Commission staff working document - Report evaluating the implementation of the financial instruments for external actions accompanying the Communication from the Commission to the European Parliament and the Council Mid-term review of the financial instruments for external actions {COM(2009) 196}
Date: 2009-04-21
Institutions: European Commission
Subjects: EU programme, activity report, financial aid, financial management

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.4.2009 
SEC(2009) 530 

COMMISSION STAFF WORKING DOCUMENT 

Report evaluating the implementation of the financial instruments for external actions  

Accompanying the 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 
Mid-term review of the financial instruments for external actions  

{COM(2009) 196} 

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1. 

DEVELOPMENT COOPERATION INSTRUMENT 

In the new framework for planning and delivering assistance, Regulation (EC) No 1905/2006 
establishes  a  financing  instrument  for  development  cooperation  providing  direct  support  for 
the Community’s development cooperation policy. The primary and overarching objective of 
EU  development  cooperation  is  the  eradication  of  poverty  in  the  context  of  sustainable 
development,  including  pursuit  of  the  Millennium  Development  Goals  (MDGs)  as  stated  in 
Article 2.1 of the regulation. The EU is determined to work to assist the achievement of these 
goals and the development objectives agreed at the major UN conferences and summits. 

Development  cooperation  under  the  DCI  is  implemented  through  geographic  and  thematic 
programmes  (including  the  “sui  generis”  programme  related  to  the  ACP  sugar  protocol 
countries). 

1.1. 

Geographic  programmes:  Latin  America,  Asia,  Central  Asia,  Middle  East, 
South Africa 

1.1.1  Delivery against the declared objectives 

Geographic  programmes  should  support  the  development  of,  and  reinforce  the  cooperation 
with eligible countries and regions in Latin America, Asia, Central Asia, the Middle East and 
South  Africa.  The  geographic  programmes  for  DCI  countries  and  regions  have  in  general 
been  operating  smoothly  and  without  major  problems.  They  have  allowed  the  EU  to 
contribute  to  the  DCI  objectives  and  should  contribute  positively  to  the  development  of  the 
countries  and  regions  concerned.  In  the  preparation  and  implementation  of  geographic 
strategy  papers  and  multiannual  indicative  programmes,  the  principles  of  aid  effectiveness, 
ownership,  partnership,  coordination,  harmonisation,  alignment  with  recipient  country  or 
regional  systems  and  results-oriented  approach  were  applied.  The  programming  documents 
were  also  drafted  taking  in  consideration  the  differentiated  and  specific  conditions  of 
countries and (sub)regions. Their implementation started in 2007 with the adoption of the first 
Annual Action Programmes. 

In  the  case  of  Latin  America,  Country  Strategy  Papers  (CSPs)  for  the  17  countries,  three 
Regional Strategy Papers (RSPs) for Mercosur, the Andean Community and Central America, 
and  one  Regional  Strategy  Paper  for  Latin  America  were  prepared  and  approved  for  the 
period  2007-2013.  As  specified  in  the  DCI,  Community  assistance  to  Latin  America 
supported actions with particular attention to the areas of cooperation specified in Article 6 — 
reflecting  the  specific  situation  in  Latin  America.  In  particular,  the  promotion  of  social 
cohesion,  that  is  the  fight  against  poverty,  inequality  and  exclusion,  is  at  the  centre  of  the 
programming  exercise  as  a  focal  sector  for  a  large  majority  of  National  Indicative 
Programmes. Also, support to regional integration at sub-regional level is the main priority in 
the  RSPs  for  Mercosur,  the  Andean  Community  and  Central  America,  and  strong  emphasis 
has been put on support to higher education at the global regional level.  

In the case of Asia, 18 Country Strategy Papers and one Regional Strategy Paper for Asia for 
the  period  2007-2013,  and  their  corresponding  Multi-annual  Indicative  Programmes  (MIPs) 
2007-2010,  were  prepared  in  2005-2006.  In  addition,  under  Article  23  of  the  DCI,  three 
special  measures  not  provided  for  in  the  strategy  papers  or  multiannual  indicative 
programmes were adopted for Sri Lanka, Indonesia and the Democratic People’s Republic of 
Korea. As stated in the DCI, Community assistance to Asia is consistent with Article 5 with a 
special  emphasis  on  a  number  of  areas  of  cooperation  mentioned  in  Article  7  reflecting  the 
specific  situation  of  Asia.  In  particular,  MDGs  in  the  field  of  health,  including  HIV/AIDS, 

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and education, inter alia, through policy dialogue for sectoral reform, are at the heart of the 
programming  exercise  as  focal  sectors  for  the  majority  of  MIPs  2007-2010  (health:  15.5%; 
basic education: 18,5%); addressing governance issues in particular in fragile States is highly 
relevant  for  Afghanistan,  Nepal,  Philippines,  and  Sri  Lanka;  encouraging  greater  regional 
integration  and  cooperation  is  reflected  in  the  majority  of  programming  documents; 
contributing to the control of epidemics and zoonoses is one of the main priorities under the 
Regional  Programming  for  Asia;  promoting  sustainable  development  in  all  its  dimensions, 
with  particular  attention  to  the  protection  of  forests  and  biodiversity  is  programmed  for 
Bangladesh,  Bhutan,  China  and  under  the  Regional  programming,  and  fighting  against 
production,  consumption  and  trafficking  of  drugs  and  against  other  trafficking  concentrates 
mainly on Afghanistan. 

Concerning  Central  Asia,  Community  assistance  is  embedded  in  one  Regional  Strategy 
Paper  for  2007-2013  and  a  Multi-annual  Indicative  Programme  for  2007-2010.  The  latter 
document  identifies  the  specific  focal  sectors  retained  for  the  Central  Asia  regional 
cooperation  programme  and  for  each  country  in  particular,  with  emphasis  on  a  number  of 
areas of cooperation mentioned in Article 7 reflecting the specific situation of Central Asia. 
The  adoption  by  the  European  Council  of  a  Strategy  for  a  new  enhanced  partnership  with 
Central Asia in June 2007 has given impetus to dialogue and reinforced cooperation with the 
five  countries  on  major  issues  facing  the  region  for  poverty  reduction,  sustainable 
development and stability which had been at the heart of the programming exercise for 2007-
2013 and can now be  pursued  with  a higher level of political  commitment and impact. The 
overriding priority given to poverty reduction was translated in the primacy of social sectors 
— social protection, health and education — and community based rural development in the 
assistance.  Particular  attention  was  also  given  to  governance  issues,  notably  public  finance 
management  and  the  rule  of  law,  which  reflect  directly  on  government  implementation  of 
reform  policies,  and  particularly  on  the  impact  and  efficiency  of  Community  assistance. 
Coordination with other donors, including through participation in drafting and follow up on 
Joint Country Strategies has also enabled to improve EU response and impact of assistance at 
country level. 

In  the  DCI  Middle  East  region  (Iraq,  Iran,  Yemen),  only  Iraq  and  Yemen  have  so  far 
benefitted  from  assistance;  Iran  is  a  potential  beneficiary  but  has  received  no  DCI 
geographical  assistance  since  2007.  The  unique  instability  of  Iraq  has  necessitated  an 
annualised  approach  using  Special  Measures  under  Article  23  DCI  to  enable  the  responsive 
deployment  of  reconstruction,  rehabilitation  and  development  assistance,  as  well  as  close 
coordination  with  humanitarian  relief  efforts.  The  high-risk  environment,  and  consequent 
constraints on in-country project management, dictated that most DCI support until 2008 was 
delivered  through  the  United  Nations-World  Bank  multi-donor  trust  fund  (IRFFI),  to  which 
the EU has been the largest donor. In future, as Community funding is delivered progressively 
through bilateral channels and programmed on a multiannual basis, it will be vital to maintain 
the high level of coordination that was built in the multi-donor trust fund.  

The case of Yemen is less atypical, involving the preparation and implementation of a CSP 
with  an  unequivocal  focus  on  the  MDGs,  notably  in  the  areas  of  health,  governance,  food 
security  and  agriculture.  This  said,  increasing  potential  for  state  fragility,  as  well  as  high 
exposure to food price increases, will almost certainly imply careful mid-term review of the 
CSP, to ensure that EU assistance to Yemen forms part of a coordinated and concerted effort 
to maintain stability as well as promote the development of the country. The DCI has, overall, 
provided a sound basis for much of the EU cooperation with these two countries. Financing 
from  other  instruments  and  thematic  programmes  (IfS,  EIDHR,  Food  Security)  has  also 

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offered  valuable  complementary  sources,  for  specific  purposes.  However,  scope  for  certain 
cooperation activities in Iraq and Iran (such as energy cooperation, public diplomacy) which 
could  be  ineligible  as  ODA  is  being  provided  for  in  the  legislative  proposal  for  non-ODA 
cooperation.  

The  MDGs,  and  in  particular  poverty  eradication,  employment  creation  and  basic  services, 
constitute the bulk of the Commission’s development cooperation in South Africa. Between 
65  and  85%  of  the  multiannual  Indicative  Programme  over  2007-2010  is  targeted  towards 
employment creation and service delivery for social cohesion, including health and education 
programmes. So far, the instrument has enabled implementation of the main policy objectives, 
both in terms of poverty alleviation and reduction of inequalities in the country, as well as in 
terms  of  supporting  the  broader  EU  dialogue  and  cooperation  with  South  Africa.  Overall, 
dialogue  with  Parliament  as  foreseen  in  the  instrument  has  been  supportive  of  the 
Commission’s objectives with respect to the implementation of development cooperation with 
South  Africa.  The  programming  allocates  between  30-40%  for  capacity  for  service  delivery 
and social cohesion. In addition, 5-20% of the envelope is earmarked for support in the area 
of governance, and 4-10% for regional and pan-African support. Up to 5% of the South Africa 
envelope is reserved for supporting policy dialogue and EU-SA cooperation in a wide range 
of  areas  like  environmental  policy,  energy,  trade-related  issues,  transport,  etc.  This  is  a 
relatively  small  proportion  and  is  justified  from  the  perspective  of  supporting  the  broader 
scope of EU-SA relations and of facilitating dialogue to ensure the full implementation of the 
Trade, Development and Cooperation Agreement (TDCA) with South Africa. All actions are 
supported  from  the  perspective  of  contributing  to  poverty  eradication,  employment  creation 
and sustainable development.  

The  democratic  scrutiny  dialogue  with  the  European  Parliament  has  been  an  innovative 
mechanism in the process of adopting the strategy documents. The Commission entered into a 
dialogue with the Parliament as agreed during the negotiations leading to the adoption of the 
instruments  and  reflected  in  declarations  No  4  and  5  attached  to  the  Interinstitutional 
Agreement on budgetary discipline and sound financial management. The democratic scrutiny 
dialogue provides for the draft thematic, regional, and country strategy papers of co-decided 
instruments  to  be  sent  to  the  Parliament  and  for  the  Commission  to  take  its  comments  into 
account. When examining the draft strategy papers, the Parliament expressed concern about 
some of the programmed measures which it considered not to be sufficiently geared towards 
the eradication  of  poverty and the  Millennium Development Goals. The Parliament adopted 
four  resolutions1  under  its  formal  right  of  scrutiny  (Article  8  of  the  comitology  decision2) 

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Resolution  of  15  February  2007  on  the  draft  Commission  decisions  establishing  Country  Strategy 
Papers and Indicative Programmes for Malaysia, Brazil and Pakistan (OJ C 287 E, 29.11.2007, p. 507).

Resolution of 7 June 2007 on the draft Commission decision establishing Regional Strategy Papers and 
Regional  Indicative  Programmes  for  Mercosur  and  Latin  America  (OJ  C  125  E,  22.5.2008,  p.  213).

Resolution  of  21  June  2007  on  the  draft  Commission  decision  establishing  a  Regional  Strategy 
Document  2007-2013  and  a  Multiannual  Indicative  Programme  for  Asia  (OJ  C  146  E,  12.6.2008,  p. 
337). 

Resolution of 25 October 2007 on the draft Commission decision establishing a Special Measure 2007 
for Iraq (OJ C 263 E, 16.10.2008, p. 624). 

Council  Decision  1999/468/EC  (OJ  L  184,  17.7.1999,  p.  23),  as  last  amended  by  Council  Decision 
2006/512/EC. 

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pursuant to Rule 81 of its Rules of Procedure, signalling that, in its view, the Commission had 
exceeded its implementing powers and calling for the withdrawal of the measures. 

While the Commission was of the view that virtually all the activities concerned were fully 
covered by the DCI, it nevertheless responded to the EP’s concerns by amending its approach 
and withdrawing some contested activities from indicative programmes. This was the case for 
Brazil  (where  the  proposal  for  a  Euro-Centre  was  modified);  for  Mercosur  (where  the  film 
industry  programme  was  put  on  hold  and  will  be  financed  under  a  preparatory  action);  for 
Malaysia (where the Commission accepted the EP’s points on the EU visibility programme); 
and  for  the  regional  strategy  on  Asia  (where  the  component  ‘support  to  research  institutes’ 
was removed and will be funded under separate preparatory actions).  

In addition, with the rise of emerging economies, in particular China, India and Brazil, and the 
intensification  of  EU  relations  with  several  dynamic  developing  country  partners,  the 
possibility  of  funding  measures  beyond  Official  Development  Assistance  (ODA)  in 
developing countries is becoming increasingly important. In that context, the budget authority 
launched four preparatory actions aimed at supporting measures which it considered could not 
be  financed  under  the  DCI  (e.g.  for  business  centres  in  China  and  India,  and  for  ‘sectors 
capable of developing independently’ in Asia and Latin America). By definition, Preparatory 
Actions  are  meant  to  provide  for  temporary  support  and  are  supposed  to  lead  to  legislative 
proposals within three years. Therefore, current preparatory actions are building the basis for 
a longer-term support to finance certain activities in the EU’s interest.  

The  dialogue  with  the  Parliament  also  gave  the  opportunity  to  exchanges  views  on  higher 
education. The objective in this sector is to build upon the success of Erasmus Mundus (EM), 
adapting  it  in  the  context  of  development  cooperation  —  through  the  EM  External 
Cooperation Window (EMEWC) set up by the Commission. The actions include the financing 
of fellowships for Latin American, Asian, and South-African students and academics coming 
to the EU, and also the sending of EU students (and academic staff, including researchers, to 
reinforce local capacity building in the sector). The Parliament has objected to using the DCI 
for  financing  the  European  mobility  component  on  the  grounds  that  it  does  not  fulfil  the 
criteria for ODA eligibility3. Following the EP’s request, the Commission agreed to exclude 
from the DCI measures to send EU students as from 2010 onwards, and to find a legislative 
solution under the mid-term review of the instruments. 

In conclusion, the current DCI Regulation constrains the  scope of the bilateral geographical 
cooperation  with  eligible  countries  by  requiring  all  measures  financed  to  fulfil  the 
OECD/DAC  criteria  for  Official  Development  Assistance.  Legislative  follow-up  to  the 
Preparatory  Actions  is  proposed  to  fill  this  gap  in  order  to  have  an  enabling  instrument  to 
cover activities, in particular for emerging countries, which do not meet ODA criteria.  

1.1.2 

Implementation issues 

The  DCI  regulation  presents  a  number  of  advantages  in  relation  to  the  previous  regulation 
(ALA). It introduces new methods of implementation facilitating joint financing arrangements 
with other development partners such as the pooling of funds through the joint co-financing 
mechanism  (DCI  Article  27(2)).  It  is  therefore  more  adapted  to  the  efforts  of  donor 
harmonisation  and  alignment  to  national  procedures  and  strengthens  the  ownership  of  the 
programmes  by  the  recipient  countries.  Moreover,  the  DCI  allows  faster  and  more  relevant 

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Resolution of 9 July 2008 on the draft Commission decisions establishing Annual Action Programmes 
for Brazil for 2008 and for Argentina for 2008 (Texts adopted, P6-TA(2008)0338). 

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preparation of programmes, as identification formulation and implementation rely more and 
more  on  the  most  experienced  donor  in  the  beneficiary  country  or  region.  It  is  also  more 
effective because the DCI allows pooling of funds (i.e. joint co-financing) around a common 
objective defined by the recipient countries and donors.  

This  aspect  is  strengthened  by  the  introduction  of  annual  action  programmes,  which  ensure 
better consistency between the programmes prepared by the Commission for a given year and 
the  overall  framework  of  the  country  strategies  formalised  by  the  strategy  papers  and  the 
multiannual  programming.  The  Commission  also  makes  constant  efforts  to  improve  the 
availability  of  information  about  the  implementation  and  evaluation  of  its  programmes  in 
particular when they are implemented through budget support and/or trust funds.  

Implementation  of  programmes  and  projects  started  relatively  recently  (end  of  2007).  The 
main difficulties encountered are linked to the payment of taxes, duties and charges. There is 
a  need  for  a  technical  amendment  to  harmonise  Article  25(2)  of  the  DCI  Regulation  with 
other  instruments  so  as  to  allow  payment  of  taxes,  duties  and  charges  in  exceptional  cases, 
notably where the goal of the relevant action can only be attained if it is financed in full by 
Community funds. The same technical problem appears with the EIDHR instrument working 
mainly with NGOs.  

The harmonisation of such flexibility with the wording “in principle” will be framed through 
internal guidelines for all instruments since the exception to the principle has to be granted on 
a case by case basis giving duly justified reasons. 

1.1.3  Delivery against the commitments undertaken 

The  adoption  of  the  DCI  Regulation  was  accompanied  by  a  Commission  Declaration 
concerning Article 5 of the DCI (geographic programmes) where the Commission reaffirms 
that the eradication of poverty and the pursuit of the Millennium Development Goals (MDGs) 
are at the core of the primary objectives of its development assistance.  

In  line  with  MDGs,  the  objectives  and  general  principles  of  the  DCI  are  to  implement 
Geographic and Thematic programmes aiming at strengthening human development (notably 
health  and  education),  social  cohesion  and  employment,  governance  and  democracy,  trade 
and  regional  integration,  environment  and  sustainable  development  of  natural  resources  and 
contributing  to  the  stabilisation  of  post-crisis  situation  and  fragile  states.  In  2002  the 
Commission  reached  an  understanding  with  the  European  Parliament  to  report  on  a 
benchmark  of  35%  of  geographic  cooperation  with  developing  countries  under  the  budget 
being allocated to social infrastructure and services, including macroeconomic assistance with 
social sector conditionality. The Commission has further committed to prioritise basic health 
and  education,  and  social  cohesion  as  a  whole  in  its  programming,  and  to  include  an  MDG 
profile  in  the  programming  documents.  The  35%  benchmark  has  been  superseded  but  the 
Commission’s  commitment  is  to  continue  reporting  annually  on  actual  spending  in  these 
sectors.  A  new  commitment  is  “to  endeavour  to  ensure  that  a  benchmark  of  20%  of  its 
allocated assistance under country programmes is dedicated, by the year 2009, to basic and 
secondary education and basic health, through project, programme or budget support linked 
to  these  sectors,  taking  an  average  across  all  geographical  areas  and  recognising  that  a 
degree of flexibility must be the norm, such as exceptional assistance”. The Commission took 
this element into account in its dialogue with recipient countries/regions and  difficulties are 
not foreseen to reach that target. Assistance to each and every country will not necessarily be 
able to reach this benchmark — because of ownership and donor coordination as set out in the 
“European Consensus on Development” — but this goal will be achieved on average across 
all  geographical  areas  as  agreed.  The  Commission  has  also  included  in  its  2008  Annual 

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Report on EC External Assistance the follow up of the 20% benchmark. Aid directly targeting 
basic  health  and  basic  and  secondary  education  sectors  reached  some  17%  of  total 
commitments in 2007 under the relevant geographical programmes (Asia, Latin America and 
South  Africa),  even  without  including  general  budget  support  linked  to  these  sectors.  The 
Commission is thus well on track to reach, by 2009, the 20% goal agreed with the adoption of 
the DCI Regulation for assistance to these sectors under the DCI country programmes.  

However,  such  financial  input  benchmarking  is  not  the  most  effective  approach  to  aid 
assessment. In line with the international commitments on aid effectiveness, the Commission 
has  increasingly  shifted  attention  from  input-based  approaches  to  management  for  results, 
thereby  promoting  division  of  labour  and  budget  support.  As  a  result,  it  would  be  more 
effective  to  replace  such  benchmarking  by  a  more  up-to-date  systematic  follow  up  of  the 
social  sectors,  so  as  to  ensure  that  health  and  basic  and  secondary  education  are  priority 
sectors  in  government  development  plans  and  that  from  the  donor  perspective  these  sectors 
are indeed not orphan aid sectors. 

1.1.4  Adequacy of the financial envelopes and financial provisions 

The  programming  2007-2009  has  been  established  in  line  with  the  financial  envelopes 
allocated to the respective regions (Annex IV of the DCI Regulation). There are no specific 
difficulties  regarding  these  envelopes,  so  there  is  no  need  to  change  the  indicative  financial 
allocations for the period 2007-2013. The budget authority has increased the Latin America, 
Asia,  Central  Asia  and  Middle  East  (Iraq,  Iran,  Yemen)  envelopes  by  respectively  EUR  14 
million,  EUR 27  million,  EUR 4  million,  and  EUR 15  million  over  2007-2008  compared  to 
the legislative financial statement reflecting the initial programming of the indicative amounts 
within  the  reference  amount  of  the  Regulation.  The  programmed  profile  2009-2013  of  the 
Central Asia envelope has been adjusted further to the new enhanced partnership with Central 
Asia  adopted  in  June  2007  by  frontloading  part  of  the  envelope  over  2009-2010  without 
modifying the overall indicative allocation.  

The  DCI  Middle  East  (Iraq,  Iran,  Yemen)  allocation  was  programmed  to  decline  in  size 
significantly over the period (from EUR 109 millions in 2007 to less than EUR 60 millions 
from  2010  onwards).  This  decline  assumed  that  the  volume  of  aid  to  Iraq  would  decrease 
dramatically  according  to  progress  in  the  situation  of  the  country,  that  the  volume  for  Iran 
would  remain  negligible  in  view  of  the  political  circumstances,  and  that  the  volume  for 
Yemen should remain steady. The need to continue with an — albeit much smaller — support 
programme  for  Iraq  is  evident,  and  the  focus  will  shift  away  from  reconstruction  towards 
much  less  capital-intensive  capacity  building.  The  situation  in  Yemen,  however,  has 
deteriorated to the point where weak governance and increasing poverty levels have created a 
situation of unrest and potential for state fragility to which the EU is committed to responding 
with  the  full  range  of  instruments  at  its  disposal,  from  crisis  response  to  longer  term 
development  tools.  The  mid-term  review  of  the  Yemen  Country  Strategy  will  reflect  these 
developments.  

1.2 

Thematic  programmes:  Migration  and  asylum, 
in  people, 
Environment  and  sustainable  management  of  natural  resources  including 
energy,  Non-state  actors  and  local  authorities  in  development,  Food  security, 
ACP sugar protocol countries 

Investing 

The implementation of the thematic programmes and projects started relatively recently. No 
major difficulties have been encountered.  

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1.2.1  Non-state actors and local authorities in development (NSA)  

The objective of this thematic programme is to co-finance initiatives proposed or carried out 
by civil society organisations and local authorities originating in the Community and partner 
countries in the area of development.  The  programme  must  be implemented consistent  with 
the objective of the DCI and strengthen the capacity of non-state actors and local authorities 
in the policy making process, so as to: 

- Promote an inclusive and empowered civil society. 

- Increase awareness of “development issues” among European citizens. 

- Improve networking and communication between European NSA and LA associations, and 
of these networks with European institutions. 

The  multiannual  strategy  was  adopted  in  July  2007.  No  issues  were  raised  during  the 
democratic  scrutiny  and  comitology  process.  The  strategy  has  been  implemented  through 
annual action programmes (AAP). The approval of the first Annual Action Programme by the 
Member States, while completely in line with the multiannual strategy adopted previously by 
them,  has  revealed  to  be  difficult.  The  main  problem  lied  in  the  definition  of  priority 
countries,  with  Member  States  seeking  to  include  countries  that  were  not  considered  by  the 
Commission as satisfying the selection criteria defined in the multiannual strategy and guided 
by  the  principles  of  subsidiarity  and  complementarity.  In  line  with  the  strategy  paper  2007-
2010, in-country interventions are targeted on cases which demonstrate a specific added-value 
to  the  different  geographic  programmes  (EDF,  DCI  geographic  programmes,  ENPI)  as 
follows:  

•  Country situations which are not conducive to ensuring NSA involvement such as: difficult 
partnerships (suspended NIP, no government commitment to basic development principles, 
no status for NSAs), unstable situations, conflicts, poor governance, etc. 

•  Populations  out  of  reach  of  mainstream  services  and  resources,  excluded  from  policy 

making processes. 

•  Multi-country  and/or  multi-regional  interventions,  networking  and  coordination  activities 
ensured  more  efficiently  through  the  thematic  programme  than  through  geographic 
programmes. 

The  definition  of  these  selection  criteria  may  be  reviewed  in  the  mid-term  review  of  the 
strategy  paper  for  the  next  programming  period  (2011-2013)  in  order  to  make  them  more 
tangible. 

The  award  of  projects  selected  under  the  calls  for  proposals  covered  by  the  2007  Annual 
Action  Programme  was  completed  at  the  end  of  2008.  In  support  of  actions  in  developing 
countries  (objective  1),  the  Commission  selected  385  projects  proposed  by  non-state  actors 
from the EU and partner countries and 32 projects proposed by local authorities from the EU 
and  partner  countries  for  a  total  contribution  of  EUR  171.7  million,  comprising  EUR  106.8 
million  for  projects  selected  under  local  calls  for  proposals  managed  by  EC  Delegations  in 
partner  countries  and  EUR  64.9  million  for  projects  selected  under  centralised  calls  for 
proposals  managed  by  EuropeAid  headquarters.  Activities  raising  the  awareness  of  the 
European  public  (objective  2)  were  supported  for  a  total  contribution  of  EUR  27.8  million 
supporting  47  projects  (out  of  which  41  proposed  by  non-state  actors  for  EUR  25.1  million 
and  6  proposed  by  local  authorities  for  EUR  2.7  million).  Activities  fostering  coordination 
and  networking  of  non-state  actors  and  local  authorities  (objective  3)  working  on 
development  were  also  supported  for  a  total  contribution  of  EUR  3.9  million  supporting  8 

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projects  (6  proposed  by  non-state  actors  for  EUR  3.3  million  and  2  proposed  by  local 
authorities totalling EUR 0.6 million). 

As regards the 2008 annual action programme, 5 centralised calls for proposals were launched 
in  December  2008  and  another  71  have  been  published  or  are  to  be  published  by  EC 
Delegations. The process for the selection of proposals related to these calls is still ongoing 
and the results should be known before the end of 2009. In principle, the centralised calls for 
proposals published in December 2008 will cover budget years 2008 and 2009.  

The Commission has started compiling data from 2007 implementation, but it is too early to 
have practical feedback on outputs and impact of this programme.  

The  programmed  amounts  are  in  line  with  the  envelope  foreseen  in  the  Regulation.  The 
current outlook for the period 2010-2013 is that this situation should be maintained. 

1.2.2  Migration and asylum 

The thematic programme on Migration and Asylum is fulfilling its fundamental objective of 
assisting  third  countries  in  their  efforts  to  manage  better  their  migration  flows  and  asylum 
issues.  The  coverage  of  this  programme,  which  encourages  the  promotion  of  synergies 
between migration and development, support for legal labour migration, discouragement and 
control of illegal migration, the protection of migrants and successful management of asylum 
issues  has  offered  the  comprehensiveness  and  flexibility  to  tackle  emerging  routes  and  to 
accommodate new initiatives. 

The opportunity to implement the funding received through both annual Calls for Proposals 
and,  when  needed,  targeted  projects  with  international  organisation  has  added  needed 
flexibility  to  take  advantage  of  particular  types  of  expertise  needed  to  address  particular 
challenges  and  specific  situations.  Support,  for  example,  has  been  made  available  rapidly 
through  targeted  actions  in  response  to  the  negotiation  of  mobility  partnerships  with  third 
countries (e.g. Cape Verde, Moldova, Libya).  

Of the EUR 384 million envelope for this programme under the DCI Regulation for the period 
2007-13, EUR 205 million has been programmed under the 2007-10 Strategy Paper adopted 
in  2007.  These  funds  have  been  programmed  according  to  the  main  migratory  routes  as 
follows: Southern Route — EUR 70 million; Eastern Route — EUR 50 million; Middle East 
and Gulf — EUR 5 million; South and East Asia and the Pacific — EUR 16 million; Latin 
America and the Caribbean — EUR 16 million; Global and multi-regional actions — EUR 28 
million; Special measures (Art. 23 of DCI Regulation) — EUR 20 million. The 2009 Annual 
Action  Programme  will  be  adopted  in  mid-May  and  €48.36  million  is  programmed.  In 
addition, €3 million is planned to be committed at a  later stage this year for a project aiming at 
strengthening  African  countries  and  regional  economic  communities  (REC)  capacities  to 
cooperate on migration issues and actively monitor the implementation of the Africa and EU 
partnership on migration, mobility and employment. 

Due  to  the  very  nature  of  the  programme,  which  includes  among  its  objectives  asylum  and 
international  protection  as  well  as  curbing  illegal  migration,  some  activities  cannot  be 
classified  as  Official  Development  Assistance  (ODA).  This  was  specifically  foreseen  in  the 
Regulation  and  reflected  in  the  flexibility  granted  under  Article  2(4)  for  thematic 
programmes. 

The  European  Council  of  December  2005  established  that  up  to  3%  of  the  funding  for  our 
neighbours should be devoted to areas concerning or related to migration. Amounts of EUR 
48  million  and  EUR  52  million  were  allocated  respectively  in  2007  and  2008  to  the  DCI 
migration thematic programme for a wide geographical area, including ENPI countries. Under 

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the  DCI  migration  2007  and  2008  annual  programmes,  amounts  of  EUR  19.6  million  were 
allocated to the Eastern migratory route and EUR 27.6 million to the South migratory route 
that comprises ENPI and ACP countries. Over the period 2007-2010 some 50% of the global 
allocation  provided  under  the  migration  budget  line  is  set  to  benefit  ENPI  countries.  This 
funding, together with an estimated amount of EUR 90 million affected to migration-related 
measures under the ENPI countries, multi-country, and CBC programmes, will contribute to 
attaining the 3% objective. 

1.2.3  Environment and sustainable management of natural resources (ENRTP)  

The  objectives  with  respect  to  the  Environment  Thematic  Programme  have  been  flexible 
enough  to  accommodate  three  major  new  initiatives:  Global  Energy  Efficiency  and 
Renewable  Energy  (GEEREF),  Global  Climate  Change  Alliance  (GCCA)  and  Technology 
Transfer  for  Clean  Coal  (TTCC).  There  is  therefore  no  need  to  adjust  or  modify  the 
objectives.  The  ENRTP  includes  also  small  allocations  for  facilitating  policy  dialogue, 
coordination, analysis and consultation processes of the EU Water Initiative and EU Energy 
Initiative at global, interregional, subregional and regional levels for which the main funding 
is made available from the geographical instruments. 

The  ENRTP  can  be  considered  enabling  in  the  sense  that  it  is  a  helpful  instrument  to 
implement  certain  policies,  such  as  adaptation  to  climate  change,  promoting  energy 
efficiency,  FLEGT  (Forest  Law  Enforcement,  Governance,  and  Trade),  and  it  can  play  a 
catalytic role in making additional funding available (also from other donors) for these policy 
objectives.  However,  some  areas  like  biodiversity  and  desertification  require  special 
attention4. The objectives of the ENRTP remain very relevant for working towards achieving 
MDG No 7.  

There are some actions ineligible for Official Development Assistance (ODA), but these are 
relatively limited and can be accommodated within the flexibility granted under Article 2(4) 
for thematic programmes. Most of the actions under the ENRTP, including the contributions 
for GEEREF, are in fact ODA eligible. 

The  multiannual  strategy  was  adopted  in  June  2007.  Through  comitology  and  democratic 
scrutiny procedures, both Council and Parliament have argued for additional funding for the 
ENRTP.  Substantial  additional  funding  has  been  made  available  at  the  initiative  of  the 
Commission  for  the major initiatives  (GEEREF, GCCA and  Technology Transfer for Clean 
Coal) to respond to the need to deal with climate change adaptation. The main deviation from 
the legislative financial allocation (+EUR 176 million) stems from the decisions in the APS 
2008 and APS 2009 to allocate more resources for renewable energies and climate change and 
from  the  final  2009  Budget.  The  2008  APS  decision  added  EUR  50  million  for  climate 
change  (GCCA)  over  the  period  2008-2010  and  EUR  28.5  million  for  GEEREF  over  the 
period 2008-2009. The 2009 APS decision added a further EUR 10 million for climate change 
(GCCA) and EUR 60 million for technology transfer over the period 2009-2013. Some EUR 
10 million was added during the budget procedures, and the final 2009 Budget was adopted 
with a further reinforcement by the Budget Authority of EUR 17 million.  

The  Annual  Action  Programmes  (AAPs)  implementing  the  ENRTP  in  2007  and  2008  were 
adopted  by  the  Commission  on  3/12/2007  and  7/8/2008  respectively.  The  adoption  of  the 

4 

The  EU  is  not  on  track  to  achieve  its  target  of  reducing  biodiversity  loss  by  2010  according  to  the 
review of the EU biodiversity strategy, and desertification is a priority area of cooperation with the AU 
which currently receives limited funding. It should be noted also that neither is there enough funding 
from other sources for these policy objectives. 

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2009  AAP  is  expected  in  April  2009.  To  date,  almost  120  contracts  have  been  concluded 
under the two first AAPs, for a total EC contribution of more than EUR 150 million. 

The implementation of the programme with multiple priorities and sub-priorities is somewhat 
challenging.  Pooling  resources  and  running  calls  for  proposals  that  draw  on  two-year  rather 
than one-year financing has been identified as a first solution, which has been applied for the 
2007-2008 AAP call and will be applied for the 2009-2010 AAP call. The next multiannual 
programming  should  avoid  being  too  prescriptive  as  regards  yearly  allocations  and 
implementation  modalities,  which  should  be  left  open  for  discussion  in  the  context  of  the 
annual  programming.  This  would  allow  for  as  much  flexibility  for  implementation  and 
resource efficiency as possible. 

It  should  be  mentioned  that  the  ENRTP  has  not  been  designed  to  mobilise  resources  on  a 
significant scale to address environmental crisis situations. On the other hand, in future years, 
an  increased  focus  is  necessary  for  policy  objectives  like  biodiversity  and  the  fight  against 
desertification.  

1.2.4  Accompanying Measures for Sugar Protocol countries (AMSP)  

The  objective  of  supporting  the  adjustment  processes  of  the  Sugar  Protocol  (SP)  countries 
following the reform of the Common Market Organisation (CMO) for sugar in 2006 remains 
valid. Given the different situations and prospects in SP countries, their adjustment strategies 
differ. The wide scope of the accompanying measures for the Sugar Protocol (AMSP), which 
encompasses competitiveness improvement of the sugar sector, diversification and addressing 
broader impacts5, has allowed eligible countries to combine and integrate different objectives 
into  their  individual  national  strategies.  The  AMSP  are  well  designed  to  meet  differentiated 
approaches  and  this  flexibility  needs  to  be  maintained.  Nevertheless,  given  the  political 
sensitivity of a restructuring reform of the sugar sector, some country strategies may need to 
be revised in order to guarantee their pertinence and viability. The AMSP will undergo a mid-
term review of the strategies in order to ensure this. 

Dialogue  on  Multi-Annual  Adaptation  Strategies  and  Multi-Annual  Indicative  Programmes 
(MIPs) with Council and Parliament has generally worked well.  

The “sui generis” nature of the AMSP in the DCI is an advantage as it allows for flexibility in 
terms  of  implementation  modalities.  Nevertheless,  the  required  annual  programming  and 
administrative  procedures  are  fairly  inflexible  and  can  lead  to  tensions  and  delays  when 
political  considerations  take  precedence.  Procedures  are  relatively  heavy  (the  DCI  requires 
individual  country  adaptation  strategies,  multiannual  programming  and  annual  action 
programmes  for  each  of  the  18  countries),  leading  to  certain  delays  and  late  signing  of 
financing  agreements  in  some  cases.  As  a  result,  although  all  the  multiannual  programming 
has been adopted, implementation in some countries has only started recently and measurable 
results are therefore not yet visible. 
Considering the importance of AMSP financing in several eligible countries6, full coherence 
with other cooperation and development funds (e.g. EDF) is necessary. Continued coherence 

5 

6 

Article 17(1) of the DCI: (a) enhancing the competitiveness of the sugar and cane sector, where this is a 
sustainable process, taking into account the situation of the different stakeholders in the chain; 
(b) promoting the economic diversification of sugar-dependent areas;   
(c) addressing broader impacts generated by the adaptation process, possibly related, but not restricted, 
to employment and social services, land use and environmental restoration, the energy sector, research 
and innovation and macroeconomic stability. 
In some countries the AMSP funds are a more important source of cooperation finance than the EDF. 

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will be ensured through the mid-term review of the strategies and new programming for 2011-
13.  As  a  basis  for  this  review,  an  external  assessment  of  the  AMSP  will  be  carried  out  in 
2009. 

AMSP is not suited as an instrument to respond to a crisis situation, but forms a temporary 
structural  cooperation  approach  with  long-term  objectives  to  assist  the  adjustment  of  an 
economic  sector  to  changing  market  circumstances.  As  such,  the  legislative  indicative 
allocation has been respected in the financial programming and is deemed adequate. 

1.2.5  Food security (FSTP) 

The objective and scope of the Food Security Thematic Programme are meant to address the 
main  food  security  issues.  The  programme  is  designed  to  be  complementary  with  other 
instruments and works at the thematic, continental, and global level. Consequently, global and 
continental  mechanisms  and  partnerships,  the  UN  and  other  international  organisations,  and 
international  civil  society  organisations  and  networks  are  the  main  implementing  partners, 
normally in co-financing modality.  

The multiannual strategy was adopted in April 2007. No major issues have been raised during 
the programming phase in the dialogue with the Council and Parliament. Special attention has 
been  given  to  maintaining  the  thematic  focus  of  this  instrument  to  fully  preserve  its 
comparative advantage. Complementarity with geographic instruments requires awareness on 
the part of Delegations and Geographic Desks of the nature, strategy, objectives, and expected 
results  of  the  thematic  programme,  and  consequently  more  active  involvement  in  its 
programming is necessary to avoid overlapping with geographical instruments. This risk does 
not depend on the instrument itself, but on its implementation, in particular at the level of the 
formulation of the annual action plans. This implies a strong effort in coordination among the 
different services involved in the preparation of those annual programmes, and can sometimes 
lead to delays in launching the procedure for its adoption in time.  

The  mid-term  review  of  the  strategy  will  be  the  opportunity  to  check  alignment  with  the 
recent adoption of the Food Facility7 and it will also serve the purpose of evaluating whether 
the  basic  aspects  which  are  key  to  food  security  such  as  nutrition,  access  to  food  and 
availability  of  food  (through  production,  markets)  and  price  stability  are  sufficiently 
considered  in  the  current  design  of  the  programme  or  whether  they  should  be  further 
mainstreamed in its second phase of programming for 2010-2013. 

The  mid-term  review  will  also  offer  the  opportunity  of  assessing  the  value  added  and 
complementarity  of  the  actions  launched  at  continental  and  regional  level  as  well  as  their 
contribution  to  food  security  and  to  the  global  food  security  agenda,  including  the  EU’s 
commitment to the Food Aid Convention. The Food Facility has triggered additional action in 
50  countries  in  the  short/medium  term  in  the  area  of  Food  Security.  The  Food  Facility 
Regulation requires that complementarity with existing instruments is ensured, including with 
the FSTP. This has proved to be a challenge when (re)programming EUR 50 million of the 
FSTP  AAP  2008  as  a  first  measure  to  address  the  Food  Prices  crisis,  with  actions  that  are 
sometimes of a similar nature to those financed under the Facility. As the prices are expected 
to remain high in the next years, the needs of those highly insecure and fragile countries will 
be maintained or even increased by the additional impact of the financial and economic crisis.  

In some cases there is a need to look at issues cutting across more thematic programmes (e.g. 
the case of biofuels, which cut across Food Security and Environment). Programmes need to 

7 

Regulation No 1337/2008 of 16 December 2008 (OJ L 354/62 of 31.12.2008). 

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have  flexibility  in  allocation  to  handle  these  situations  (e.g.  joint  programming  on  specific 
themes). This will be taken into account also in the next programming and strategy review.  

The implementation of the programme with multiple priorities and sub-priorities is somewhat 
challenging.  Pooling  resources  and  running  calls  for  proposals  that  draw  on  two-year  rather 
than one-year financing has been identified as a first solution 

The  next  multiannual  programming  should  avoid  being  too  prescriptive  as  regards  yearly 
allocations  and  implementation  modalities,  which  should  be  left  open  for  discussion  in  the 
context  of  the  annual  programming.  This  would  allow  for  as  much  flexibility  for 
implementation and resource efficiency as possible. 

As  regards  the  financial  envelope,  the  EUR  1.0  billion  made  available  under  the  new  Food 
Facility has provided additional funds to address food security at country level in the short to 
medium  term  (2008-2010).  As  a  result  the  envelope  is  currently  programmed  up  to  2013 
according to the legislative indicative allocation.  

1.2.6 

Investing in People (IIP) 

The  thematic  programme  “Investing  in  People”  pursues  a  broad  approach  to  development, 
poverty  reduction  and  social  cohesion.  Driven  by  the  ambition  to  help  the  EC’s  partner 
countries  to  achieve  the  Millennium  Development  Goals  (MDGs),  the  programme  supports 
action under four main pillars: (1) good health for all, (2) education, knowledge and skills, (3) 
gender  equality  and  (4)  other  aspects  of  human  and  social  development  (employment  and 
social cohesion, children, youth and culture). 

Under the health pillar, the implementation of the thematic programme has been focused on 
the human resources crisis in health-care systems; main poverty-related diseases (HIV/AIDS, 
malaria  and  tuberculosis);  neglected  or  emerging  diseases;  access  to  global  goods;  and 
improvement of sexual and reproductive health and rights. 

In  the  area  of  education,  knowledge  and  skills,  the  main  focus  has  been  on  promotion  of 
universal  access  to  quality  primary  education;  strengthening  of  the  quality  of  education  and 
improvement in access to vocational and skills training.  

The  gender  equality  pillar  has  focused  the  empowerment  of  women,  the  improvement  of 
literacy  among  adult  women  as  well  as  capacity  building  of  civil  society  organisations, 
including specifically in the ENPI countries. Addressing gender concerns and issues has also 
been  part  of  all  the  other  components  of  the  programme.  In  terms  of  implementation,  the 
limited  absorption  capacity  of  civil  society  in  ENPI  countries  has  been  emphasised  by  the 
Commission services both at Headquarters and in Delegations.  

Under  the  other  aspects  of  human  and  social  development,  the  implementation  of  the 
programme  has  been  focusing  on  advancement  of  employment,  decent  work  and  social 
cohesion in the EC’s partner countries; strengthening of children’s rights and participation in 
development; and support for activities to protect and promote cultural diversity.  

In terms of financing, the implementation has been guided by the multiannual strategy which 
indicates that 55% of the total envelope of EUR 1.060 billion available in 2007-2013 should 
be  allocated  to  the  area  of  health,  12%  to  education,  5%  to  gender  equality,  21%  to  other 
aspects of human and social development, and the rest to contingency. 

The multiannual strategy was adopted in May 2007. No critical issues were raised during the 
democratic scrutiny and comitology process. There have been no significant difficulties in the 
implementation  of  the  programme.  Annual  Action  Programmes  (AAPs)  were  adopted  in 
December 2007, August 2008 and the 2009 AAP is foreseen to be adopted in early May 2009, 

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thus catching up delays, due to late approval of the strategy, and speeding up implementation. 
The programme has been implemented through calls for proposals and direct agreements with 
international  or  other  organisations.  In  2008  and  2009  calls  for  proposals  represented 
respectively  60%  and  85%  of  the  yearly  budgets  (excluding  the  contribution  to  the  Global 
Health Fund). Calls for proposals enable the programme to strengthen civil society capacity 
and  build  on  local  expertise  so  as  to  raise  awareness  on  human  and  social  issues,  develop 
methodologies  and  innovative  projects,  promote  stakeholder  dialogue  and  partnerships  and 
pool knowledge and experience, thus complementing what is done at the bilateral level with 
governments. On the other hand, direct agreements with international or other organisations 
form part of the strategic added value of the thematic programme, as a unique way to support 
major international programmes and build joint initiatives so as to address policy issues and 
develop appropriate response at a global level.  

Four  calls  for  proposals  were  launched  between  2007  and  2008,  and  11  more  calls  will  be 
launched  during  2009.  The  implementation  of  the  programme  with  multiple  themes, 
objectives  and  calls  is  a  challenge.  The  lessons  learned  in  implementation  so  far  show  that 
resources available for some objectives on annual basis are often too low to be able to finance 
a critical  mass  of  proposals. Pooling resources and running calls for proposals that draw on 
multi-year  rather  than  one-year  financing  has  been  identified  as  a  solution  and  has  been 
applied for some 2007-2008 AAP calls and will be applied for most of 2009-2010 AAP calls.  

In order to allow for efficient and most effective use of resources it is therefore advisable that 
the next multiannual programming does not pre-determine in which year a specific objective 
should be implemented and leaves the decision concerning the sequencing of implementation 
to  the  annual  programming  process.  Likewise,  the  use  of  implementation  modalities  best 
suited to achieve individual objectives should be left open for discussion in the context of the 
annual programming. 

1.3 

Conclusion on the DCI Regulation 

As regards the scope and objectives, the DCI regulation has proven to be an instrument able to 
respond  to  the  objectives  set  in  terms  of  coherence,  flexibility,  and  effectiveness.  The  first 
wave of strategy papers and the first three years of AAPs have been established on the basis 
of  donor  coordination,  dialogue  with  partner  countries  and  participation  by  civil  society. 
Besides the need to cover non-ODA activities under another legislative instrument, no major 
issues have emerged — except the need to align the flexibility on tax and duties with the other 
instruments — and it is expected that implementation will continue smoothly.  

As  regards  the  financial  envelope,  based  on  the  final  budgets  2007  and  2008,  and  the  2009 
Budget  —  that  is  the  first  3  years  —  the  financial  allocation  has  exceeded  the  reference 
amount of EUR 16 897 million by EUR 239 million, i.e. by + 1.4%. Most of this deviation 
stems  from  the  environment  and  energy  thematic  programme  (+  EUR  176  million)  with  a 
+22% deviation as regards the sub-allocated envelope to tackle international challenges linked 
to climate change. Much of the rest of the reinforcements was allocated to the geographical 
programmes  by  the  Budget  Authority  (+  EUR  60  million).  The  needs  for  the  food  security 
programme will have to be closely monitored as regards food price increases and/or volatility. 
The evolution and the impact of the food facility Regulation will be also monitored. There is 
no need to modify the DCI reference amount taking into account the 5% flexibility foreseen in 
the Interinstitutional Agreement. 

Further to this review of the DCI, it is proposed: 

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1)  to  give  a  legislative  follow-up  to  the  Preparatory  Actions  for  non-ODA  activities  in 
developing countries falling under the DCI Regulation. 

2) to proceed with a technical amendment of the DCI Regulation to harmonise Article 25(2) 
on  taxes  and  duties  with  the  other  instruments  in  order  to  allow  in  exceptional  and  duly 
justified  cases  the  payment  of  taxes  and  duties  as  follows:  “Community  assistance  shall,  in 
principle, not be used for paying taxes, duties or charges in beneficiary countries.” 

2. 

EUROPEAN NEIGHBOURHOOD AND PARTNERSHIP INSTRUMENT (ENPI) 

The ENPI aims specifically at developing an area of prosperity and friendly neighbourliness 
involving  the  European  Union  and  seventeen8  neighbouring  partner  countries.  Cooperation 
under  the  ENPI  goes  beyond  promoting  sustainable  development  and  economic  growth.  It 
involves  substantial  support  for  measures  aimed  at  a  progressive  economic  integration  with 
the EU, deeper political cooperation, involving approximation to EU policies and legislation, 
institution building, participation in Community programmes and agencies, inter-connections 
and development of common infrastructure.  

2.1 

Delivery against the declared objectives 

The ENPI has been conceived as a “policy driven” financial instrument  that operates in  the 
framework  of  the  existing  bilateral  agreements  between  the  EU  and  its  neighbouring 
countries.  It  has  been  specifically  designed  to  support  the  implementation  of  the  European 
Neighbourhood Policy (ENP) and in particular of the bilateral ENP Action Plans concluded 
by  the  EU  and  twelve  partner  countries9.  For  Russia,  our  cooperation  takes  place  in  the 
context of the EU-Russia “Strategic Partnership” and is aiming to support the implementation 
of the road-maps for the four common spaces. The instrument also supports complementary 
regional initiatives, such as the Union for the Mediterranean, the Black Sea synergy, and the 
Eastern Partnership. 

Country  Strategy  Papers  (CSPs)  covering  the  period  2007-13  accompanied  by  indicative 
programmes for the period 2007-10 have been adopted for 15 out of 17 countries. No strategy 
papers have been adopted for Libya, because of the absence of a contractual relation, or for 
the  Occupied  Palestinian  Territory,  because  of  the  protracted  crisis.  Four  other  Strategy 
Papers and Indicative programmes were adopted covering Regional Cooperation in the East, 
Regional  Cooperation  in  the  Mediterranean,  Inter-regional  activities  and  the  Cross-Border 
Cooperation component. In 2009-10, these Strategy Papers will undergo a mid-term review, 
as foreseen in the Regulation, and new indicative programmes covering the period 2011-2013 
will be adopted.  

These  programming  documents  drafted  on  the  basis  of  the  ENPI  Regulation  are  geared 
towards supporting the implementation of ENP  action plans. Their  scope and budget reflect 
the  breadth  and  ambition  of  the  partnership  between  the  EU  and  the  country  concerned.  To 
that  effect,  all  the  Strategy  Papers  and  Multi-annual  Indicative  Programmes  (MIPs)  include 
priorities and measures addressing, depending on the specific country situations, democratic 
and  economic  governance,  regulatory  reform  and  administrative  capacity  building.  In 

8 

9 

Algeria,  Armenia,  Azerbaijan,  Belarus,  Egypt,  Georgia,  Israel,  Jordan,  Lebanon,  Libya,  Moldova, 
Morocco,  Palestinian  Authority  of  the  West  Bank  and  Gaza  Strip,  Russian  Federation,  Syria,  Tunisia 
and Ukraine. 
Armenia,  Azerbaijan,  Egypt,  Georgia,  Israel,  Jordan,  Lebanon,  Moldova,  Morocco,  Palestinian 
Authority of the West Bank and Gaza Strip, Tunisia and Ukraine. 

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countries without an agreed ENP Action Plan (e.g. Algeria, Belarus, Libya, Syria), the ENPI 
framework has been flexible enough to allow cooperation to be pursued on the basis of EU 
objectives. 

Through its multi-country programmes, the ENPI has been able to finance flagship initiatives 
such as university cooperation (TEMPUS), student exchanges (Erasmus Mundus), short-term 
expertise from Member States’ administrations (TAIEX), and medium-term public expertise 
from  peer  practitioners  (SIGMA),  and  a  facility  to  foster  investment  (the  Neighbourhood 
Investment  Facility)  has  been  created.  In  addition,  the  regional  dimension  of  relations  with 
neighbouring countries has been addressed through dedicated programmes (such as the one in 
support  of  the  Euro-Mediterranean  Partnership)  or  in  the  context  of  existing  programmes 
(Black  Sea  Synergy,  Eastern  partnership).  The  ENPI  has  also  been  an  important  element  of 
our cooperation with Russia which benefits, inter alia, from TEMPUS, Erasmus Mundus and 
TAIEX.  

A specific and innovative feature of the instrument is its cross-border cooperation component. 
This  component  combines  objectives  deriving  from  external  policy  and  from  economic  and 
social  cohesion  and  brings  a  radical  simplification  in  procedures  and  substantial  gains  in 
efficiency.  It  operates  based  on  principles  such  as  multiannual  programming,  shared 
management,  partnership  and  co-financing.  It  draws  on  resources  from  ENPI  and  from  the 
European Regional Development Fund.  

ENPI Cross-border Cooperation (CBC) around the Mediterranean Sea basin 

The  Mediterranean  Sea  Basin  programme  was  one  of  the  first  CBC  programmes  to  be 
adopted  by  the  Commission  (in  August  2008)  and  the  first  to  organise  a  Joint  Monitoring 
Committee  meeting  in  November  2008.  The  programme  has  been  allocated  EUR  173.6 
million  and  all  NUTS  II  regions  (and  their  equivalents  in  partner  countries)  located  on  the 
coasts of the Mediterranean Basin are eligible. All countries around the Mediterranean Sea 
are invited to take part in the programme and the vast majority of them are active in it. The 
participants  jointly  identified  and  agreed  4  programme  priorities:  promotion  of  socio-
economic  development  and  enhancement  of  eligible  territories,  promotion  of  environmental 
sustainability  at  the  sea  basin  level,  promotion  of  better  conditions  and  modalities  for 
ensuring the mobility of persons, goods and capital in the region and promotion of cultural 
dialogue and local governance. All priorities are broken down into more detailed measures.  

Following  the  second  JMC  meeting  in  January  2009,  the  programme  is  currently  finalising 
the application pack for its first call for proposals in March 2009. The call will be launched 
for  a  value  of  EUR  32  million  and  will  concern  standard  projects  in  the  four  programme 
priorities.  The  evaluation  of  the  standard  projects  and  first  signature  of  contacts  will  take 
place  in  the  second  half  of  2009.  Another  call  concerning  larger  strategic  projects  is 
scheduled for June.  

2.2 

Implementation issues 

The  ENPI  has  at  its  disposal  a  much  broader  range  of  instruments  than  its  predecessors 
MEDA and TACIS and this allows for a more effective and efficient delivery of assistance.  

Through  mechanisms  such  as  twinning  and  TAIEX,  the  Community  makes  available  EU 
public  sector  expertise  for  institution  building  to  partner  countries  engaged  in  legislative 
approximation  and  regulatory  alignment.  Sector  and  Budget  Support  Operations  are  used  to 
promote the reform agenda agreed in the context of the ENP Action Plans and the monitoring 
of  such  operations  is  an  important  occasion  for  a  deeper  policy  dialogue  with  partner 
countries. 

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Twinning, TAIEX and SIGMA in neighbouring countries 

Institution building in neighbouring countries is provided mainly through three instruments: 
TAIEX, providing for short-term expertise from Member States Administration;  

SIGMA, providing for medium-term public expertise from peer practitioners; and 

Institutional twinning, providing for long-term “peer to peer” partnerships between a Public 
Administration from a Member State and from a partner country.  

These instruments are very much welcomed by the ENPI countries. 

The 100th ENP Institutional Twinning project will be launched in 2009 with a total pipeline 
under identification of around 180 partnerships. This shows that Institutional Twinning has 
been set as a priority by ENP countries in the framework of their cooperation with the EU. 
TAIEX operations have grown in number since their introduction in 2006 and the instrument 
is  used  now  by  all  ENPI  countries  (except  for  Libya  and  Syria)  having  reached  a  rate  of 
around 4 000 participants. The TAIEX instrument has proved to be useful to pave the way for 
the introduction of the Institutional Twinning instrument as well as SIGMA operations. The 
introduction  of  SIGMA  will  allow  human  resources  to  be  strengthened  within  the  public 
administrations  and 
for  Institutional  Twinning  projects  more 
appropriately  designed  in  terms  of  ownership  and  sustainability,  reinforcing  economic 
integration and political cooperation between the EU and ENPI countries. 

thus  pave 

the  way 

A successful Sector Budget Support operation — The programme for consolidation and 
deepening of Public Service Reform in Morocco 

This  programme  aims  to  consolidate  and  deepen  the  public  service  reform  that  the 
Commission  started  to  support  under  MEDA  (programme  PARAP  I).  It  accompanies  the 
transition from a pilot operational phase to general implementation in the Moroccan public 
service. 

The  re-shaping  of  the  organic  Finance  Law  of  1998,  the  progressive  adoption  of  forward-
looking  management  of  posts  and  skills,  the  strengthening  of  administrative  and  budgetary 
devolution,  and  the  strengthening  of  management  capabilities  in  the  field  of  public 
procurement are among the main objectives. This involves the understanding and use of new 
concepts  in  budgetary  and  human  resources  management  by  the  Moroccan  administration 
and  the  implementation  of  new  practices.  Past,  and  more  recent,  experience  in  certain 
OECD countries having undertaken similar reforms has shown the complexity of processes 
that may last over a decade. Hence, it was important that the EC continue to accompany the 
reform under this second consolidation programme. 

ENPI assistance is also being used to leverage loans from development finance institutions to 
finance infrastructure investment projects and to support the private sector through loans and 
risk  capital  operations.  This  is  done  with  the  EIB  in  the  context  of  the  Facility  for  Euro-
Mediterranean  Investment  and  Partnership  (FEMIP)  and  with  the  EIB,  EBRD  and  other 
European  development  finance  institutions  in  the  context  of  the  newly  established 
Neighbourhood  Investment  Facility  (NIF).  However  the  regulation  does  not  unambiguously 
provide  the  possibility  of  establishing  “revolving  funds”.  Such  funds  are  an  essential  tool 
when  it  comes  to  supporting  the  private  sector  and  SME  development,  which  are  key 

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priorities  of  the  action  of  the  European  Union  in  the  Mediterranean  partner  countries.  The 
possibility  to  use  the  reflows  from  such  operations  would  provide  additional  resources  to 
FEMIP  and  NIF.  This  restriction  is  already  problematic  in  relation  to  ongoing  operations 
under FEMIP, and the problem will grow for future operations under the NIF. For this reason 
the  Commission  has  tabled  a  legislative  proposal10  aimed  at  amending  Article  23  of  the 
Regulation.  

The Neighbourhood Investment Facility 

Principally  focussed  on  infrastructure,  the  Neighbourhood  Investment  Facility  (NIF) 
combines EU grants (with the Commission’s commitment to contribute with a total amount of 
EUR  700  million  for  the  period  2007-2013)  with  loans  from  consortia  of  eligible  European 
Finance  Institutions.  Member  States  can  participate  through  voluntary  direct  contributions 
which are pooled in a Trust Fund managed by the EIB. So far, EUR 37 million of additional 
contributions have been pledged for the period 2008-2010. 

The  objective  of  the  NIF  is  to  leverage  loan  financing  for  large  investment  projects  in  the 
energy,  transport,  and  environmental  sectors.  It  also  supports  projects  in  the  social  sector 
and the promotion of the private sector development. In 2008, the NIF funded, for example, 
projects  like  the  renovation  of  a  hospital  in  the  Republic  of  Moldova,  the  building  of 
facilitating 
renewable  energy  power  plants 
communication and trade in the Republic of Moldova and in rural areas of Morocco, and the 
construction  of  transmission  lines  in  Georgia  improving  energy  interconnectivity  and 
security.  

the  rehabilitation  of  roads 

in  Egypt, 

The  ENPI  Regulation  also  includes  specific  provisions  allowing  the  Commission  to  receive 
and  manage  funds  on  behalf  of  the  Member  States  through  the  Community  budget.  This 
mechanism  has  been  used  by  Austria  for  the  PEGASE  (Palestino-Européen  Gestion  de 
l’Assistance  Socio-Economique)  mechanism with  a  EUR  1  million  contribution  through  the 
Community  budget  in  2008.  Over  the  course  of  the  year  PEGASE  also  managed  direct 
bilateral contributions for EUR 130 million of funds from 13 Member States in addition to the 
Community budget contribution. These funds were used to support the recurrent expenditure 
of the Palestinian Authority. 

The  ENPI  cross-border  cooperation  component  has  been  launched.  By  the  end  of  2008  the 
Commission  had  adopted  thirteen  out  of  the  fifteen  planned  programmes11.  Russia  has 
expressed  much  interest  in  participating  in  the  seven  cross-border  cooperation  programmes 
and has promised to provide substantial co-financing to these programmes12.  

2.3 

Delivery against the commitments undertaken 

In the Declaration on democratic scrutiny and coherence of external actions the Commission 
undertook  to  have  a  regular  dialogue  with  the  European  Parliament  on  the  Strategy  Papers. 
For the ENPI this was done in December 2006 before the Strategy Papers received a formal 
opinion by the ENPI Committee and were adopted by the Commission. A second meeting was 

10 
11 

12 

COM(2008) 308 of 21.5.2008. 
Spain and Morocco did not present the joint programming document for their two programmes by mid-
2008.  As  a  result,  the  2008  allocation  for  Spain  under  this  programme  was  returned  to  the  European 
Regional  Development  Fund.  Spain  and  Morocco  may  still  present  a  joint  programme  to  the 
Commission until June 2010. 
As Russia has regrettably chosen not to sign the relevant Financing Agreement, it is for the time being 
not  participating  in  the  Baltic  Sea  Regional  CBC  Programme  which  has  caused  difficulties  for  its 
implementation. 

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held in November 2007 to discuss, inter alia, the revision of the Strategy Paper for the Inter-
regional Programme leading to the introduction of the NIF. 

In the run-up to the European Council of the December 2005, the Commission expressed its 
intention to devote up to 3% of the funding for our neighbours to areas concerning or related 
to migration. This would correspond to approximately EUR 350 million for the period 2007-
2013. To that effect an estimated EUR 90 million was allocated to migration-related measures 
under the ENPI country, multi-country and cross-border cooperation programmes in 2007 and 
2008.  This  is  complemented  by  the  allocations  under  the  DCI  thematic  programme  for 
Migration  and  Asylum,  where  amounts  of  EUR  19.6  million  were  allocated  to  the  Eastern 
migratory route and EUR 27.6 million to the Southern migratory route comprising ENPI and 
ACP countries. Over the period 2007-2010 some 50% of the global allocation provided under 
the migration thematic programme is set to benefit ENPI countries. On that basis it should be 
possible to fully meet the 3% objective. 

ENPI  countries  also  benefit  from  the  thematic  programmes  established  under  the 
Development Cooperation Instrument (DCI). Within the DCI financial envelope an indicative 
amount  of  EUR  465  million  has  been  set  aside  for  neighbouring  countries  over  the  period 
2007-13.  To  that  effect  EUR  70  million  was  committed  in  2007-8  and  EUR  105  million  is 
planned for 2009-10. It is expected that by the end of 2013 the full amount will be used. 

2.4 

Adequacy of the financial envelopes and financial provisions 

The ENPI financial envelope for the period 2007-13 is EUR 11 181 million. It is expected that 
by the end of 2009 commitments will reach 43.5% of the envelope. This is significantly above 
the  level  of  38.3%  foreseen  in  the  original  Commission  financial  programming  and  reflects 
the  need  to  address  the  situation  of  the  occupied  Palestinian  territories.  In  view  of  that,  the 
budgetary authority has agreed each year to supplement the programmed resources with funds 
coming from various sources.  

Article  29  of  the  ENPI  Regulation  states  that  up  to  5%  of  the  funds  should  be  allocated  to 
cross-border cooperation programmes over the period 2007-13. For the period 2007-2010 it is 
expected that commitments for CBC programmes will remain significantly below this limit, 
reflecting  the  slow  start  of  this  new  type  of  cooperation  and  the  late  adoption  of  the 
programmes.  However,  13  out  of  the  15  programmes  have  now  been  adopted  and  it  is 
expected  that  implementation  will  start  in  2009.  This  will  lead  to  increased  absorption  over 
time to reach, by 2013, a level close to what was anticipated.  

Point 37 of the Interinstitutional Agreement (IIA) on budgetary discipline and sound financial 
management allows the limit of 5% of the co-decided financial envelope to be exceeded only 
when “new, objective, long term circumstances arise for which explicit and precise reasons 
are given”. The Commission considers that the events in the occupied Palestinian territories 
and  in  Georgia  do  correspond  to  these  circumstances.  Based  on  the  final  2007  and  2008 
budgets,  and  the  2009  Budget,  it  appears  that  the  reference  amount  of  EUR  11 181  million 
will be exceeded by more than 5% at the end of the period. The deviation (+ EUR 671 million 
including 2009 Budget) is exclusively due to the situations in Palestine and in Georgia which 
have given rise to successive increases above the programmed amount of the ENPI envelope. 
Some EUR 623 million additional to the ENPI envelope has been mobilised for Palestine and 
some  EUR  48  million  in  2008  for  the  Georgia  crisis.  The  Commission  considers  that  these 
provisions  of  the  IIA  apply  for  the  ENPI  envelope  because  the  events  in  the  occupied 
Palestinian  territory  and  in  Georgia  correspond  to  an  objective  and  long-term  situation  with 
explicit and precise reasons provided to justify the reinforcements which have been approved 
by the budget authority. Thus there is no necessity to modify the co-decided reference amount 

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even  when  taking  into  account  the  additional  EUR  350  million  proposed  for  the  Eastern 
Partnership.  

2.5 

Conclusion on the ENPI Regulation 

On  the  whole,  the  ENPI  has  gone  a  long  way  towards  addressing  its  declared  objectives. 
Programming  documents  have  become  more  geared  towards  supporting  the  implementation 
of ENP action plans, their scope reflects the breadth of the partnerships between the EU and 
the  partner  countries,  and  their  budget  reflects  the  “ambition”  of  such  partnerships.  Multi-
country  programmes  have  been  instrumental  in  supporting  ENP  flagship  initiatives  and  the 
policy regional dimensions. Its cross-border cooperation component has been launched.  

Through implementation mechanisms such as twinning and TAIEX support is being provided 
for  institution  building,  legislative  approximation  and  regulatory  alignment.  Sector  and 
Budget  Support  Operations  are  instrumental  to  promote  the  reform  agenda  agreed  in  the 
context  of  the  ENP  Action  Plans.  However  the  fact  that  the  regulation  does  not 
unambiguously provide the possibility of establishing “revolving funds” is a problem when it 
comes to supporting the private sector and SME development under FEMIP of NIF.  

The Commission undertook to enter into a democratic scrutiny dialogue with the Parliament 
on  the  draft  Strategy  Papers.  This  was  done  twice  in  December  2006  and  November  2007. 
The  Commission  has  also  programmed  funds  with  the  view  of  devoting  up  to  3%  of  the 
funding for our neighbours to areas concerning or related to migration.  

The  financial  envelope  is  tight.  Sustaining  planned  commitments  to  support  reform  in  ENP 
countries  and  supporting  new  and  ambitious  regional  initiatives  while  simultaneously 
responding to “protracted” crisis situations will remain a challenge. 

The  provisions  of  the  ENPI  Regulation  appear  adequate  to  sustain  cooperation  with 
neighbouring  countries  provided  that  two  issues  are  addressed.  The  first  concerns  the 
possibility  of  establishing  revolving  funds,  the  lack  of  which  severely  hampers  the  Union’s 
ability  to  support  private  sector  operations.  An  amendment  to  Article  23  of  the  ENPI 
Regulation has already been tabled by the Commission and it is currently being discussed by 
the legislator. The second concerns the financial needs linked to “protracted” crisis situations 
such as in the occupied Palestinian territories or in Georgia. For this to be addressed it may 
become necessary to rely on the flexibility mechanisms provided in the IIA.  

3. 

INSTRUMENT FOR PRE-ACCESSION ASSISTANCE (IPA)13 

The  Instrument  for  Pre-accession  Assistance  (IPA)  replaces  the  former  pre-accession 
instruments  PHARE,  ISPA,  and  SAPARD,  the  Turkish  pre-accession  instrument  and  the 
financial instrument for the Western Balkans CARDS.  
The primary objective of IPA is to assist candidates and potential candidates14 in the process 
of  progressive  alignment  with  the  standards  and  policies  of  the  European  Union  in  order  to 
become EU members once they fulfil the necessary conditions. That overall primary objective 

13 

14 

This review draws mainly on operational experience and partly on the 2 evaluations so far carried out in 
respect of  IPA:  (i)  Review of  Multi–annual  Indicative Planning  Documents’ process  (Dec. 2008)  and 
(ii) Review of Donor Coordination in Turkey, Croatia, the former Yugoslav Republic of Macedonia and 
Albania (final report under finalisation). 
Current  candidates  are:  Croatia,  the  former  Yugoslav  Republic  of  Macedonia  and  Turkey.  Current 
potential candidates are: Albania, Bosnia and Herzegovina, Montenegro, and Serbia, plus Kosovo under 
UNSC Resolution 1244/99. 

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encompasses  a  number  of  secondary  objectives  —  including  the  objective  to  establish 
structures  in  the  countries  concerned  which  (i)  are  effective  in  delivering  sound  financial 
management  and  (ii)  will  foreshadow  the  structures  they  will  have  to  put  in  place  for 
managing post–accession instruments (e.g. Structural Funds). 

Planning and programming of the assistance is provided in accordance with the general policy 
framework for pre-accession defined in the European and Accession Partnerships, and taking 
due  account  of  the  annual  Enlargement  Strategy  and  Progress  Reports  issued  by  the 
Commission. 

IPA streamlines all pre–accession assistance within a single framework. However, in order to 
address  each  country’s  challenges  in  the  most  effective  way,  IPA  consists  of  five  different 
components which deliver tailor-made assistance in accordance to the needs assessment and 
findings in the annual Progress Reports.  

The  first  two  IPA  components,  “Transition  assistance  and  institution  building”  (TAIB)  and 
“Cross–border cooperation” (CBC) apply to both candidates and potential candidates.  

The TAIB component aims at strengthening democratic institutions, promotion and protection 
of  human  rights  and  fundamental  freedoms,  economic  reforms,  social  inclusion,  and,  in 
general, providing assistance for progressive alignment with, or adoption and implementation 
of, the acquis communautaire.  

Typically,  the  assistance  is  provided  through  training,  technical  assistance,  investment  in 
regulatory  infrastructure,  budgetary  support  etc.  However,  in  potential  candidates  the  TAIB 
component  is  also  used  to  undertake  projects  which  would  otherwise  fall,  in  candidate 
countries, under components III, IV and V, e.g. investment-type operations. 

Assistance  from  EU  Member  States  officials  and  experts  is  also  provided  through  the 
twinning instruments, TAIEX and SIGMA.  

The  CBC  component  has  two  primary  strands:  cross-border  cooperation  a)  among  IPA 
beneficiary countries and b) between them and adjacent Member States. On top of promoting 
sustainable economic and social development in border areas, cross–border cooperation helps 
reconciliation  and  good  neighbourly  relations,  while  also  facilitating  the  integration  of  the 
enlargement  countries  into  the  EU.  This  is  particularly  relevant  in  the  Western  Balkans,  a 
region  with  a  recent  history  of  conflict.  Secondarily,  the  CBC  component  also  finances  the 
participation of candidates and potential candidates in transnational cooperation programmes 
with  Member  States  under  the  Structural  Funds’  Territorial  Cooperation  objective  and  the 
participation  of  Turkey  in  the  ENPI  Black  Sea  basin  cooperation  programme  with  Member 
States and ENP countries. 

IPA components III, IV and V apply to candidate countries only. They aim at preparing these 
countries for the implementation of Structural, Cohesion and Rural Development Funds upon 
accession  through  a  “learning  by  doing”  process.  This  requires  the  countries  to  have  the 
necessary structures and administrative capacity to manage the assistance.  

Component III, Regional Development, is the precursor of the ERDF and the Cohesion Fund. 
It finances investments and associated technical assistance in areas such as transport and the 
environment as well as economic and social cohesion. 

Human Resources Development (component IV) is the precursor of the European Social Fund 
(ESF). It supports employment, social inclusion of disadvantaged people and human capital. 

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Component V, Rural development, contributes to the sustainable adaptation of the agricultural 
sector  and  rural  areas  and  to  the  candidate  countries’  preparation  for  the  implementation  of 
the acquis communautaire concerning the Common Agricultural Policy and related policies.  

3.1 

Delivery against the declared objectives 

Despite  some  delays  due  to  the  late  approval  of  the  legal  base,  IPA  planning  and 
programming in the years 2007 and 2008 largely took place in a smooth and effective way. 
The first generation of Multiannual Indicative Planning Documents (MIPDs) 2007−2009 was 
adopted  by  the  Commission  in  the  first  half  of  2007.  In  accordance  with  the  priority  for 
assistance  indicated  in  the  MIPDs,  annual  or  multiannual  programmes  −  according  to  the 
respective  components  −  were  adopted  towards  the  end  of  2007  and  in  early  2008.  The 
evaluation  of  the  MIPD  process  made  some  recommendations  for  improving  the  processes, 
e.g. reinforcing the internal procedure for reviewing the MIPD, improving the quality of the 
consolidated  needs  assessments  and  reducing  the  scale  of  the  review  undertaken  for  the 
middle year of the three. 

Implementation  of  IPA  programmes  only  started  in  the  course  of  2008.  In  most  cases 
individual contracts only started to be signed by later 2008 or early 2009, so it is too early to 
make  judgments  about  the  results  of  these  programmes.  However,  the  objective  of 
establishing  the  appropriate  structures  within  the  countries  is  being  progressively  achieved. 
National  authorities  responsible  for  IPA  programming  and  implementation  have  been 
designated  in  all  cases.  They  are  responsible  for  inter−ministerial  coordination  required  for 
setting up IPA programmes. Moreover, candidate countries in particular have been very busy 
setting  up  the  management  and  control  systems  required  for  the  implementation  of  IPA 
assistance in a decentralised manner.  

In  2008,  MIPDs  have  been  reviewed  for  the  horizon  2008−2010  in  the  light  of  the  2007 
enlargement strategy paper and regular reports, which provide for greater focus to be given at 
an  early  stage  to  the  rule  of  law  and  good  governance.  The  adoption  of  the  revised  MIPDs 
was followed, in the second half of 2008, by the 2008 annual programmes, in particular the 
national and multi−beneficiary programmes under the TAIB component. 

In  order  to  increase  the  leverage  of  IPA  support  in  the  area  of  economic  and  social 
development,  the  initiative  has  been  taken  to  coordinate  IPA  support  with  that  of  the 
International Financial Institutions (IFIs) and other donors. An Infrastructure Projects Facility 
has  been  launched  with  the  EIB,  the  EBRD  and  the  Council  of  Europe  Development  Bank 
(CEB).  It  constitutes  an  important  move  towards  establishing  a  Western  Balkan  Investment 
Framework  by  2010.  Other  initiatives  included  an  energy  efficiency  facility  as  well  as  a 
regional  instrument  for  SME  development:  the European  Fund  for  South  East  Europe.  This 
benefits tens of thousands of small businesses across the region. 

Special  attention  has  been  given  to  people-to-people  contacts.  Visa  facilitation  and 
readmission  agreements  entered  into  force  with  all  countries  concerned  in  January  2008. 
Measures  aimed  at  increasing  people-to-people  contacts  also  include  more  mobility 
opportunities for undergraduate and graduate students under the Erasmus Mundus programme 
and  additional  funds  for  youth  exchanges  and  partnership  under  the  Youth  in  Action 
programme. The Tempus programme continued to provide support to higher education reform 
through partnerships between universities. 

Important efforts have been made to provide support for regional cooperation initiatives. The 
newly  established  Regional  Cooperation  Council  (RCC)  is  operational.  It  now  faces  the 
challenge of ensuring the efficiency of regional activities and their further streamlining. IPA 

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provides  assistance  to  the  secretariat  of  the  RCC,  the  Regional  School  of  Public 
Administration  to  be  set  up  in  Danilovgrad  (Montenegro),  a  new  disaster  risk  reduction 
initiative,  as  well  as  cultural  heritage  rehabilitation  and  history  textbooks  projects.  IPA  also 
supports cooperation in trade matters through the CEFTA Secretariat. 

Support under the Civil Society Facility 

Increased  participation  by  civil  society  organisations  in  the  reforms  undertaken  in  the 
enlargement  countries  is  a  strong  determinant  of  the  pace  and  quality  of  the  accession 
process, and of public support for accession.  

The  Commission  set  up  a  new  financing  facility  under  IPA  to  promote  civil  society 
development and dialogue. Support under the Civil Society Facility for 2008 amounts to some 
€30  million,  geared  towards  capacity  building  at  local  level.  The  Commission  organised  a 
major conference on civil society development in Southeast Europe in April 2008 to stimulate 
networking, exchange best practice and build partnerships. 

Under  the  Facility,  further  capacity  building  and  networking  projects  will  be  funded, 
including a ‘People–to-people’ visitor programme, the setting up in the first half of 2009 of 
technical support offices in each country, and support schemes for civic partnerships in areas 
such  as  environment,  energy  efficiency,  health  and  safety  at  work,  and  the  fight  against 
corruption, organised crime and trafficking. Under IPA 2009 support schemes to civil society 
partnerships  will  give  priority  to  sectors  such  as  culture,  minorities  and  business 
associations. 

3.2 

Implementation issues  

The  TAIB  component  is  implemented  through  eight  annual  programmes  −  one  per 
candidate/potential  candidate  −  and  a  number  of  annual  multi−beneficiary  programmes 
covering some or all enlargement countries.  

The CBC  component is implemented through eight multi–annual (2007–2009) cross−border 
programmes between Western Balkans countries15 and ten multi–annual programmes between 
them and adjacent EU Member States16. 

IPA Cross-border Cooperation 

The  IPA  CBC  component  has  been  designed  to  mirror  as  much  as  possible  the  Territorial 
Cooperation  objective  of  the  EU  Structural  Funds  with  the  aim  of  preparing  beneficiary 
countries  for  its  implementation  upon  accession.  Concerning  cross-border  cooperation 
between EU Member States and IPA beneficiary countries, IPA has radically simplified the 
programming  and  implementation.  It  now  takes  place  under  a  single  set  of  rules  (the  IPA 
regulations applying on both side of the border), a single budget (where IPA funds are pooled 
with  funds  from  the  ERDF)  and  under  the  responsibility  of  a  single  managing  authority 
located  in  one  of  the  participating  EU  Member  States  (shared  management).  Ten 

15 

16 

Croatia–Serbia,  Croatia–Bosnia  and  Herzegovina,  Croatia–Montenegro,  Serbia–Bosnia  and 
Herzegovina,  Serbia–Montenegro,  Bosnia  and  Herzegovina–Montenegro,  Montenegro–Albania, 
Albania–the former Yugoslav Republic of Macedonia. 
Croatia–Slovenia,  Croatia–Hungary,  Serbia–Hungary,  Serbia–Romania,  Serbia–Bulgaria,  the  former 
Yugoslav  Republic  of  Macedonia–Bulgaria,  the  former  Yugoslav  Republic  of  Macedonia–Greece, 
Turkey–Bulgaria,  Albania-Greece  and  the  IPA  CBC  Adriatic  programme  (Croatia,  Bosnia  and 
Herzegovina,  Montenegro,  Albania  and  Serbia,  the  latter  in  phasing–out,  and  Slovenia,  Italy  and 
Greece). 

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cross−border cooperation multiannual (2007−09) programmes between beneficiary countries 
and neighbouring Member States have been adopted so far. Nine are bilateral and the tenth is 
multilateral,  covering  the  costal  areas  along  the  Adriatic  of  three  Member  States  and  four 
Western  Balkan  countries.  At  the  two  remaining  borders  between  Turkey  and  adjacent 
Member  States  (Cyprus−Turkey  and  Greece−Turkey),  the  conditions  for  CBC  programmes 
have not been met yet. 

At  borders  between  candidates/potential  candidates  (i.e.  intra−Western  Balkan  borders), 
eight bilateral CBC programmes had been prepared by national authorities and adopted by 
the Commission by December 2007. This is a remarkable result considering the recent history 
of the region. 

The Regional Development component is implemented in Croatia and Turkey through three 
national  multiannual  (2007−2009)  operational  programmes  (environment,  transport  and 
regional competitiveness). In the former Yugoslav Republic of Macedonia this component is 
implemented  through  one  national  multiannual  programme  concerning  investments  in 
environment and transport. In  a  future revision  this  programme  may  be  extended  to  include 
regional competitiveness.  

the  Rural  Development  components  are 
The  Human  Resources  Development  and 
implemented  in  the  three  candidate  countries  through  national  multiannual  operational 
programmes, respectively “Human Resources Development” and “Rural Development”. 

For  components  III  and  IV,  the  operational  programmes  adopted  by  the  Commission  in 
November and December 2007 cover the priorities and the financial allocations specified in 
the MIPDs 2007–2009. They will be revised in the course of 2009–2010 to take account of 
the  revision  of  the  MIPDs  and  the  addition  of  the  financial  envelopes  for  the  years  2010–
2013.  

The  Rural  Development  programmes  under  component  V,  adopted  by  the  Commission  in 
February  2008,  cover  the  whole  2007–2013  period.  They  are  reviewed  annually  to  take 
account of the revised MIPDs and of the yearly added financial envelopes in the Multiannual 
Indicative Financial Framework (MIFF). 

In potential candidates, the implementation of the IPA 2007 programmes started in the course 
of 2008. In candidate countries, the implementation started only towards the end of 2008, and 
only  for  some  programmes,  due  to  the  substantial  delay  in  the  accreditation  of  the  national 
authorities  responsible  for  managing  the  assistance  in  decentralised  mode  and  the  resulting 
delay  in  conferral  of  management  powers  by  the  Commission,  a  process  which  is  not 
completed yet for all countries/components17.  

In  the  case  of  the  former  Yugoslav  Republic  of  Macedonia,  while  the  management  and 
control systems required for decentralised management are being set up, the implementation 
of  components  I  and  II  programmes  is  taking  place  under  the  responsibility  of  the 
Commission’s  Delegation  (centralised  deconcentrated  management).  The  implementation  of 
components III, IV and V will only start once competent authorities have been accredited and 
the  Commission  has  conferred  management  powers  to  the  authorities  of  the  country.  This 

17 

Commission decisions conferring management powers were adopted in late 2008 for components I to 
IV in Croatia and for components I and II in Turkey. For the remaining components/countries, conferral 
of management powers by the Commission is expected in the course of 2009 or, in certain cases, in the 
beginning of 2010. 

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process is expected to be completed — including for components I and II — in the course of 
2009. 

Potential  candidate  countries  are  progressing  −  though  at  different  speeds  −  towards 
decentralised  management  of  the  assistance.  Candidate  countries  which  already  implement 
assistance  in  a  decentralised  manner,  are  working  on  roadmaps  to  achieve  decentralisation 
without ex ante control by the Commission. 

The transition from implementation of pre-accession assistance by the European Agency for 
Reconstruction  (EAR)  to  the  Commission  Delegations  and  offices  in  Belgrade,  Podgorica, 
Pristina and Skopje has been completed. The Agency was phased out on 31 December 2008. 
The  eventual  goal  is  for  partner  countries  themselves  to  take  over  the  implementation  of 
assistance, when they demonstrate their readiness to do so. 

3.3 

Delivery against the commitments undertaken 

Planning and programming of the assistance is provided in accordance with the general policy 
framework for pre–accession — defined in the European and Accession Partnerships — and 
taking  due  account  of  the  annual  progress  reports  and  strategy  paper  issued  by  the 
Commission.  Within  the  framework  of  the  democratic  scrutiny  process,  MIPDs  were 
submitted  to  and  discussed  with  the  Parliament  in  March  2007  (MIPDs  2007–2009)  and  in 
September 2008 (MIPDs 2008–2010).  

In  terms  of  the  coordination,  coherence  and  complementarity  of  IPA  assistance,  significant 
progress  has  been  achieved  in  donor  coordination.  The  Commission  has  involved  in  this 
process the major International Financial Institutions and bilateral EU and non–EU donors, as 
well as regional cooperation through partnership with the Regional Cooperation Council.  

Donor Coordination 

Since 2005, the Commission has promoted coordination among donors in countries benefiting 
from EU pre–accession assistance. To push the process forward, with the entry into force of 
IPA, the Commission promoted more structured coordination among donors who operate in 
Western Balkans and Turkey: EU Member States, non-EU donors (such as the USA, Norway, 
Switzerland, UN agencies) and International Financial Institutions (EBRD, EIB, World Bank, 
KFW  Bankengruppe,  Council  of  Europe  Development  Bank).  The  aim  was  to  increase 
coordination of assistance programmes with a view to increasing effectiveness and efficiency 
in delivery, improving complementarity and avoiding duplications. The Commission promoted 
a  consensus  among  donors  to  foster  “ownership”  of  the  coordination  of  assistance  by  the 
beneficiary  countries  as  a  vital  element  to  maximise  the  impact  of  aid,  and  to  support  the 
national authorities in their efforts to assume responsibility for donor coordination. This line 
was confirmed during the second annual Donor Coordination conference which took place in 
Brussels in October 2008. The IPA multiannual planning documents and national strategies 
have  been  recognised  as  key  donor  coordination  tools.  The  donors  agreed  to  enhance 
coordination at sector level and promote division of labour based on comparative advantages 
in line with the principles of the Paris Declaration on Aid Effectiveness. 

Coordination with International Financial Institutions (IFIs) has been reflected in a number 
of  initiatives  taken  by  the  Commission  and  IFIs  in  the  last  two  years.  Among  others,  in 
December  2007  the  Commission  together  with  the  EIB,  EBRD  and  Council  of  Europe 
Development  Bank  (CEB)  established  the  Infrastructure  Project  Facility  to  help  prepare 
infrastructure  investment  projects  in  the  transport,  energy,  environment  and  social  sectors. 
Moreover,  in  order  to  intensify  coordination,  in  March  2008  the  Commission,  the  EIB,  the 
EBRD  and  CEB  initiated  the  Western  Balkan  Investment  Framework.  In  the  context  of  the 

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economic and financial crisis, since November 2008 the Commission has been working very 
closely with IFIs to coordinate donors’ responses, to identify potential for joint actions and to 
prepare  a  “Crisis  Response  Package”  –  where  the  IPA  will  contribute  a  total  of  EUR  120 
million — to support SMEs and the private sector in general, energy efficiency, and municipal 
investments.  

Based  on  the  analysis  set  out  in  the  2007  Enlargement  Strategy  paper,  in  the  2008 
programming  of  the  TAIB  component  increased  support  was  given  to  enhance  governance, 
encourage  administrative  and  judicial  reform,  strengthen  the  rule  of  law,  support  the  fight 
against corruption and organised crime, promote human rights, protect minorities and develop 
civil  society.  Assistance  to  political  criteria  represents  now  about  one  third  of  the  TAIB 
component.  The  other  two  main  priorities  for  assistance  under  the  TAIB  component  are 
economic  criteria  and  European  standards.  Greater  participation  by  partner  countries  in 
Community programmes and agencies will be encouraged. 

In its meetings of December 2007 and June 2008, the European Council confirmed the EU’s 
readiness to assist Kosovo’s18 economic and political development through a clear European 
perspective, in line with the European perspective of the region. To this end, additional funds 
(EUR 60 million) were earmarked to strengthen the TAIB annual 2008 programme.  

In  July  2008,  the  Commission  organised  a  donor  conference  for  the  socio-economic 
development  of  Kosovo  which  resulted  in  a  total  pledge  of  EUR  1.2  billion,  with  the 
European  Union  and  its  member  states  contributing  nearly  EUR  800  million.  This  support 
should provide a considerable boost to Kosovo’s development. 

In response to the international financial crisis, the Commission is ready to consider different 
ways of assisting the authorities in the enlargement countries with managing its financial and 
economic consequences.  

3.4 

Adequacy of the financial envelopes and financial provisions 

The  financial  reference  amount  for  the  2007–2013  period  is  EUR  11.468  billion.  Some 
reinforcements to the original financial programming have taken place to tackle the Kosovo 
needs  (under  UNSCR  1244/1999)  to  meet  commitments  made  in  2006  and  enhanced  at  the 
donor  conference  in  July  2008.  Barring  major  changes  of  circumstance  or  unforeseen 
developments  in the Western Balkans and  Turkey, it will  be  possible  to stay within  the  5% 
deviation  allowed  for  in  the  interinstitutional  agreement.  Increases  so  far  amount  to  around 
1.4% of the total IPA reference amount.  

3.5 

Conclusion on the IPA Regulation 

Enlargement proved to be a very powerful EU policy. It is an excellent example of the high 
added  value  of  integrated  policies.  Therefore,  it  should  remain  a  strategic  priority  of  the 
European Union throughout the current period.  

There  is  no  need  to  modify  the  IPA  Regulation.  Possible  changes  in  the  status  of  IPA 
beneficiaries from potential candidate to candidate will require amendments to the annexes to 
the Council Regulation through the procedure envisaged in Article 23 of the Regulation. 

The  financial  envelope  is  currently  deemed  appropriate,  and  no  change  of  the  reference 
amount is needed. However, it should be closely monitored as it might not be adequate to deal 
with unforeseen developments in the region. 

18 

Under UNSCR No 1294/99. 

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4. 

4.1 

INSTRUMENT FOR STABILITY (IFS) 

Delivery against the declared objectives 

In the new framework, the IfS is the newest and most innovative financial instrument. It has 
been established with the objective of:  

- enabling the Community to give a consistent and integrated response to crisis and impending 
crisis, using a single legal instrument with simplified decision-making procedures. 

-  building  capacity  to  address  specific  global  and  transregional  threats  that  have  a 
destabilising effect and to ensure preparedness to address pre- and post-crisis situations. 

As regards the first objective, the instrument is the major innovation of the new architecture 
endowing the Community with an efficient tool for consistent and integrated crisis response 
capacity. By their very nature, crisis response measures can not be programmed in advance as 
they are developed in response to crisis situations. When used in response to political crises, 
measures  can  be  deployed  alongside  and  in  close  political  coordination  with  CFSP/ESDP 
actions.  This  makes  it  possible  for  the  EU  to  accompany  a  political  response  with  rapid 
delivery. The measures adopted in the course of 2007 and 2008 vary both geographically and 
thematically.  A  number  of  programmes  adopted  in  the  course  of  2007  have  already  started 
delivering concrete results. The 2007-2008 measures supported a broad range of issues either 
in crisis and conflict-related situations or in major disaster response programmes. The global 
reach  of  the  instrument  is  also  proving  essential.  Some  EUR  220  million  was  committed  in 
2007-2008 for crisis response and EUR 135 million is programmed for 2009. The main share 
of support was provided in Africa (mainly DRC, CAR, Chad, Somalia — 29%), followed by 
actions in Asia (mainly Afghanistan, Sri Lanka, Nepal, Southern Thailand, Aceh, East Timor 
— 19%), the Middle East (Lebanon, Palestine, Iraqi refugees in Syria — 12%), Kosovo (EUR 
24 million) and Georgia (EUR 17 million). Thematically, the adopted measures cover a broad 
range of issues, targeted on  the specific  needs of each conflict/post-conflict situation: short-
term  advice  to  develop  and  kick-start  post-conflict  security  system  reform  (CAR,  DRC, 
Guinea-Bissau, Lebanon, Palestine, East Timor), measures in areas where ESDP missions are 
deployed (Georgia, Kosovo, DRC, Afghanistan, Chad, Palestine), support to regional peace-
building capacity (AU — AMISOM Somalia, AU-UN Mediation in Darfur), the rule of law 
and  transitional  justice  (Afghanistan,  Kyrgyzstan,  Colombia,  Haiti,  Sierra  Leone,  Solomon 
Islands), support to interim administrations (ICO Kosovo, Somalia TFG), conflict resolution 
and  reconciliation  (Sri  Lanka,  Thailand,  Colombia,  Uganda,  Zimbabwe,  Peru,  Palestine, 
Burma,  Nepal),  post-disaster  recovery  programmes  and  needs  assessments  (Bangladesh, 
Nicaragua,  Lebanon,  Peru),  support  to  displaced  populations  (Lebanon,  Syria),  and  conflict 
resources (dedicated facility). 

As regards the second objective, support in the context of stable conditions, the Strategy for 
the years 2007-2011 and the Indicative Programme for the years 2007-2008 were adopted in 
August 2007 after receiving a unanimously favourable opinion from the IfS Committee and 
from  the  European  Parliament  through  the  democratic  scrutiny  process.  The  Indicative 
Programme  2009-2011  obtained  the  same  favourable  opinion  and  will  be  adopted  in  March 
2009. The programmes support international efforts to address the proliferation of weapons of 
mass  destruction  (EUR  53  million  for  2007-08  and  EUR  123  million  for  2009-2011)  and 
global  and  trans-regional  efforts  to  address  the  threats  posed  by  trafficking,  terrorism  and 
organised crime (EUR 19 million for 2007-08 and EUR 63 million for 2009-2011). It is one 
of  the  new  and  innovative  components  of  the  IfS  aiming  at  developing  longer–term  EC 
actions to counter global and trans–regional threats arising from organised crime, trafficking, 
proliferation  of  nuclear,  biological  and  chemical  agents  and  also  threats  to  critical 

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infrastructure  and  public  health.  It  complements  actions  supported  through  other  EC 
instruments,  including  the  EDF.  Projects  to  address  illicit  trafficking  of  drugs  from 
Afghanistan,  of  radioactive  and  nuclear  materials  in  the  former  Soviet  Union  and  to 
strengthen  export  controls  of  dual-use  goods  have  been  implemented  in  line  with  the  first 
indicative  programme  (2007-2008).  Weapons  of  mass  destruction  (WMD)  and  missile 
proliferation constitute a major threat not only for the EU but also for international security. 
In responding to the risks related to WMD, the EU continued the implementation of its WMD 
Strategy  in  2008  through  a  number  of  EU  Joint  Actions,  as  well  as  through  the  Stability 
Instrument  providing  political,  financial  and  technical  support  to  competent  multilateral 
bodies  and  assistance  to  third  countries  on  nuclear  security,  export  control,  bio-safety/bio-
security, redirection of former  weapons scientists  and border monitoring in conformity with 
the UNSC Resolution 1540. In addition to continuing efforts in the former Soviet Union, the 
Commission started to develop its assistance in new regions like the Middle East and South-
East  Asia.  Work  has  also  been  taken  forward  to  include  a  non-proliferation  clause  as  an 
essential  element  in  agreements  with  third  countries.  Such  a  clause  has  been  included  in 
agreements between the EU and almost 100 countries worldwide.  

A  mechanism  to  mobilise  EU  expertise  in  the  domains  covered  by  the  IfS  (expert  support 
facility)  has  been  successfully  developed  and  employed  in  the  preparation  of  the  second 
indicative programme (2009-2011). More than 50 EU experts visited more than 20 potential 
partner  countries  to  assess  the  scope,  needs  and  conditions  for  cooperation  and  assistance 
under the IfS. Threats to critical infrastructure and major public health threats with a potential 
trans-national dimension are  new areas requiring extensive preparation and the Commission 
plans  to  come  back  to  these  two  areas  in  subsequent  Indicative  Programmes.  Finally,  an 
important objective is the crisis-preparedness component. For the period 2007-2008, EUR 15 
million  was  programmed  and  committed  for  this  component,  and  EUR  30-39  million  is 
foreseen for 2009-2011. It has been framed as a new Peace-Building Partnership which aims 
at  mobilising  and  consolidating  civilian  expertise  for  peace-building  activities.  It  focuses 
principally on strengthening directly the upstream capacity of the relevant partners to rapidly 
respond to a crisis scenario, and addresses, notably, civil society organisations, international 
organisations,  and  relevant  agencies  in  EU  Member  States.  The  work  under  the  Peace-
building Partnership is the subject of a fruitful ongoing dialogue with the relevant sub-group 
of the European Parliament’s Committee on Foreign Affairs.  

The mid-term review of the IfS Strategy Paper 2007-2011, as required by Article 7(3) of the 
Regulation, is expected to be conducted in 2009. 

As  far  as  landmines  are  concerned,  it  is  worth  recalling  that  the  IfS  is  not  meant  to  be  an 
instrument  replacing  —  legally  or  financially  —  the  repealed  Anti-Personnel  Landmines 
(APL) thematic budget line. The bulk of the funds to support mine action should come from 
the geographic instruments (DCI, IPA, ENPI, EDF) or the humanitarian aid instrument in case 
of need for humanitarian demining. The IfS support is foreseen only under its short-term remit 
and  with  some  constraints  and  for  addressing  the  illicit  trafficking  of  firearms  and 
ammunition. From a stock-taking exercise carried out among relevant Commission services in 
terms of programming funds committed to mine action after the repeal of the APL regulation, 
it is evident that funds have dropped by one third, which was the ratio covered by the APL 
horizontal  budget  line  vis-à-vis  the  geographic  and  development  instruments  (the  remaining 
two  thirds).  DG  External  Relations  is  strengthening  internal  coordination  within  the 
Commission  to  ensure  that  APL  are  given  proper  attention  and  hence  are  addressed  within 
national programmes. This has been recently reinforced by the adoption of new guidelines for 
APL action into CSPs and NIPs. 

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The  objectives  and  scope  of  the  Regulation  have  proven  to  be  adequate.  However,  an 
amendment is necessary to take into account the judgment of the European Court of Justice on 
small arms and light weapons. On 20 May 2008, the Grand Chamber of the European Court 
of Justice annulled Council Decision 2004/833/CFSP of 2 December 2004 implementing Joint 
Action 2002/589/CFSP with a view to a EU contribution to ECOWAS in the framework of 
the Moratorium on Small Arms and Light Weapons (hereinafter the ECOWAS Case)19. With 
respect to the fight against the proliferation of small arms and light weapons, the Council had 
already adopted several Joint Actions in the past. The Court held that measures to combat the 
proliferation  of  small  arms  and  light  weapons  fall  within  the  competences  conferred  on  the 
Community in the field of development policy and cannot be pursued as part of the CSFP if 
their main aim or component relates to development policy. This view was not shared by the 
Council  when  the  IfS  was  adopted  in  November  2006.  Therefore,  Article  3(2)(i)  of  the 
Regulation carried the following restriction: 

“Assistance shall be provided only to the extent necessary to re-establish the conditions for social and 
economic  development  of  the  populations  concerned,  in  a  situation  of  crisis  or  emerging  crisis  as 
referred  to  in  paragraph  1.  It  shall  not  include  support  for  measures  to  combat  the  proliferation  of 
arms;” 

When  the  IfS  Regulation  was  adopted,  Council  and  Commission  made  a  joint  statement  in 
which  they  agreed  that  in  the  context  of  the  mid-term  review  of  the  IfS  Regulation  under 
Article 25, the scope of Article 3(2)(i) would be revised as necessary20. In the view of its clear 
wording excluding financing to combat the proliferation of small arms and light weapons, it is 
necessary to propose a revision of that Article in order to bring it in line with the case law of 
the Court. For the same reason, Article 4(1)(a) on actions in support of the fight against the 
illicit trafficking should be revised to refer explicitly to “small arms and light weapons”. 

4.2 

Implementation issues 

The provisions foreseen under the regulation have proven to be adequate especially as regards 
the adoption of Exceptional Assistance Measures below the threshold of EUR 20 million that 
the Commission can adopt without the comitology procedure. This allows for rapid decision-
making,  which  is  absolutely  necessary  in  the  field  of  crisis  management.  Council  and 
Parliament are kept informed in line with the Regulation and the Commission’s commitments 
(see below under point 4.3).  

One implementation issue has emerged relating to the provisions for participation and rules 
of origin under Article 17 for the Peace-building Partnership. The first (2007) Annual Action 
Programme  under  the  Peace-building  Partnership  will  finance  (EUR  7  million)  inter  alia: 
capacity-building and early warning activities and exchange of experience on best practice for 
civil  society  organisations;  early  warning  and  early  recovery  work  with  UNDP  and  the 
African  Union;  and  training  for  civil  stabilisation  missions  (including  the  continuation  of 
training of Member State experts for civilian crisis management by the European Group for 
Training — EGT). The financing decision was adopted in late 2007, and the first components 
have  been  contracted  during  the  first  half  of  2008.  A  second  (2008)  Annual  Action 
Programme  for  EUR  8  million  was  adopted  in  March  2008.  Moreover,  the  Peace-building 
Partnership  builds  upon  existing  work  with  relevant  civil  society  organisations,  which  is 
currently being undertaken in the context of a preparatory action for the continuation of the 
earlier-established  ‘Conflict  Prevention  Network’.  While  some  capacity-building  actions  are 

19 
20 

ECJ, Case C-91/05 (ECOWAS). 
Council document 14010/06 ADD 1 of 27/10/2006. 

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implemented through the direct award of contracts to International Organisations, a large part 
(EUR  5.85  million  in  the  AAP  2008)  for  Peace-building  Partnership  Support  (Civil  society 
capacity-building:  EUR  4  million;  Civil  society  early  warning  and  field-based  analysis 
activities on conflict prevention: EUR 1.5 million; Pro-active policy advice from civil society: 
EUR 0.35 million) is being awarded through calls for proposals. However, the provisions for 
participation and rules of origin exclude OECD countries which do not belong to the EU or 
the  EEA,  like  Switzerland  and  Canada,  while  no  such  restriction  exists  for  contracts  under 
Article 3 (crisis response). This poses a serious setback to the potential quality of action and 
the attainment of objectives of Article 4(3), which are closely linked to those pursued under 
Article  3.  It  is  therefore  proposed  to  open  up  participation  in  the  award  of  procurement  or 
grant contracts under Article 4(3) on a global basis, bringing it into line with measures under 
Article 3. 

4.3 

Delivery against the commitments undertaken 

The adoption of the IfS was accompanied by a variety of commitments from the Commission 
vis-à-vis  the  Parliament  and  the  Council  included  in  various  Declarations  and  exchanges  of 
letters. 

Declaration of the Commission to the Parliament on the Stability Instrument 

In this Declaration, the Commission undertook to: 

(a) 

(b) 

“ inform the Parliament in a timely manner of exceptional assistance measures 
adopted, and  

to  ensure  that  measures  adopted  under  Article  4(1)(a)  in  relation  to  the  fight 
against  terrorism  and  organised  crime  are  in  accordance  with  international 
law.  Such  measures  will  be  targeted  at  countries  which  demonstrate  a  clear 
political will to address these problems in a manner which ensures full respect 
for  their  international  human  rights  obligations  and  applicable  humanitarian 
law.  The  Commission  will  monitor  carefully  the  implementation  of  such 
measures to ensure compliance with these principles.” 

The Commission has delivered on the first commitment by communicating to the Parliament 
the  information  it  provides  to  the  Council  pursuant  to  Article  6(5):  “Before  adopting  or 
renewing  any  Exceptional  Assistance  Measures  costing  up  to  EUR  20  000  000,  the 
Commission  shall  inform  the  Council  of  their  nature,  objectives  and  the  financial  amounts 
envisaged”.  This  has  been  implemented  by  way  of  Information  Notes  on  each  measure 
addressed to both Council and Parliament. 

Regarding the second commitment, the Commission has so far, under the AAP 2007, adopted 
one  measure  to  counter  drug  trafficking  from/to  Afghanistan  along  the  heroin  route  with  a 
special  emphasis  on  the  western  route.  The  specific  objective  is  the  development  of  trans-
regional  capacity  to  collect,  analyse  and  share  law  enforcement  data  in  the  areas  of  border 
control and forensics for Economic Cooperation Organisation (ECO) member countries. The 
project  is  planned  to  be  implemented  through  EU  Member  States,  in  collaboration  with 
UNODC and Interpol. An additional contribution of up to EUR 4.3 million is envisaged under 
the  AAP  2008.  The  decision  has  also  been  taken  on  the  basis  of  the  democratic  process  in 
Afghanistan, and the substantial EU commitment in the country to enhancing the rule of law 
and effective civilian policing with full respect for international human rights. 

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Commitment  of  the  Commission  to  the  Parliament  towards  the  establishment  of  a 
Peace-building Partnership 

In  a  letter  from  Commissioner  Ferrero-Waldner  to  the  Chairman  of  Parliament’s  Foreign 
Affairs  committee  on  7  June  2006,  the  Commission’s  proposals  for  establishing  a  Peace-
building  Partnership  under  the  Stability  Instrument  were  set  out,  to  build  on  the  European 
Programme for the Prevention of Violent Conflict adopted by the 2001 European Council, the 
commitments in  the European Consensus on Development on addressing  state fragility,  and 
the  Communication  on  Linking  Relief,  Rehabilitation  and  Development21.  In  delivering  on 
this commitment, the Commission included substantial amounts in the 2007 and 2008 AAPs 
for the implementation of Article 4(3) of the IfS for supporting NGOs and other NSAs: EUR 
3.35 million in 2007 and EUR 5.85 million in 2008. The calls for proposals were published in 
2008, and the selection process is under way. Framework Partnership Agreements with NGOs 
are planned to be established in 2009. Regional organisations such as the African Union have 
already benefitted from support under Article 4(3) for enhancing early warning capabilities.  

Joint Council/Commission Declaration on the Stability Instrument 

This declaration was added to the minutes of the Council when it adopted the IfS Regulation. 
It  essentially  provides  additional  detail  on  arrangements  to  implement  the  information 
requirement  under  Article  6(5),  in  particular  that  “The  Commission  shall  keep  the  Council 
regularly informed about its planning of Community assistance under Article 3.”  

The Commission delivered on these commitments by providing the Council with an update on 
its planning priorities under Article 3 on a monthly basis. This update is regularly discussed 
with  Member  States,  and  the  Commission  is  bound  to  take  due  account  of  any  guidance 
provided by the Council. This arrangement has worked well and to the satisfaction of both the 
Council and the Commission. 

4.4 

Adequacy of the financial envelopes and financial provisions 

The  overall  financial  envelope  for  the  Instrument  for  Stability  for  the  period  2007-2013  is 
EUR 2.062 million. Out of this amount, the Regulation specifies that no more than 7%, 15% 
and 5% is to be allocated to measures falling under Articles 4(1), 4(2) and 4(3) respectively, 
that is the long-term component, while the other 73% is allocated for crisis response.  

The  crisis  response  component  under  Article  3  represents  the  bulk  of  the  budget  (EUR  91 
million in 2007, EUR 128 million in 2008) and has been entirely committed according to the 
priorities.  The  allocations  for  measures  under  Article  4(2)  (up  to  15%  of  the  financial 
envelope)  and  Article  4(3)  (up  to  5%  of  the  financial  envelope)  have  also  proven  to  be 
adequate. However, although the financial envelope foresaw a steep increase under this “crisis 
response” component, the envelope has been reduced by €240 million and re-allocated to the 
financing of the Food Facility in the framework of the 2009 budget procedure. This reduction 
has been distributed over 2009-2013 to minimise its budget impact on that component. As a 
result, the 2009 budget for this component amounts to EUR 135 million. 

As  regards  the  budget  allocation  foreseen  for  measures  under  Article  4(1)  (up  to  7%  of  the 
financial  envelope),  it  has  proven  to  be  inadequate  and  needs  to  be  increased.  The  areas 
covered by Article 4(1) are numerous and, even with multi-purpose programmes only a few 
can  be  handled  effectively  with  the  resources  available.  Developing  effective  actions  in  the 
area  of  critical  infrastructures,  public  health  risks,  and  global  responses  to  trans-regional 

21 

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threats requires more substantial measures to allow real impact, visibility  and credibility. In 
addition, the development of trans-regional actions which are complementary to national and 
regional  envelopes  requires  an  appropriate  level  of  funding  to  reach  critical  mass  and 
sustainability.  The budgetary  allocations so far  (EUR  9  million  in  2007,  EUR  10  million  in 
2008, EUR 13 million in 2009), and the limit of 7% in Article 24 of the IfS Regulation do not 
allow for these objectives to be met.  

It is therefore proposed to increase the maximum share of measures under Article 4(1) from 
7% to 10%.  

4.5 

Conclusion on the IfS Regulation 

The provisions of this new financial instrument are adequate to pursue the objectives provided 
that the amendments requested are adopted: 

•  As regards small arms and light weapons, a revision of the Regulation in order to bring it 

in line with the case law of the Court. 

•  The  revision  of  the  provisions  on  participation  and  rules  of  origin  for  measures  under 

Article 4(3).  

•  The adjustment of the budget allocation for measures under Article 4(1). 

Finally,  the  Commission  is  delivering  on  all  the  various  commitments  undertaken  in  the 
context of the adoption of the Stability Instrument. 

5. 

5.1 

EUROPEAN INSTRUMENT FOR DEMOCRACY AND HUMAN RIGHTS (EIDHR)  

Delivery against the declared objectives 

Community  assistance  under  this  instrument  is  complementary  to  that  provided  under  the 
geographic and thematic instruments for external actions. The instrument takes over from the 
two  previous  regulations  under  a  single  framework  with  a  global  reach.  It  addresses  global, 
regional,  national  and  local  human  rights  and  democratisation  issues  mainly  in  partnership 
with  civil  society  and  independently  of  the  consent  of  third-country  governments  and  other 
public authorities.  

The  EIDHR  is  mainly  implemented  through  calls  for  proposals,  managed  both  centrally  by 
Headquarters  and  directly  by  Delegations.  The  Strategy  Paper  2007-2010  was  adopted  in 
August 2007 after democratic scrutiny and comitology. No problems were encountered in the 
strategy  formulation  and  the  Regulation  has  proven  very  instrumental  in  the  pursuit  of  the 
policy objectives.  

Following  the  adoption  of  the  Strategy  Paper,  the  2007  Annual  Action  Programme  was 
approved in December 2007, and the contractual phase started in autumn 2008. Four calls for 
proposals  for  the  2008  AAP  were  launched  in  January,  April  and  June  2008.  A  fifth  was 
launched  and  is  permanently  opened.  The  2009  AAP  is  likely  to  be  adopted  by  the  end  of 
March 2009. 

It is too early to evaluate the EIDHR delivery against the declared objectives, but this is the 
normal cycle for this kind of programme where there is a time-lag between the launch of the 
programme  and  the  evaluation  of  the  results.  A  first  indicator  at  this  stage  is  the  high 
participation  of  civil  society  organisations  in  the  different  calls  for  proposal,  which  shows 
these organisations’ interest in the instrument. 

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The mid-term revision of the strategy paper will be carried out in 2009 for adoption in early 
2010. 

5.2 

Implementation issues 

One  of  the  founding  principles  of  the  EIDHR  is  its  independence  from  the  consent  of  the 
third-country governments and other public authorities. In this context, the implementation of 
the strict wording of Article 13(6), which excludes the payment of taxes, duties or charges, is 
proving to be highly problematic, especially in countries where human rights and fundamental 
freedoms  are  most  at  risk.  Indeed,  in  these  cases,  third  countries  are  unwilling  to  exempt 
EIDHR local beneficiaries.  

The “tax and duties” issue has been systematically raised by Delegations and partner NGOs 
during  2008.  Under  the  current  instrument,  taxes  paid  by  the  beneficiaries  are  strictly  not 
eligible and this creates an extra financial burden on the beneficiary in a politically sensitive 
area  (i.e.  increasing  de  facto  the  beneficiaries’  contribution  and  decreasing  the  EC 
contribution).  In  countries  where  fundamental  rights  are  most  at  risk,  full  financing  in 
conformity with Article 169 of the Financial Regulation is considered to protect the security 
of  the  organisations  and  their  staff:  this  is  compromised  by  the  current  provisions  of  the 
Regulation.  

The  flexibility  inserted  in  the  majority  of  other  instruments  is  required  to  allow  for  the 
payment of taxes, duties or charges in exceptional cases and on a case-by-case basis. There is 
therefore  a  need  for  a  technical  amendment  to  harmonise  Article  13(6)  with  the  other 
instruments  as  follows:  “Community  assistance  shall,  in  principle,  not  be  used  for  paying 
taxes,  duties  or  charges  in  beneficiary  countries”.  This  flexibility  will  be  consistently 
circumscribed through internal guidelines for all instruments, clarifying that the exception can 
only be granted on a case by case basis and under exceptional circumstances.  

5.3 

Delivery against the commitments undertaken 

In  the  framework  of  the  final  adoption  of  the  Regulation,  the  Commission  issued  a 
Declaration on limiting Electoral Observation Missions (EOMs) to 25% of the total available 
funds over the period 2007-2013, with a maximum of 30% for a given year in duly justified 
cases. The programming and funding of EOMs over 2007-2009 has respected that ceiling and 
the  Commission  will  continue  over  the  coming  years  to  prioritise  EOMs  where  the 
Community’s  support  will  bring  the  most  value-added.  An  ad-hoc  budget  line  has  being 
created in the budget nomenclature to follow-up on EOM funding. The budget was EUR 30 
million  in  2007  and  EUR  23  million  in  2008.  For  2009,  the  budget  amounts  to  EUR  32 
million,  but  the  final  funding  will  depend  on  the  number  of  EOMs  supported.  This 
corresponds to 19% of the total budget covering the first 3 years.  

5.4 

Adequacy of the financial envelopes and financial provisions 

The programmed financial envelope for EIDHR has been respected over the years 2007-2009. 
During the year 2008, a budgetary transfer of EUR 8.4 million from line 19 04 03 (EOMs) to 
line  19  04  01  (general  Human  Rights  and  Democracy)  has  allowed  additional  EIDHR 
activities to be financed in response to the calls for proposals. This was exceptionally possible 
because  a  lower  number  of  EOMs  was  decided  in  2008  by  the  Commission,  in  agreement 
with the Council and the European Parliament.  

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5.5 

Conclusion on the EIDHR Regulation 

Given its implementation methods, the EIDHR contractual phase started in autumn 2008. It is 
therefore  too  early  to  evaluate  its  delivery  against  the  declared  objectives.  However,  no 
implementation problems have appeared except for the issue of taxes, duties and charges. 

Further  to  this  review  of  the  EIDHR,  it  is  therefore  proposed  to  proceed  with  the  technical 
amendment  of  the  Regulation  bringing  Article  13(6)  on  taxes,  duties  and  charges  into  line 
with the other instruments in order to allow in exceptional and duly justified cases for their 
eligibility as follows: “Community financing shall, in principle, not be used for paying taxes, 
duties or charges in beneficiary countries.” 

6. 

6.1 

INSTRUMENT FOR NUCLEAR SAFETY COOPERATION (INSC)  

Delivery against the declared objectives 

The  Instrument  for  Nuclear  Safety  Cooperation  (INSC)  provides  for  the  continuation  of 
actions  undertaken  by  the  Commission  in  the  field  of  nuclear  safety  and  safeguards  which 
took  place  between  1991  and  2006  under  the  TACIS  nuclear  safety  programmes.  Although 
the  scope  and  implementation  provisions  have  been  adapted,  the  major  change  has  been 
extension to other third countries engaging in nuclear installations. Jordan and Egypt are the 
first non-CIS countries to benefit from the new instrument. The extensive experience of the 
Commission  services  with  assistance  and  cooperation  on  nuclear  safety  and  safeguards  has 
been  taken  into  account  in  the  drafting  of  the  new  INSC  and  the  transition  has  been  very 
smooth. 

The Strategy Paper 2007-2013 and Indicative Programme 2007-2009 were submitted in due 
time and discussed with Member States representatives within the INSC Committee and later 
adopted by the Commission. Furthermore, the Commission adopted a Communication to the 
Parliament  and  the  Council  ‘Addressing  the  International  Challenge  of  Nuclear  Safety  and 
Security’22.  Implementation  of  the  projects  under  the  Annual  Action  Programme  (AAP)  for 
2007 has started.  Armenia and Ukraine  have  signed the relevant Financing Agreements and 
projects for improving the safety at the Medzamor Nuclear Power Plant are in the tendering 
phase.  Russia  has  not  signed  the  Financing  Agreement  related  to  AAP2007  and  a  new 
framework for cooperation is to be defined with this country. The Commission is the largest 
contributor to the Chernobyl international funds. Disbursements to these funds have already 
taken place under the INSC23. Due to major additional costs in important projects which are 
entering the construction phase the Commission financing will be required in future to ensure 
their completion. 

6.2 

Implementation issues and adequacy of the financial envelopes  

No  implementation  issues  which  might  require  a  revision  of  the  Regulation  have  been 
encountered.  

The  financial  envelopes  and  financial  provisions  have  been  found  adequate  though  slight 
adjustments  might  be  necessary  as  regards  the  2010-2013  profile,  for  frontloading  some 
operations.  However,  these  adjustments  would  be  marginal  and  budget  neutral  over  the 
period.  

22 
23 

COM (2008) 312 final of 22.05.2008. 
A  EUR 10  million  grant  under  AAP2007  (3rd  pledge  —  2nd  part)  and  another  EUR 15  million  under 
AAP2008. 

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6.3 

Conclusion on the INSC Regulation 

The transition from the previous instruments has been very smooth with the main differences 
being  that  cooperation  aspects  have  been  reinforced,  including  co-financing,  and  that  the 
geographical coverage has been extended to cover other third countries.  

The financial reference amount and provisions of the INSC are considered to be adequate. 

No revision of the instrument is required at this stage.  

7. 

INSTRUMENT FOR COOPERATION WITH INDUSTRIALISED AND OTHER HIGH-INCOME 
COUNTRIES AND TERRITORIES (ICI)  

7.1 

Delivery against the declared objectives 

The  ICI  promotes  cooperation  with  17  industrialised  and  other  high-income  countries  and 
territories in North America, the Asia-Pacific region and the Gulf region. The ICI has a wider 
scope  than  the  former  instrument  for  cooperation  with  industrialised  countries  (Council 
Regulation 382/2001), which was confined to six countries and covered a more limited range 
of activities. 

Based  on  Article  181a  of  the  Treaty,  the  ICI  contributes  to  fostering  relations  between  the 
Community  and  countries  and  territories  that  often  share  similar  values,  are  important 
political  and  trading  partners,  and  play  an  active  role  in  multilateral  fora  and  global 
governance. 

The  actions  provided  for  under  the  aegis  of  the  ICI  support  the  strategic  objectives  of  the 
Community’s external action in relation to these countries: 

•  advancing  EU  interests  with  our  main  industrialised  partners  on  (a)  key  foreign  policy, 
security  and  development  issues;  (b)  economic  integration,  including  promoting  growth, 
trade,  investment  and  jobs;  and  (c)  global  issues  such  as  energy  security  and  climate 
change; 

•  managing the existing frameworks for bilateral relations with the EU’s main industrialised 
and high-income partners and developing these frameworks in support of EU objectives; 

•  advancing  networking  and  awareness  of  the  EU,  by  facilitating  people-to-people 

exchanges and educational, scientific and academic contacts. 

Specific cooperation activities have been so far organised around three main priority areas: 

(1) 
Public  diplomacy  and  outreach.  The  key  objectives  are  to  enhance  the  profile  of  the 
EU,  and  to  promote  better  understanding  of  Community  action  and  positions  in  partner 
countries.  To  achieve  these  objectives,  the  network  of  EU  Centres  has  been  strengthened, 
support  is  provided  to  public  policy  think-tanks  and  research  institutes,  and  targeted  events 
are organised in partner countries. 

(2) 
Economic partnership and business cooperation. The cooperation activities contribute 
to  the  strategic  objective  of  strengthening  the  presence  of  European  companies  in  key 
markets. In particular, they should facilitate market access for European companies, including 
small and medium-sized enterprises. The range of services provided to European companies 
under  long-standing  business  cooperation  programmes  has  been  expanded,  in  light  of 
experience. 

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People-to-people links. The main goals are to enhance mutual understanding between 
(3) 
cultures  and  facilitate  the  exchange  of  knowledge.  To  this  end,  the  main  initiatives  are  to 
strengthen cooperation in the field of education and promote civil society dialogues. 

In  conclusion,  the  ICI  has  provided  a  flexible  basis  to  develop  cooperation  with  a  wider 
number  of  industrialised  and  high-income  territories,  and  to  extend  this  cooperation  to  new 
areas, in particular people-to-people links and education cooperation. 

As  from  2011,  the  ICI  will  also  incorporate  the  support  to  the  development  of  transatlantic 
methods for handling global challenges, which is  now carried in the form  of a Pilot Project 
started  in  2007  under  the  Parliament’s  initiative.  The  scope  of  the  current  Regulation  can 
cover this activity without any modification.  

7.2 

Implementation issues and adequacy of the financial envelope 

The  ICI  is  implemented  in  the  context  of  multiannual  cooperation  programmes  and  annual 
action  programmes.  The  first  multiannual  programme  2007-2010  will  be  adjusted  in  2009 
(mid-term review of multiannual programmes as set out in Article 5(2).) to open an External 
Cooperation  Window  for  industrialised  countries  in  the  context  of  the  new  programme 
Erasmus Mundus (2009-2013).  

No particular difficulty has been encountered in the implementation of the ICI which would 
point to a need for amendment. 

The financial envelope is tight but it is deemed adequate as long as no further activities have 
to be financed. For that reason, the incorporation of the Pilot Project “Transatlantic methods 
for  handling  global  challenges”  in  2011  will  require  about  EUR 1  million  per  year  over  the 
rest  of  the  period  2011-2013.  This  small  increase  does  not  require  a  modification  of  the 
reference  amount  for  the  industrialised  countries.  The  scope  of  the  current  Regulation  can 
cover this activity without any modification.  

7.3 

Conclusion on the ICI Regulation  

The  ICI  has  proved  an  effective  and  flexible  instrument  to  develop  cooperation  with 
industrialised and high-income countries/territories. No amendment is required as regards the 
cooperation with this group of countries, but a slight increase of the budget will be necessary 
to  take  into  consideration  the incorporation  of  the  Pilot  Project  on  transatlantic  methods  for 
handling global challenges. A separate financial envelope will be added to the amended ICI 
Regulation which concerns only the geographical extension to the DCI countries. 

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