EN 

 
                                                 
5.2.3.  Actions  required  for  implementing  new  mechanisms  and  partnerships  allowing  an 

increase in financing for development26  

Consensus runs deep that the fight against hunger and poverty and for promotion of 
development  will  not  be  won  unless  the  gap  between  political  commitment  and 
development  financing  is  bridged.  At  the  time  of  writing,  global  ODA  flows  in 
response to traditional financial commitments made by the donor community remain 
uneven and slow. As a result, boosting aid to countries that are already aid-dependent 
will  require  a  degree  of  budgetary  predictability  that  only  new  mechanisms  could 
provide.  Innovative  finance  mechanisms  can  therefore  make  a  crucial  difference  in 
enhancing ODA resources. 

With a view to leveraging finance with the aid of innovative mechanisms, this report 
calls for an urgent assessment of the different ideas and proposals. The ultimate 
financial  efficiency  of  development  financing  and  the  effective  use  of  funds  are  key 
criteria  for  the  assessment.  The  Commission  encourages  efforts  to  raise  additional 
development  finance  for  the  developing  world  as  long  as  these  mechanisms  do  not 
undermine  the  efforts  to  strengthen  national  ownership,  alignment  with  country 
systems  and  donor  coordination  and  harmonisation.  It  is  therefore  important  to 
diagnose the potential problems carefully before jumping to any particular innovative 
finance solution. This entails considering the: 

•  cost benefit analysis at the outset; 

•  common set of criteria for judging the range of solutions to problems identified; 

•  political championing and multi-donor coordination; 

•  evaluations of pilot initiatives; 

•  focus  on  effective  use  of  aid  and  on  generating  additional  finance,  paying 
particular  attention  to  the  existing  aid  architecture.  New  initiatives  should  avoid 
any further proliferation of actors and funds. 

On  this  basis  innovative  sources  of  financing  should  be  further  developed  and 
implemented. 

•  Greater focus should be placed on using innovative finance to generate additional 
private  sector  investment,  particularly  in  the  current  economic  climate,  e.g. 
exploring how public finance, via risk-related instruments, could create incentives 
for  private  sector  investment.  The  EU  encourages  development  of  tools  to 
mobilise private funds for development (e.g. risk-sharing initiatives). 

•  Attention needs to be paid to donors’ commitments to ensure that predictability of 
revenue  increase  is  turned  into  predictable  delivery  of  resources  in  developing 
countries. 

26 

In  follow  up  to  the  Council  Conclusions  GAERC  11.11.2008  'Guidelines  for  EU  participation  in  the 
International Conference on Financing for Development (Doha) 

EN 

38 

   EN 

 
                                                 
•  Member  States  could  support  successful  ongoing  initiatives,  such  as  the 
auctioning  of  emission  certificates  under  the  European  Emissions  Trading 
mechanism  as  a  growing  source  of  development  finance,  to  adapt  to  climate 
change in developing countries. 

6. 

EXTERNAL  DEBT:  CHALLENGES  TO  DEBT  SUSTAINABILITY  IN  DEVELOPING 
COUNTRIES 

Developing  countries  that  have  received  multilateral  and  bilateral  debt  relief  in  the 
recent past have been able to invest significantly more in development. In the current 
global  economic  downturn  this  may  also  enable  them  to  develop  their  own  fiscal 
stimulus response. Nevertheless, since 2007, many post-HIPC countries have been 
particularly  exposed  to  a  succession  of  shocks  (e.g.  high  and  volatile  food  and 
energy  prices)  that  have  led  them  into  new  borrowing.  Debt  sustainability  is 
therefore  often  part  of  the  vulnerability  assessments  that  are  being  carried  out  to 
gauge the impact of the multiple crises on developing countries. In order to alleviate 
the impact of the new financial crisis on progress towards the MDGs the EU needs to 
continue  its  full  support  for  the  HIPC/MDRI  initiatives.  Against  this  background 
encouraging progress has been made in this area with almost all the Members States 
indicating that they had delivered, timely, on their commitments to those initiatives. 
Despite  the  risk  of  more  restricted  access  to  new  loans  and  the  higher  costs  of 
borrowing  many  developing  countries  will  be forced  to  resort  to  new  borrowing  to 
support continued investment in human and physical capital. These new loans need 
to be carefully managed, especially since a number of post-completion-point HIPCs 
were  already  assessed  as  being  at  high  risk  of  debt  distress  prior  to  the  economic 
downturn. It is therefore, reassuring that the majority of Member States reported that 
they were taking action to promote debt sustainability, e.g. via the Debt Management 
Facility  for  Low  Income  Countries  managed  by  the  World  Bank.  Replies  from 
Member  States  also  suggest  that  existing  debt  management  and  sustainability 
mechanisms  should  be  further  enhanced,  their  membership  broadened  and  capacity 
in developing countries improved. 

6.1. 

The implementation of the HIPC initiative and preserving debt sustainability  

Continued  participation  by  creditors  and  donors  in  existing  debt  relief 
initiatives,  in  particular  the  Heavily  Indebted  Poor  Countries  (HIPC)  and 
Multilateral  Debt  Relief  Initiatives  (MDRI),  is  central  to  debt  sustainability.  The 
statements  by  Member  States  that  they  have  delivered,  without  delays,  on  their 
commitments  to  the  HIPC/  MDRI  initiatives,  are  consistent  with  the  WB/IMF 
reporting on the subject. This marks an improvement on previous years. In addition, 
the European Investment Bank has decided that its own resources assigned for HIPC 
debt relief could be used to finance clearance of the arrears of eligible HIPCs. 

Maintaining  long-term  debt  sustainability  in  post-HIPC/MDRI  low-income 
countries will be a central challenge in the future. The most commonly cited kind of 
action taken by the EU Member States to support debt sustainability is the decision 
to apply the OECD Export Credit Group guidelines on debt sustainability and a 
commitment to use the Debt Sustainability Framework for informed decisions on 
lending. Several EU countries gave details of direct technical assistance to strengthen 
public debt management, which they provide via multilateral initiatives, such as the 

EN 

39 

   EN 

 
World Bank's debt management facility, or bilaterally in LDCs. In their response to 
the annual questionnaire some Member States also referred to a meeting, hosted by 
the Paris Club in 2008, at which the Debt Sustainability Framework was explained, 
promoted and discussed with commercial creditors. The majority of Member States 
would appreciate greater  guidance  on  how to implement the commitments given in 
the May 2008 Council Conclusions which were further developed in the November 
2008  Council  Conclusions  on  EU  participation  in  the  International  Conference  on 
Financing for Development in Doha. Although only a minority of Member States so 
far  acknowledges  a  need  for  a  sovereign  debt  restructuring  mechanism  to  deal 
with  future  cases  of  debt  distress  in  developing  countries,  others  are  ready  to 
enhance  existing  initiatives.  The  G20  at  their  London  Summit  underscored  the 
importance  to  review  the  flexibility  of  the  Debt  Sustainability  Framework  and 
called  on  the  IMF  and  World  Bank  to  report  to  the  IMFC  and  Development 
Committee at the Annual Meetings27. 

6.2. 

Next steps  

In  the  light  of  the  findings  and  challenges  described  above,  and  reflecting 
conclusions reached by the EU for and discussions at Doha, the following measures 
should be taken: 

•  continued  full  and  timely  support  for  the  implementation  of  the  HIPC  initiative, 

ensuring that eligible countries receive pledged debt relief. 

•  call  on  commercial  and  non-Paris  Club  official  creditors  to  step  up  their 
contribution to implement the HIPC initiative and to grant comparable treatment 
to non-HIPC countries that have benefited from the Evian approach; 

•  as reflected in the November 2008 Council Conclusions on EU participation in the 
Doha Conference on Financing for Development, the EU supports discussions on 
enhanced sovereign debt restructuring mechanisms based on existing frameworks 
and  principles,  including  the  Paris  Club.  There  is  a  need  to  seek  broad 
participation  by  creditors  and  debtors  and  fairer  burden-sharing  across  creditors 
with a central role for the Bretton Woods Institutions (BWI) in the debate. The EU 
also  supports  risk  management  initiatives  linked  to  the  volatile  trends  in 
commodity  prices  in  developing  countries  to  reduce  the  impact  of  these 
exogenous shocks; 

•  it  is  important  to  help  restore  and  preserve  debt  sustainability  in  low-income 
countries.  In  follow-up  to  its  position  defined  in  the  Council  Conclusions  of 
November  2008  the  EU  should  invite  all  creditors  and  borrowers  to  improve 
transparency on loans and debt-stocks and to apply international guidelines such 
as  the  Debt  Sustainability  Framework  of  the  BWI  and  the  official  export  credit 
guidelines agreed by the OECD Export Credit Group. The EU has committed to 
not sell claims on HIPCs to creditors unwilling to provide debt relief and calls on 
all  countries  to  do  likewise  and  deter  aggressive  litigation  by  distressed-debt 
funds. 

27 

G20 London Summit Leaders' Statement of 02.04.2009, §25 

EN 

40 

   EN 

 
                                                 
•  Consideration  should  be  given  to  making  full  use  of  the  Debt  Sustainability 
Framework's  existing  flexibility  to  reflect  the  diversity  of  situations  across  low-
income countries; 

•  Further  increased  technical  assistance  is  necessary  to  strengthen  the  debt 
management capacity of debtor nations in the form of either multilateral initiatives 
or bilateral support. This capacity supports effective debt negotiations with non-
Paris  Club  official  bilateral  creditors  and  commercial  creditors;  and  enhances 
democratic oversight of new debt and use of resources freed with the aid of debt 
relief; 

•  the  European  Commission  is  willing  to  assist  Member  States  on  how  to 
implement  the  commitments  agreed  in  the  28  May  and  11  November  2008 
General Affairs and External Relations Council Conclusions on debt. 

7. 

SYSTEMIC  ISSUES:  WORKING  TOGETHER  FOR  INTERNATIONAL  GOVERNANCE  AND 
STABILITY 

in 

the 

International financial stability is a global public good. The global financial crisis has 
exposed  weaknesses 
system. 
Improvements  in  the  effectiveness,  coherence  and  complementarity  of  the  global 
institutions  are  necessary.  Furthermore,  the  Bretton  Woods  Institutions  need  to 
strengthen  their  analysis,  prevention  and  support  methods  for  developing  countries 
affected  by  international  financial  crises,  while  involving  regional  economic  and 
financial institutions more closely. 

international  economic  governance 

This report welcomes the current international debate to review the international 
financial and monetary architecture and global economic governance, in order to 
ensure  a  more  effective  and  coordinated  management  of  global  issues  such  as 
financial  stability,  food  and  energy  security,  climate  change  or  the  fight  against 
major  pandemics.  This  debate  should  take  into  account  the  ongoing  initiatives  to 
address the financial crisis at European and international level and should involve the 
World  Bank,  the  IMF,  the  United  Nations,  the  WTO  and.  relevant  regional 
institutions.  The  EU  should  make  sure  that  the  interests  and  needs  of  developing 
countries are duly taken into account in the reform debate and decisions. 

The  reform  package  adopted  by  the  International  Monetary  Fund,  which 
improved the alignment of members' quotas with their relative positions in the world 
economy and which helped to strengthen the voice and representation of developing 
countries is a welcome step. All IMF members should urgently ratify this reform 
of quota and voice, as agreed in April 2008.The call of the G20 in that direction 
and to complete the next review of quotas by January 2011 is welcome28  

The Commission welcomes the adoption by the Development Committee of a reform 
package including an additional seat for sub-Saharan Africa on the Bank’s board 
and  the  increase  in  developing  and  transition  countries'  voting  shares  in  the  IBRD 
and IDA, with special emphasis on smaller members as an important first step in the 

28 

G20 London Summit Leaders' Statement of 02.04.2009, §20 

EN 

41 

   EN 

 
                                                 
comprehensive  reform  of  the  World  Bank  governance  and  encourages  further 
realignment  of  shareholdings  in  the  Bank,  considering  the  evolving  weight  of  all 
members in the world economy and other Bank-specific criteria consistent with the 
World Bank Group's development mandate. Quick implementation of the first phase 
of  this  governance  reform  of  the  World  Bank,  as  agreed  by  the  Development 
Committee  in  2008,  is  called  for.  This  will  lay  the  appropriate  basis  for  further 
discussion, to make governance more effective. 

Furthermore,  this  report  supports  an  open,  transparent  merit-based  process  for 
selection  of  the  IMF  Managing  Director  and  the  WB  President  and  the 
simultaneous opening of these positions to applications from all board members and 
embraces the proposal of the G20 London Summit in this regard29. 

In  order  to  improve  efficiency,  an  increase  in  resources  and  improvement  of  the 
instruments of the IFIs is needed. The Commission supports full ratification by IMF 
Member  States  of  the  Fourth  Amendment  that  provides  a  mandate  for  doubling 
Special  Drawing  Rights.  In  the  case  of  the  World  Bank,  the  Commission  favours 
frontloading to attenuate the effects of the crisis on IDA countries. 

Moreover,  the  coherence  of  policies  and  action  between  the  IFIs  and  the  United 
Nations  need  to  be  strengthened.  The  UN  plays  a  central  role  in  the  multilateral 
system  due  to  its  universality  and  broad  mandate.  The  UN  is  the  only  body  where 
consensus  can  be  built  between  all  States  and  regions,  including  those  currently 
under-represented in or missing from economic and financial governance structures. 
The contribution by the UN to the work of the IFIs should be stepped up and made 
more  systematic,  including  by  enhancing  the  UN's  role  in  the  IFI's  governance 
bodies, safeguarding and consolidating the IFI's role in the relevant UN governance 
and  management  bodies  and  other  UN  fora  and  regularising  executive  contacts 
between the organisations. Further arrangements should also be considered in order 
to enhance the debate on global economic issues in the Economic and Social Affairs 
Council (ECOSOC). 

8. 

8.1. 

COPENHAGEN AND BEYOND: THE CHALLENGE TO MOBILISE FUNDING FOR CLIMATE 
CHANGE RELATED EFFORTS OF DEVELOPING COUNTRIES  

Financing related to climate change and other environmental challenges in the 
wake of the crisis 

Climate change is happening and developing countries are the worst affected because 
of their heavy dependence on weather conditions and their vulnerability to climate-
related disasters. The poorest developing countries that are least to blame for climate 
change are hit earliest and hardest. Tackling climate change is necessary in order to 
achieve  environmental  sustainability,  which  is  also  one  of  the  MDGs.  Moreover, 
there is a risk that climate change could reverse progress towards other MDGs such 
as food security and health for all. 

Climate change can also result in important forced displacements of populations. The 
rise of those internal and external migratory flows could lead to 200 million of forced 

29 

G20 London Summit Leaders' Statement of 02.04.2009, §20 

EN 

42 

   EN 

 
                                                 
migrants by 2050, involving heavy economic and social costs for the most vulnerable 
countries. 

The  financial,  economic  and  environmental  crisis  is  worsening  the  poverty  in 
developing countries, but also offers an opportunity for a strong policy response for 
"green growth" and opens up new prospects for sustainable development. 

At  the  same  time  there  is  a  pressing  need  to  reach  agreement  in  Copenhagen  in 
December 2009 on a system to tackle climate change that responds to the challenges. 
Creating an adequate global financial architecture is a key component of any system. 

The  estimated  costs  for  both  mitigation  and  adaptation  are  high,  but  manageable, 
provided timely mitigation efforts are taken so that the temperature rise can be kept 
below 2°C. The European Council 30 has reconfirmed the resolve of the EU to play a 
leading role to contribute to this goal and to reduce by 30% its emissions provided 
that  other  developed  countries  commit  themselves  to  comparable  greenhouse  gas 
reduction  targets  and  that  advanced  developing  countries  adequately  contribute 
according  to  their  responsibilities  and  respective  capabilities.  This  is  in  line  with 
latest  research,  which  indicates  that  keeping  the  2°C  target  within  reach  will 
require also developing countries as a group, in particular the most advanced, 
to  reduce  their  predicted  emission  growth  rate.  In  accordance  with  this  insight 
developing  countries  should  commit  themselves  to  a  low-carbon  development 
strategy, alongside the advanced economies. Implementation of such a strategy in the 
poorest  developing  countries,  which  could  encourage,  for  example,  renewable 
energy, should be supported technically and  financially. The European  Council  has 
underscored  that  the  EU  will  take  on  its  fair  share  of  financing  such  actions  in 
developing countries. It is important to rapidly harness mitigation measures that 
create  a  net  economic  benefit  ("picking  the  low  hanging  fruit").  Such  a  focus 
should be part of the response to the current crisis. 

Achieving the MDGs will require substantial investment to adapt to climate change. 
For  the  LDCs  the  United  Nations  Framework  Convention  on  Climate  Change 
(UNFCCC) established a fund to prepare National Adaptation Programmes of Action 
(NAPAs) that describe the priority adaptation activities to be funded. In the context 
of  the  EU  Global  Climate  Change  Alliance  (GCCA)  support  to  non-LDCs  for 
implementing  climate  related  policies  via  (sector)  budget  support  has  been 
mentioned  as  an  option.  These  activities  generally  fall  within  categories  that  are 
receiving  ODA  funding:  e.g.  irrigation  and  water  management,  flood  protection, 
developing  drought-resistant  crops  and  reforestation.  The  UNFCCC  Secretariat 
estimates  that  adaptation  costs  in  all  developing  countries  could  range  from  €23 
billion  to  €54  billion  per  year  in  2030.  Further  study  of  the  economics  of  climate 
adaptation is required, but the needs are large in comparison with the present size of 
ODA. Future climate aid will compete with other internationally agreed development 
objectives. 

Covering the cost of coping with climate change (mitigation and adaptation actions), 
especially  in  the  most  vulnerable  developing  countries,  will  require  significant 
domestic and external sources of finance, both private and public. Financing related 

30 

Conclusions of 19-20 March 2009 

EN 

43 

   EN 

 
                                                 
to climate change should be increasingly mobilised by industrial countries to support 
those countries, which have contributed very little to climate change, but will be the 
first and hardest hit, so that they can cope with climate change, especially LDCs and 
Small Island Developing States (SIDS). The following main sources can be used: 

•  increasing ODA budgets (but not at the expense of budgets for other MDGs); 

•  increasing  private-sector  flows  such  as  via  a  (reformed)  Clean  Development 
Mechanism;  legal  frameworks  and  public  funds  are  needed  to  leverage  these 
flows; 

•  innovative  sources  of  funding  that  are  linked  to  the  carbon  market,  e.g.  using  a 
share  of  the  revenue  from  auctioning  emission  rights,  such  as  via  the  proposed 
Global Climate Financing Mechanism or a levy on international air transport. 

The  European  Council  has  also  called  to  explore  more  closely  international 
financing  mechanisms.  Public  financial  contributions  at  the  international  level 
should be comparable and be based on the polluter-pays principle and each country’s 
economic  capacity.  As  regards  implementation  of  climate  support,  the  Member 
States  and  the  Commission  generally  favour  using  multiple  channels  such  as: 
bilateral  programmes,  EU  programmes  or  multilateral  programmes  managed  by  the 
World Bank or by the UN system. So far, the Member States are implementing very 
few  innovative  funding  mechanisms.  A  few  Member  States  are  already  using 
revenue  from  emission  trading.  This  is  likely  to  grow  as  auctioning  of  emission 
rights  becomes  generalised  in  the  future.  Some  Member  States  have  indicated  that 
they  are  willing  to  use  part  of  the  revenues  for  climate  finance  in  developing 
countries  (including  for  adaptation,  reducing  emissions  from  deforestation  and 
degradation (REDD), contributions to the Global Energy Efficiency and Renewable 
Energy  Fund  and  technology  transfer.  Legal  complications,  related  inter  alia,  to 
budgetary  treatment  are  sometimes  mentioned  as  a  limitation  for  using  innovative 
funding.  Nevertheless,  there  is  an  openness  to  tap  the  potential  for  innovative 
funding. Therefore further analysis and exchanges of experience are desirable. 

The  EU  has  welcomed  the  mobilization  of  IFIs  and  bilateral  players  in  the  area  of 
climate change, such as the establishment of the Climate Investment Funds (CIFs) by 
the World Bank. These funds are designed to fill the financing gap for urgent action 
until a new architecture for financing related to climate change under the post-2012 
arrangements  becomes  effective;  they  need  to  be  fully  co-ordinated  with  existing 
multilateral  and  bilateral  efforts,  particularly  in  the  context  of  the  Global 
Environment  Facility  (GEF),  the  Adaptation  Fund  set  up  under  the  UNFCCC  and 
European  initiatives  such  as  the  Global  Climate  Change  Alliance  (GCCA)  and  the 
Global Energy Efficiency and Renewable Energy Fund  (GEEREF). Their objective 
is  to  support  credible  national  mitigation  and  adaptation  plans  that  include  low-
carbon  objectives  and  could  teach  helpful  lessons  in  the  post-2012  financing 
arrangements related to climate change. 

The  sources  of  funding  for  the  adaptation  and  mitigation  needs  of  developing 
countries  are  likely  to  be  multiple.  There  is  scope  and  a  need  for  multilateral  and 
bilateral  initiatives,  and  coordination  and  cooperation  will  have  to  be  improved.  In 
this  respect,  the  situation  for  climate  finance  is  not  fundamentally  different  from 
other areas of development finance, such as health or infrastructure.  

EN 

44 

   EN 

 
Additional  resources  made  available  to  cope  with  climate  change  should  be 
mobilised in line with the established principles of aid effectiveness. Climate finance 
and other development finance should be fully integrated into national development 
plans and strategies, including poverty reduction strategies where applicable. 

Climate  change  is  not  the  only  environmental  challenge  to  achieving  MDG7. 
Biodiversity  and  ecosystems  must  be  preserved  as  they  provide  essential  services 
(water, forest biomass, soil fertility, topsoil, etc), on which the poorest are the most 
dependent.  Desertification  has  become  a  major  threat  to  biodiversity  and  a  major 
cause  of  loss  of  productive  capacity  all  over  the  world.  Deforestation  must  be 
addressed:  Many  in  the  developing  world  are  dependent  on  forests  for  their 
livelihood and their contribution to maintaining forests, in particular tropical forests, 
is  paramount  for  safeguarding  environmental  sustainability.  The  magnitude  of  the 
investments  needed  is  very  substantial  and  available  resources  should  be  used  to 
tackle the environmental problems coherently. 

8.2. 

The follow-up to the EU position for Doha and Poznan31: 

•  In  line  with  the  2007  Bali  Action  Programme,  the  EU  should  contribute  its  fair 
share to the financing needed for mitigation and adaptation to climate change in 
developing  countries  and  to  delivering  financing  efficiently,  effectively  and 
equitably. 

•  The EU confirmed that it will work for the effective implementation of the GCCA 
between the EU and poor developing countries most vulnerable to climate change 
and  will  explore  ways  to  mobilise  new  financial  resources  to  tackle  climate 
change and combat its negative impact. 

•  The  EU  is  ready  further  to  explore  the  contribution  that  innovative  sources  of 

funding can make to helping developing countries cope with climate change. 

•  As  regards  the  Clean  Development  Mechanism  the  EU  is  willing  to  promote  a 
more balanced geographical distribution of financing moving from a pure project 
focus to a sectoral approach. 

•  In  the  context  of  efforts  to  promote  energy  security  and  sustainability,  the  EU 
should  continue  to  promote  energy  efficiency  and  renewable  energy  and  pay 
careful  attention  to  the  sustainability  of  bio-fuels  as  one  source  of  renewable 
energy. 

9. 

CONCLUSIONS 

The Doha Conference was a success, but it also poses a challenge to the EU to build 
and  deliver  on  its  results.  Europe  needs  to  harness  Doha's  positive  dynamism  and 
carry  it  forward  in  the  global  partnership  which  was  strongly  reaffirmed.  The  EU 
must play its part and show the leadership needed to make live up to the promise of 
Doha. The EU should place the follow-up to Doha in a broader context, bridging the 

31 

Council Conclusions (ENVIRONMENT) of 20.10.2008 and (GAERC) of 11.11.2008 

EN 

45 

   EN 

 
                                                 
other major development events in 2008 (in Accra, on aid effectiveness and the UN 
high-level events on Africa and MDGs) and also the discussion on global governance 
issues  initiated  by  the  G20  summit  in  November  2008  and  further  pursued  by  the 
London Summit in April 2009. The following measures require specific attention of 
the Commission and the EU Member States: 

•  First  and  foremost,  the  EU  needs  to  keep  to  its  collective  and  individual  ODA 
pledges  based  on  the  main  collective  commitment  of  0.56%  of  ODA/GNI  for 
ODA  by  2010  and  0.7%  by  2015.  On  that  basis,  the  EU  should  argue  for  fairer 
burden-sharing  with  other  donors  and  expect  others  to  meet  and  upgrade  their 
pledges. 

•  The  EU  needs  to  be  innovative  with  financing  development  in  all  its  forms, 
including  adaptation  for  climate  change  particularly  in  the  poorest  developing 
countries.  The  implementation  of  the  Doha  Declaration  implementation  and 
UNFCCC  processes  need  to  move  forward  together.  Copenhagen  2009  will  not 
succeed without a sound solution on adaptation. 

•  There  is  a  need  to  bridge  the  Doha  results  with  the  process  of  reform  of  global 

governance structures to make them more inclusive. 

This  report  provides  a  baseline  for  monitoring  future  progress  by  the  EU  in  those 
areas  in  which  it  has  given  new  major  commitments,  namely  (i)  on  governance 
issues,  especially  with  regard  to  the  EU  priority  to  tackle  taxation  as  part  of  the 
broader  governance  agenda,  which  offers  potential  for  further  mobilisation  of 
domestic  resources  and  ;  (ii)  on  foreign  direct  investment  with  obligations  on 
responsibility  and 
transparency,  accountability,  corporate  social 
improved 
compliance with anti-corruption laws, labour and environmental standards. 

EN 

46 

   EN 

 
ABBREVIATIONS 

ACP: 
AFT: 
AMC: 
AT: 
AWEPA 
BCPR:  

BE: 
BG: 
CIAT: 
CIF: 
CSR: 
CY: 
CZ: 
DAC: 
DE: 
DK: 
DRR: 
DRRP:  
DSF: 
DTC 
EBRD: 
EC: 
ECOFIN 
EDF: 
EE: 
EIB: 
EIF: 
EITI 
EL: 
ENP: 
EPA: 
ES: 
ETS: 
EU-27:  
FAO: 
FFD 
FI: 
FLEGT: 
FLEX: 

FoS: 
FR: 
FFD: 
FSF: 
G 8: 

African, Caribbean and Pacific States, party to the Cotonou Agreement 
Aid for Trade 
Advance Market Commitment 
Austria 
Association of European Parliamentarians for Africa 
United  Nations  Development  Programme's  Bureau  for  Crisis  Prevention  and 
Recovery 
Belgium 
Bulgaria 
Centro International de Agricultura tropical 
Climate Investment Funds 
Corporate social responsibility 
Cyprus 
Czech 
Development Assistance Committee of the OECD 
Germany 
Denmark 
Disaster risk reduction 
Disaster Risk Reduction Prevention 
Debt Sustainability Framework 
Double Tax Convention 
European Bank for Reconstruction and Development 
European Community 
Economic and Financial Affairs Council 
European Development Fund 
Estonia 
European Investment Bank 
European Investment Fund 
Extractive Industries Transparency Initiative 
Greece 
European Neighbourhood Policy 
Economic Partnership Agreement 
Spain 
Emission Trading Scheme 
European Union 
Food and Agriculture Organisation 
Financing for Development 
Finland 
Forest Law Enforcement, Governance and Trade 
The  EU  instrument  to  compensate  African,  Caribbean  and  Pacific  (ACP)
countries for short term fluctuations in export earnings 
Framework of Standards 
France 
Financing for Development 
Financial Stability Forum 
Group  of  Eight  (Summit  of  Canada,  France,  Germany,  Italy,  Japan,  Russia,
United Kingdom and United States) 

EN 

47 

   EN 

 
 
 
 
GAERC 
GCCA 
GDP: 
GEEREF: 
GEF: 
GFDRR: 
GIIF: 
GNI: 
GPG: 
HIPC: 
HU: 
IBRD: 
ICF: 
IDA: 
IDB: 
IDLO: 
IE: 
IFF: 
IFFI: 
IFI: 
IFM: 
ILO: 
IMF: 
IPG: 
ISDR: 
ISO26000 
IT: 
ITC: 
LDC: 
LT: 
LU: 
LV: 
MDG: 
MDRI: 
MDTF: 
MTOs 
MoU: 
MS: 
MT: 
NAPA: 
NGO: 
NL: 
ODA: 
OECD: 
PGA: 
PL: 
PSD: 
PT: 
REDD: 
RO: 

General Affairs and External Relations Council 
Global Climate Change Alliance 
Gross Domestic Product 
Global Energy Efficiency and Renewable Energy Fund 
Global Environment Facility 
Global Facility for Disaster Risk Reduction 
Global Index Insurance Facility 
Gross National Income 
Global Public Goods 
Heavily Indebted Poor Countries 
Hungary 
International Bank for Reconstruction and Development 
Investment Climate Facility for Africa 
International Development Association 
Inter-American Development Bank 
International Development Law Organisation 
Ireland 
International Financial Facility 
International Finance Facility for Immunisation 
International Financial Institution 
Innovative Finance Mechanisms 
International Labour Organisation 
International Monetary Fund 
International Public Goods 
International Strategy for Disaster Reduction 
Standard on Social responsibility 
Italy 
International Tax Compact 
Least Developed Countries 
Lithuania 
Luxembourg 
Latvia 
Millennium Development Goals 
Multinational Debt Relief Initiative 
Multi-Donor Trust Fund of World Bank 
Money Transfer Operators 
Memorandum of Understanding 
Member States 
Malta 
National Adaptation Programmes of Action 
Non-Governmental Organisation 
The Netherlands 
Official Development Assistance 
Organisation for Economic Cooperation and Development 
President of UN General Assembly 
Poland 
Payment Service Directive 
Portugal 
Reducing emissions from deforestation and degradation 
Romania 

EN 

48 

   EN 

 
SE: 
SI: 
SIDS: 
SK: 
SME: 
Stabex: 
STAR: 
SYSMIN: 
TIEAs: 
UK: 
UN: 
UNDEF: 
UNDP: 
UNGA: 
UNFCCC: 
UNITAID: 
UNODC: 
UNSC:  
WB: 
WCO: 
WFP: 
WHO: 
WTO: 

Sweden 
Slovenia 
Small Island Developing States 
Slovakia 
Small and medium-sized enterprises 
System to Stabilise Export Earnings 
Stolen Assets Recovery Initiative 
Special assistance measure for the ACP mining 
Tax Information Exchange Agreements 
United Kingdom 
United Nations 
United Nations Democracy Fund 
United Nations Development Programme 
United Nations General Assembly 
United Nations Framework Convention on Climate Change 
United Nations International Drug Purchase Facility 
United Nations Office on Drugs and Crime 
United Nations Security Council 
World Bank 
World Customs Organisation 
World Food Programme 
World Health Organisation 
World Trade Organisation 

EN 

49 

   EN 

 
 
 
Annex 1: UN Convention against Corruption (Merida Convention) - State of signature 
and ratification by the EU (on 15.03.2009) 

Country 

signature 

AT 
BE 
BU 
CY 
CZ 
DK 
EE 
FI 
FR 
DE 
EL 
HU 
IE 
IT 
LV 
LT 
LU 
MT 
NL 
PL 
PT 
RO 
SK 
SI 
ES 
SE 
UK 
EC 

. 

10 Dec 2003  
10 Dec 2003  
10 Dec 2003  
9 Dec 2003 
22 Apr 2005 
10 Dec 2003 

9 Dec 2003 
9 Dec 2003 
9 Dec 2003 
10 Dec 2003 
10 Dec 2003 
9 Dec 2003 
9 Dec 2003 
19 May 2005 
10 Dec 2003 
10 Dec 2003 
12 May 2005 
10 Dec 2003 
10 Dec 2003 
11 Dec 2003 
9 Dec 2003 
9 Dec 2003 

16 Sep 2005 
9 Dec 2003 
9 Dec 2003 
15 Sep 2005 

acceptance 
ratification, 
(AA), 
approval 
(A), 
Accession  (a);  Succession 
(d) 
11 Jan 2006  
25 Sep 2008  
10 Oct 2006 
23 Feb 2009 

26 Dec 2006 

20 Jun 2006 A 
11 Jul 2005 

17 Sep 2008 
19 Apr 2005 

4 Jan 2006 
21 Dec 2006 
6 Nov 2007 
11 Apr 2008 
31 Oct 2006 A 
15 Sep 2006 
28 Sep 2007 
2 Nov 2004 
1 Jun 2006 
1 Apr 2008 a 
19 Jun 2006 
25 Sep 2007 
9 Feb 2006 
12 Nov 2008 AA 

EN 

50 

   EN 

 
 
 
 
 
 
 
 
Annex  2:  The  Commission  methodology  applied  for  analysing  ODA  indications  of  EU 
Member States:  

Figures on Official Development Assistance (ODA) in current prices have been taken 
from  the  OECD  Development  Assistance  Committee  (DAC)  for  the  years  2007  and 
2008  for  those  Member  States  which  report  to  the  DAC  and  for  which  the  DAC 
publishes ODA information.  

For those Member States for which public DAC information on ODA volumes is not 
available,  figures  for  2007  and  2008  are  taken  from  Member  States'  replies  to  the 
annual "Monterrey" survey organised by the Commission.  

For ODA volumes for the year 2009 and beyond, ODA figures have been taken from 
Member  States’  replies.  For  Members  States  which  indicate  ODA  in  national 
currencies the Commission’s annual average exchange rates of the respective years 
will be applied to convert them into euro. Up to 2010, the exchange rates are taken 
from  the  Commission’s  autumn  2008  forecast  and,  beyond  that,  nominal  exchange 
rate stability is assumed. Where a Member State presents only the ODA/GNI ratio, 
ODA will be calculated by multiplying it with the Commission’s projected GNI figure 
for that country. Where a Member State has given both an ODA amount and the 
ODA/GNI ratio, the Commission has given preference to using the ODA amount 
as this gives a better indication of where the achievement of ODA/GNI targets is 
sensitive  to  differing  assumptions  on  GNI.  Where  information  on  both  ODA  and 
ODA/GNI ratio was missing the Commission assumed that the ODA/GNI targets for 
2010 (0.51% for EU-15 Member States and 0.17% for Member States that joined the 
EU  after  2002)  and  2015  (0.7%  for  EU-15  Member  States  and  0.33%  for  Member 
States  that  joined  the  EU  after  2002)  would  be  achieved  and  by  multiplying  them 
with  the  Commission’s  GNI  figures  to  derive  the  ODA  volume  amount.  For  the 
remaining years the Commission calculated the missing ODA figures by distributing 
the  absolute  difference  between  the  ODA  volume  of  the  latest  year  for  which 
information was provided and the ODA volume required to meet the 2010 and 2015 
targets equally over these years (simulating a linear increase). 

Figures  for  Gross  National  Income  (GNI)  in  current  prices  are  outcome  for  2007, 
estimates  for  2008  and  calculations  based  on  GDP  figures  from  the  January  2009 
interim forecast for the years 2009 and 2010. GNI figures for the years 2011 to 2013 
have  been  calculated  by  applying  the  Commission’s  country-specific  projections  of 
nominal  GDP  growth  rates.  The  Commission’s  projections  are  based  on  potential 
output  growth  estimates  until  2015,  which  were  also  used  for  the  purpose  of 
budgetary calculations in the context of the EU financial framework 2007-2013 

EN 

51 

   EN 

 
Annex3: Africa – infrastructure priorities 

The  Infrastructure  Partnership,  defining  the  continental  priorities  for  strengthening  regional 
integration and social and economic development of Africa, was endorsed by the Council (17 
October 2006) and by the African Union, most recently at the AU Summit in February 2009. 
African countries were encouraged to back these priorities at the national level. 

1. Transport 

Eight Trans-African transport corridors were identified as the main continental axes that will 
be promoted in the context of the EU-Africa Infrastructure Partnership. These corridors are: 

Dakar 
Nouakchott 
Khartoum 
Lagos   
Le Caire 
N'djamena 
Beira 
Dar Es Salam 

N'djamena 
Lagos 
Djibouti 
Mombasa 
Gaborone 
Windhoek 
Lobito 
Kigali 

2. Energy 

The Partnership refers to the electricity interconnections in Africa, notably to the projects of 
continental relevance identified by NEPAD and the five regional power pools (the Maghreb 
Union  (COMELEC),  the  Southern  Africa  Power  Pool  (SAPP),  the  West  Africa  Power  Pool 
(WAPP), the Central Africa Power Pool (CAPP) and the Eastern Africa Power Pool (EAPP)). 
The  power  pools  include  national  utilities  of  member  countries  that  are  responsible  for 
optimising use of regional energy resources and country-to-country support during an energy 
crisis.  The  power  pools  are  based  on  a  multitude  of  legal  documents,  such  as  inter-
governmental, inter-utility agreements, agreements between operating members and operating 
guidelines.  

3. ICT 

Following priorities have been identified in the Partnership and deserve specific attention in 
the short term:  

–  African  Internet  Exchange  System,  facilitating  the  use  of  internet  across  the 

continent 

–  Africa  Connect,  connect  sub-Saharan  Africa  to  the  European  high-speed 

education network - GEANT 

–  GMES-Africa,  extending  Earth  Observation  capacities  and  applications  to  the 

African Continent. 

EN 

52 

   EN 

 
 
Annex 4 – Infrastructure priorities: Union for the Mediterranean  

I. ENP - Barcelona process - Union for the Mediterranean.  

At the Paris Summit in July 2008 the following priority areas were identified:  

–  De-pollution of the Mediterranean. The implementation of this programme, building on 
the Horizon 2020 strategy, will have an important infrastructural dimension. It will focus 
on  coastal  protection,  construction  of  water  treatment  plants  and  pipelines,  improving 
urban  sewage  systems,  construction  of  waste  and  re-cycling  units  and  relative  access 
infrastructures.  

–  Maritime and Land Highways and South-South integration. This sectoral strategy will 
focus on the development of “highways for commerce” and “motorways of the sea”. This 
would include connection of ports, the creation of coastal motorways, the modernization of 
trans-Maghreb  train  and  the  construction  of  infrastructures  relevant  for  trade  integration, 
maritime  safety  and  handling  of  goods,  in  a  perspective  of  global  integration  in  the 
Mediterranean region.  

–  Alternative  energies.  This  strategy  will  focus  on  the  development  of  a  Mediterranean 
Solar  Plan,  taking  into  account  that  alternative  sources  of  energy  are  a  priority  in  the 
Mediterranean region. 

Moreover, during the 5th Euro-Mediterranean Ministerial Conference on Energy in Limassol, 
on 16-17 December 2007, the Energy Ministers adopted the "Priority Action Plan for Euro-
Mediterranean Energy Cooperation 2008-2013". The  Ministerial  meeting agreed on a list of 
priority  interconnections  and  infrastructure  projects  of  common  interest  in  the  region.  For 
North Africa that this relates to: 

–  The Trans Saharan Gas Pipeline “TSGP” Nigeria-Algeria-Spain-Italy; 

–  The  North  African  branch  of  the  Mediterranean  Energy  Ring–  both  natural  gas  and 

electricity. 

EN 

53 

   EN