COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Enhancing EU Accountability on Financing for Development towards the EU Official Development Assistance Peer Review
Date: 2011-04-19
Institutions: European Commission
Subjects: climate change, developing countries, development aid, development plan, development policy, distribution of EU funding, international cooperation

EUROPEAN COMMISSION 

Brussels, 19.4.2011 
COM(2011) 218 final/2 

CORRIGENDUM 
Annule et remplace le COM(2011) 218 final du 19.4.2011 
Concerne uniquement les versions FR, EN et DE (footnotes 1 et 8 sont complétées) 

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

Enhancing EU Accountability on Financing for Development 
towards the EU Official Development Assistance Peer Review 

{SEC(2011) 500 final} 
{SEC(2011) 501 final} 
{SEC(2011) 502 final} 
{SEC(2011) 503 final} 
{SEC(2011) 504 final} 
{SEC(2011) 505 final} 

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

Enhancing EU Accountability on Financing for Development 
towards the EU Official Development Assistance Peer Review 

CONTENTS 

1. 

2. 

3. 

Introduction .................................................................................................................. 2 

EU Financing for Development in the global context ................................................. 2 

EU Performance in 2010.............................................................................................. 4 

3.1. 

Making more resources available for development and global challenges.................. 4 

3.1.1.  Support for mobilising domestic resources for development ...................................... 4 

3.1.2.  EU largest donor but 2010 targets missed ................................................................... 5 

3.1.3.  EU financing for climate change and biodiversity....................................................... 6 

3.1.4. 

Innovative financing sources and mechanisms for development................................. 7 

3.1.5.  Using ODA to leverage more private flows................................................................. 7 

3.1.6.  Supporting developing countries’ trading capacity through Aid for Trade ................. 8 

3.1.7.  Need to pre-empt future debt crises in developing countries....................................... 9 

3.2. 

Impact of EU aid .......................................................................................................... 9 

3.2.1.  Using aid better ............................................................................................................ 9 

3.2.2.  Global financial governance, empowering developing countries ................................ 9 

4. 

Conclusions .................................................................................................................. 9 

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1. 

INTRODUCTION 

Following the global crises and last year’s renewed commitment to accompanying developing 
countries in reaching the Millennium Development Goals (MDGs), this Communication and 
its  accompanying  Staff  Working  Document1  analyse  the  EU  and  its  Member  States’ 
performance in fulfilling common commitments on mobilising domestic (tax governance) and 
international  resources  for  development,  increasing  trade  capacity  and  investment,  Official 
Development  Assistance  (ODA),  innovative  sources  and  mechanisms  of  financing,  aid 
effectiveness, debt, climate finance and the voice and representation of developing countries 
in international financial institutions. They break down progress on the above issues, showing 
where the EU has been successful and where more should be done. They also reflect progress 
on transparency and accountability in international cooperation: for the first time the replies of 
Member  States  agreeing  to  do  so  and  of  the  Commission  to  the  annual  questionnaire  are 
published. 

The  Communication  is  also  an  input  for  the  Istanbul  UN  conference  on  Least  Developed 
Countries2 and the Busan High Level Forum IV on Aid Effectiveness3. 

The Communication recaps proposals on how to reach common EU targets, considers how to 
bridge the estimated EUR 50 billion gap between current ODA levels and the target for 2015, 
and provides a basis for the Council report to the European Council for the annual ODA peer 
review discussion on how to meet the EU ODA targets by 20154. 

2. 

EU FINANCING FOR DEVELOPMENT IN THE GLOBAL CONTEXT 

The  EU  has  been  a  leading  force  in  pushing  for  better  living  standards  in  developing 
countries.  When  world  leaders  convened  last  autumn  in  New  York  for  the  UN  Summit  on 
MDGs,  the  EU  actively  promoted  the  global  consensus  on  joint  action.  Mobilising  more 
development financing from all available sources is crucial to fighting poverty. More money 
alone,  however,  does  not  bring  about  development.  Developing  countries  have  primary 
responsibility for their own development and improving policy and governance frameworks. 
In addition to being a generous donor, the EU has a comprehensive set of actions to support 
developing countries in their quest for sustainable development, in particular by designing aid 
policies  with  partner  countries,  ensuring  that  the  EU’s  internal  policies  are  consistent  with 
development  objectives  and  helping  developing  countries  tackle  global  challenges.  Unlike 
most  donors,  the  EU  has  set  itself  quantitative  and  qualitative  targets  against  which  its 
progress can be measured.  

The  EU  commitments  are  founded  on  the  global  Financing  for  Development  agenda5, 
covering  different  sources  of  finance,  although  this  agenda  does  not  sufficiently  reflect 
changes  in  the  global  landscape  such  as  new  official  donors  and  investors,  charities,  South-
South  cooperation  and  private  sector  activity.  ODA  is  the  best  known  indicator  of  official 

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SEC(2011) 500 final EU Accountability Report 2011 on Financing for Development. 
LDC IV conference, Istanbul, May 2011. 
HLF IV, Busan, November 2011. 
Conclusions of the European Council of 17.06.2010, par. 20. 
Monterrey Consensus of 2002, Doha Declaration on Financing for Development of 2008. 

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donors’  resolve  and  the  main  focus  of  this  document;  but  is  not  the  only  source  of  funds 
mobilised for development. 

Over the period 2004–2010, the EU and its Member States accounted for 57 % of net ODA to 
developing  countries  from  all  OECD  DAC  and  EU  donors  and  for  65 %  of  the  global 
EUR 25.7 billion increase in ODA. In 2010, the OECD DAC and EU donors’ ODA reached 
EUR 97.2 billion in nominal terms. The EU as a whole provides 58% of this aid. Already the 
world’s biggest donor, the EU and its Member States promised to increase ODA spending to 
0.7 % of its combined Gross National Income (GNI) by 2015. This would add another EUR 50 
billion to the current EUR 53.8 billion. 

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Graph: ODA of the EU and its Member States and of other non-EU G8 members 

Net ODA Volumes by Donor 
(Disbursements, EUR million at 2008 prices)

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EU

Canada

Japan

USA

2004

36775

2477

6225

15315

2005

47083

3228

9443

21010

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48367

2889

8547

17140

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45617

2937

6018

15428

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50032

3324

6656

18610

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50152

3000

5925

19737

2010

53458

3382

6624

20436

Source: OECD DAC Table 1 

There are other major sources of financing available for developing countries besides ODA. 
For example, global remittances from migrants were expected to amount to around EUR 245 
billion in 2010, private charities are by some calculations estimated to provide about EUR 35 
billion annually6; global Foreign Direct Investment (FDI) flows are about equal to ODA and 
new  economic  powers  like  Brazil,  Russia,  India  and  China  spend  increasing  amounts 
supporting  developing  countries.  While  these  funds  are  of  a  distinct  nature  and  managed 
differently from ODA, together they could, if harnessed to complement ODA, better meet the 
need to foster development and tackle global challenges. 

3. 

EU PERFORMANCE IN 2010 

This Communication and supporting document illustrate how the EU and its Member States 
have moved to meet their various commitments. It shows that, in general, the EU as a whole 
has kept up progress in delivering on its pledges, although the situation varies greatly between 
issues and between Member States. 

3.1.  Making more resources available for development and global challenges 

3.1.1. 

Support for mobilising domestic resources for development 

Generating more domestic resources is widely seen as the most important way of achieving 
sustainable development and growing out of aid dependency over time. Developing countries’ 
state  budgets  are  by  far  the  biggest  source  of  development  finance.  Increasing  financial 

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http://www.hudson.org/files/pdf_upload/Index_of_Global_Philanthropy_and_Remittances_2010.pdf  

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independence from external support creates the fiscal space necessary to finance the MDGs 
and strengthens the link between the state and its citizens. 

In  2010,  the  EU  and  its  Member  States  continued  to  refine  their  methods  of  working  with 
partner  countries  on  these  issues  with  the  aim  of  providing  enhanced  support,  including 
through capacity building, for domestic revenue mobilisation in developing countries in line 
with the principles of good governance in tax matters (transparency, exchange of information 
and  fair  tax  competition),  as  part  of  their  wider  efforts  to  strengthen  good  governance  and 
public finance management. The EU will continue to promote those principles and to support 
developing  countries  to  fight  tax  evasion  and  harmful  tax  practices  so  as  to  develop  a 
transparent, cooperative international tax environment. 

The  EU  already  enhanced  its  support  for  the  Extractive  Industries  Transparency  Initiative 
(EITI)  as  an  emerging  global  standard  for  revenue  transparency  and  accountability  and  will 
encourage developing countries’ efforts to improve governance of extractive industries active 
in  their  countries.  The  EU  is  also  working  towards  increased  policy  coherence  for 
development,  e.g.  by  working  towards  the  possible  disclosure  by  multinational  corporations 
of  financial  data  on  a  country-by-country  basis  to  enhance  transparency  and  corporate 
governance. The Commission is considering legislation on this issue, at least with regard to 
listed  companies  active  in  the  extractive  industry,  in  the  framework  of  the  revision  of  the 
Transparency Directive, currently foreseen for autumn. Enhanced transparency and improved 
corporate  governance  will  help  developing  countries  to  optimise  revenue  collection  and 
maximise their fiscal resources to ensure the delivery of public goods and services. 

3.1.2.  EU largest donor but 2010 targets missed 

The EU is the world’s most ambitious group of donors, committed to providing 0.7 % of its 
collective  GNI  in  ODA  by  2015,  in  line  with  the  long-standing  UN  goal.  The  EU  leaders 
agreed  this  collective  target  in  2005,  based  on  Member  States’  differentiated  individual 
targets.  

Part  of  the  agreement  was  the  intermediary  collective  goal  of  0.56 %  ODA/GNI  by  2010. 
While  reaching  a  historical  high  of  EUR 53.8  billion,  representing  0.43%  ODA/GNI  and 
mobilising  additional  more  than  EUR 4.5  billion  despite  the  economic  downturn,  Member 
States missed the intermediate target, falling short of the promise by EUR 15 billion. 

Large differences between Member States persist: while some endeavour to do their share in 
implementing the common agreement, others do not deliver on their individual commitments 
to the collective EU results. This undermines the principle of fair internal EU burden-sharing 
and  may  have  contributed  to  aid  cuts  in  some  Member  States  with  ODA  levels  at  or  above 
0.7 % of GNI. Unless all EU Member States do their agreed part, the EU will not reach the 
collective  2015  target.  In  this  context,  it  is  of  particular  concern  that  some  Member  States 
have  announced  ODA  decreases  for  2011  and  beyond,  which  challenge  the  common  EU 
efforts.The European Commission has reported EUR 14.95 billion as ODA net disbursements 
for 2010. The amount includes EUR 5.15 billion of non-grant concessional EIB loans, mainly 
financed through  EIB  own  resources  and the remainder through the European  Development 
Fund and the EU budget. 

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Graph: Member States’ ODA performance in 2010 in% of GNI 

Gap between 2010 ODA levels and agreed individual targets of the 27 EU Member States 
and direction of change from 2009 to 2010

1.20

1.09

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0.80

0.60

0.40

0.20

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0.97

0.90

0.81

0.64

0.56 0.55

0.53

0.7

0.51

Direction of change of ODA as % of GNI
          increase
          no change
          decrease

0.50

0.43

0.38

0.32

0.29

0.17 0.15

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2010 level (preliminary)

2010 individual commitment

2015 individual commitment

Source: OECD DAC and EU annual questionnaire on financing for development 

ODA  to  Africa:  The  EU  and  its  Member  States  together  remain  the  biggest  aid  donor  to 
Africa  and  disbursed  EUR 20.5  billion  to  the  continent  in  2009.  However,  the  2005 
commitment  -  to  increase  ODA  to  Sub-Saharan  Africa  and  to  channel  at  least  50 %  of  the 
combined aid increase to the continent - has only partially been realised. While ODA to Sub-
Saharan Africa grew by EUR2.7 billion since 2004, only 26% of the total ODA increase in 
real terms has been allocated to the African continent. 

ODA to Least Developed Countries (LDCs): Within the overall ODA commitment, the EU, 
in 2008, pledged to collectively spend at least 0.15 % of its combined GNI by 2010 on ODA 
to  the  LDCs.  This  target  has  been  narrowly  missed:  Combined  EU  ODA  to  LDCs 
corresponded  to  0.13%  of  GNI  in  2010,  based  on  preliminary  data  available.  In  2009  eight 
Member States individually met the threshold and another three spent at least a third of their 
overall ODA in LDCs, thereby demonstrating their resolve to help the poorest countries.  

3.1.3.  EU financing for climate change and biodiversity 

Developing countries need increased support to adapt to and mitigate climate change effects. 
In  the  lead-up  to  the  2009  UNFCCC  Copenhagen  Conference,  the  EU  committed  itself  to 
contributing  EUR7.2  billion  over  the  period  2010-2012  to  fast-start  climate  funding  for 

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developing countries7. In 2010 the EU as a whole provided EUR2.34 billion in line with its 
overall  target  for  2010-20128.  The  EU  is  also  reflecting  on  ways  to  meet  the  developed 
countries’ commitment under the Cancun Agreements, to mobilise USD 100 billion per year 
by  2020  jointly,  from  various  sources  (public,  private,  bilateral,  multilateral  and  innovative 
sources),  to  address  the  needs  of  developing  countries9  Developing  comparable  and 
transparent methods to measure, report and verify climate financing remains a key challenge. 
While  the  EU  and  its  Member  States  have  made  significant  progress  in  reporting  on  their 
implementation of fast-start finance in a transparent way, continued improvement in this area, 
particularly  in  view  of  the  longer  term  financing,  will  be  important  to  maintain  trust  in  the 
international process. 

Protecting  biodiversity  is  also  high  on  the  EU  agenda.  At  the  Nagoya  conference  of  the 
Convention on Biological Diversity (CBD) in 2010, the EU committed itself to substantially 
increase financial resources by 2020, to effectively implement the Strategic Plan 2011-2020 
and to "take effective and urgent action to halt the loss of biodiversity … contributing to … 
human  well  being  and  poverty  eradication."  Several  Member  States  announced  major 
increases in their commitments for conserving biodiversity in developing countries. 

3.1.4. 

Innovative financing sources and mechanisms for development 

As aid will never be enough to meet the financing needs of developing countries to achieve 
the MDGs and other internationally agreed development objectives, the EU committed itself 
to seriously considering innovative financing mechanisms with significant revenue generation 
potential to ensure predictable financing for sustainable development10. Several EU Member 
States already use different innovative sources and mechanisms that have raised, so far, about 
EUR 13 billion for development. While some Member States are considering further sources 
and  mechanisms,  there  is  no  common  EU  approach  yet  on  the  innovative  sources  and 
mechanisms with highest revenue generation potential. Mechanisms to spend revenues from 
innovative sources need to comply with agreed international aid effectiveness principles and 
avoid creating parallel spending channels. 

3.1.5.  Using ODA to leverage more private flows 

Working  together  with  the  private  sector  as  a  driver  of  inclusive  growth  and  sustainable 
development is an area where the EU has long seen great potential. The EU and the Member 
States  use  various  incentives  (investment  guarantees,  dedicated  funds,  preferential  loans, 
support for joint ventures, etc.) to encourage private capital flows to developing countries and 
support a stronger international framework for responsible corporate behaviour. The EU and 
its Member States could use more blending of loans and grants or use funds in equity or risk-
sharing  instruments,  to  mobilise  additional  funding  -  including  from  the  private  sector  -  to 

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As its part of the collective developed countries’ commitment to provide new and additional resources 
approaching USD 30 billion for that period. 
According  to  the  Member  States’  replies  to  the  Commission’s  annual  survey  on  Financing  for 
Development, see Volume II, Annex 4 of SEC(2011) 501 final. The figures provided by the Member 
States  have  been  slightly  adjusted  as  compared  to  the  preliminary  data  provided  for  the  EU  fast  start 
finance Report for Cancun adopted by the Council on 6.12.2010. 
See Commission Staff Working Document SEC(2011)487 of 08.04.2011 on "Scaling up international 
climate finance after 2012". 
Council Conclusions of 15.06.2010 on the Millennium Development Goals. 

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cover the investment needs of our partner countries. This will be addressed in the forthcoming 
policy proposals on the future EU development policy. 

Migrants’  remittances,  whose  private  nature  the  EU  underscores,  are  another  significant 
flow to developing countries that can contribute to development. Remittances from the EU to 
developing  countries,  even  by  a  conservative  assessment11,  are  about  the  same  as  total  EU 
ODA. Fluctuations in these flows can have a big impact on the living conditions of recipients 
in  developing  countries.  The  EU  promised  to  lower  the  cost  of  and  facilitate  remittance 
transfers12. To that end, in 2010, the EU and the Member States continued to work on several 
fronts, e.g. improving data, increasing transparency and competition in the payment services’ 
market,  financing  remittance-related  projects,  supporting  financial  services  in  developing 
countries, and improving migrants’ financial literacy. The cost of sending remittances fell in 
some EU Member States but rose in others13. Challenges remain: (i) to get precise data on the 
major corridors, sending costs and informal flows from the EU; (ii) to extend cost reductions 
to the recipient side in developing countries; (iii) to design enabling environments; and (iv) to 
improve financial access and financial literacy. 

3.1.6. 

Supporting developing countries’ trading capacity through Aid for Trade 

Trading on regional and international markets has great potential to support inclusive growth 
and  has  been  an  important  motor  of  many  development  success  stories.  The  EU  has 
consistently supported developing countries in using trade as a tool for development. As part 
of its joint Aid for Trade strategy, the EU as a whole agreed to action to increase aid for trade 
and  enhance  its  impact.  The  EU’s  combined  annual  aid  for  trade  was  EUR 10.5  billion  in 
200914, maintaining the all time high recorded the year before. EU and Member States’ trade-
related assistance — a subcomponent of aid for trade — increased substantially in 2009, to a 
collective EUR 3 billion, well above the spending target (for 2010 onwards) of EUR 2 billion 
per year.  

In  2009,  Africa  became  the  biggest  recipient  of  both  combined  EU  trade-related  assistance 
and aid for trade. The 2009 data also point to a strong increase in aid for trade to the African, 
Caribbean  and  Pacific  States,  at  EUR 3.6  billion.  The  proportion  of  EU  and  its  Member 
States’ aid for trade to LDCs remained stable at 22 % of the total. 

Reports  from  the  EU  field  offices  point  to  moderate  improvement  in  the  processes  that 
underpin both the volumes and the effectiveness of aid for trade, such as addressing trade in 
the policy dialogue between EU donors and partners; increasing partner country demand for 
aid  for  trade;  coordination  to  develop  and  implement  trade  strategies;  trade  needs 
assessments;  joint  operations  and  harmonisation,  and  including  strategic  economic  regional 
integration  priorities  in  national  development  plans  and  trade  strategy.  All  these  strands 
require  continued,  intensive  attention.  In  LDCs,  the  Enhanced  Integrated  Framework  for 
trade-related assistance offers a special opportunity to help these countries enhance attention 
to trade related issues and increase effective aid for trade. 

11 
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http://data.worldbank.org/data-catalog/world-development-indicators. 
Council  Conclusions  of  11.11.2008  Common  EU  position  for  the  Doha  Financing  for  Development 
Conference. 
http://remittanceprices.worldbank.org/ 
2010 data not yet available. 

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3.1.7.  Need to pre-empt future debt crises in developing countries  

The EU and its Member States are doing their share to contribute to the full implementation 
of  the  Multilateral  Debt  Relief  and  Heavily  Indebted  Poor  Countries  Initiatives.  Debt 
sustainability and the risk of possible debt distress among low and middle income countries 
will  have  to  be  taken  into  account  when  increasing  the  use  of  blending  loans  and  grants  in 
support  of  developing  countries.  In  order  to  avoid  new  debt  crises,  support  for  improved 
capacity for sound debt management and for responsible lending and borrowing practices is 
needed.  

3.2. 

Impact of EU aid 

3.2.1.  Using aid better 

The  EU  has  driven  international  efforts  to  use  aid  more  effectively.  The  aid  effectiveness 
principles  set  out  in  the  Paris  Declaration  and  Accra  Agenda  for  Action  have  been 
incorporated  into  the  EU  Operational  Framework  on  Aid  Effectiveness15,  which  contains 
commitments and milestones that allow the EU and its Member States to gauge their progress 
in spending ODA more effectively. While there is some improvement on several indicators, 
more action is needed to reach the overall goal of maximising value for money. The aim has 
to be to improve the developmental impact of EU aid as a whole. This avenue will be further 
examined  in  the  Communications  on  EU  joint  aid  programming  and  on  a  common  EU 
position for the Busan conference later in 2011. In Busan, the evidence on implementing aid 
effectiveness  principles  will  be  reviewed  in  the  wider  context  of  development.  A  future 
challenge will be to capture the role of aid effectiveness principles in high-impact aid and to 
further strengthen their implementation at country level. 

3.2.2.  Global financial governance, empowering developing countries 

The EU has consistently advocated a stronger voice for developing countries in international 
financial  institutions.  In  2010,  both  the  IMF  and  World  Bank  approved  major  governance 
reforms, e.g. increasing developing and transition countries’ voting and quota shares. The EU 
must  help  ensure  that  they  are  implemented  swiftly  in  both  institutions.  For  the  next  World 
Bank  shareholding  review  in  2015,  the  EU  believes  contributions  to  the  International 
lending  arm,  should  be 
the  World  Bank’s  concessional 
Development  Association, 
permanently  and  sufficiently  included  in  the  formula  on  voting  rights,  thus  setting  the  right 
incentives  for  all  shareholders  to  ensure  the  long-term  financial  sustainability  of  the 
institution. The EU should also strengthen coordination in international financial institutions 
to speak with a single voice on key concerns. 

4. 

CONCLUSIONS 

Building on the findings of the Report, the Commission recommends that the following steps 
be taken.  

(1) 

The  EU  and  the  Member  States  should  strengthen  their  support  to  developing 
countries' efforts in mobilising domestic resources for development in line with the 
principles of good governance in tax matters. 

15 

Consolidated text of 11.01.2011, Secretariat General of the Council 18239/10. 

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(2) 

Having  missed  the  2010  intermediary  ODA  target  of  0.56 %  of  GNI,  the  Member 
States should, in line with their commitment of 2005: 

(a) 

(b) 

(c) 

(d) 

confirm  the  EU’s  collective  commitment  to  increasing  ODA  to  0.7 %  of  the 
combined GNI by 2015. Based on the clear evidence that development policy 
at  EU  level  can  offer  high  value  added,  the  ODA  volumes  of  the  EU  itself 
should play its part in this increase16; 

confirm  that  they  will  reach  their  individual  ODA  targets,  as  each  Member 
State not fulfilling its part of the agreed targets undermines the EU's collective 
efforts towards the 0.7 % goal: 

– 

– 

the EU-15 to reach at least 0.51 % of ODA/GNI as soon as possible and 
0.7 % of GNI by 2015, while those already above that level undertake to 
sustain their efforts; 

the  EU-12  to  strive  towards  ODA  levels  of  at  least  0.17 %  of  GNI  as 
soon as possible and 0.33 % of GNI by 2015; 

take concrete national actions to achieve the targets, including by establishing 
multiannual action plans and enshrining ODA targets in national legislation; 

share  forward-looking  data  on  their  individual  actions,  showing  the  path  of 
increase of ODA budgets year on year in the lead-up to 2015, and present this 
data as part of the Council’s annual ODA report to the European Council. 

The Member States should confirm and deliver on the collective commitment to 
increase  ODA  to  Africa:  EU  ODA  to  Africa  has  not  increased  at  the  same  pace  as 
overall EU ODA. Member States should step up efforts to provide at least half of the 
ODA  increase  to  the  African  continent.  The  EU  and  its  Member  States  should 
coordinate their activities to provide more ODA to the African countries most in need. 

The  Member  States  should  confirm  and  deliver  on  the  commitment  to  increase 
ODA to LDCs:  They  should  coordinate  the  poverty focus of their aid  increases and 
reach the target of providing at least 0.15 % of their GNI to the LDCs. All EU Member 
States need to contribute to that goal. 

The  EU  and  its  Member  States  should  consider  strengthening  the  implementation  of 
aid effectiveness commitments by focusing on enabling partner countries to fully lead 
their own development and manage aid including through: 

(a) 

(b) 

developing  further  jointly  programming  of  aid  of  the  EU  as  a  whole;  the 
Commission will present a proposal later in 2011; 

reinforcing the existing EU Fast-Track Initiative on Division of Labour by 
expanding  it  towards  a  broader  support  network  for  implementing  the  EU 
Operational Framework on Aid Effectiveness; 

(3) 

(4) 

(5) 

16 

The EU Budget Review, COM(2010)700 of 19.10.2010. 

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(c) 

the  EU’s  experience 

based  on 
implementing  Aid  Effectiveness 
in 
commitments, work together towards a results-oriented Busan outcome that 
focuses  on  how  to  maximise  the  contribution  of  Aid  Effectiveness  strands  to 
development  results  at  partner  country  level.  The  Commission  will  present  a 
proposal for a common EU position for Busan later in 2011. 

(6) 

In the context of Aid for Trade, the EU and its Member States need to: 

(a) 

(b) 

(c) 

(d) 

enhance  Aid  for  Trade  support  to  LDCs,  e.g.  by  increasing  attention  to  the 
capacity of LDCs to formulate and implement trade development strategies in 
support of inclusive and sustainable growth; special attention needs to be given 
to  harnessing  the  potential  of  the  Enhanced  Integrated  Framework  for  Trade-
Related Assistance to LDCs as a tool for stakeholder coordination and strategy 
development; 

improve the effectiveness of aid for trade identified at country level, e.g. by 
making  better  use  of  trade  needs  assessments,  enhancing  the  effectiveness  of 
platforms intended to support the development of trade-related strategies; and 
acting on opportunities for increasing joint operations; 

further  step  up  support  for  regional  integration,  also  through  assistance 
provided at national level; 

support  partner  countries’  own monitoring of  results  and of the impact of aid 
for trade and the progress of their trade development strategies. 

(7) 

Innovative sources of financing have great potential to help bridge the development 
financing  gap.  Member  States  should  focus  efforts  on  innovative  mechanisms  with 
significant  revenue  generation  potential  and  ensure  that  a  substantial  share  of  the 
revenues thereby generated is used for developing countries. 

(8) 

ODA  and  climate  finance  are  complementary,  both  aim  at  supporting  developing 
countries building a ‘climate-proof’ future for themselves:  

(a) 

(b) 

(c) 

EU  donors  and  developing  countries  alike  need  to  have  a  single,  climate-
compatible development strategy that covers both adaptation and mitigation; 

EU donors should encourage other actors to implement climate finance actions 
in compliance with agreed aid effectiveness principles. 

According  to  the  Cancun  Agreements,  climate  finance  must  be  ‘new  and 
additional’ on which there is a wide range of differing views. Further progress 
is  needed  to  identify  a  sound  approach  which  ensures  that  climate  financing 
does not jeopardise the fight against poverty and progress towards the MDGs, 
as agreed by the European Council in 2009. 

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