COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS THE FUTURE APPROACH TO EU BUDGET SUPPORT TO THIRD COUNTRIES
Date: 2011-10-13
Institutions: European Commission
Subjects: EU financing, aid evaluation, development aid, disclosure of information, financing of aid, management audit, terms for aid

EUROPEAN COMMISSION 

Brussels, 13.10.2011 
COM(2011) 638 final 

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

THE FUTURE APPROACH TO EU BUDGET SUPPORT TO THIRD COUNTRIES 

 
 
 
 
  
 
1. 

WHAT  IS  BUDGET  SUPPORT;  WHY  DOES  THE  EU  USE  THIS 
INSTRUMENT?  

Budget support involves policy dialogue, financial transfers to the national treasury account of 
the partner country, performance assessment and capacity-building, based on partnership and 
mutual accountability. It should not be seen as an end in itself, but as a means of delivering 
better  aid  and  achieving  sustainable  development  objectives  by  fostering  partner  countries 
ownership  of  development  policies  and  reforms,  as  well  as  by  implementing  the  aid 
effectiveness  agenda  and  commitments  set  out  in  the  Monterrey  Consensus  (2002),  the 
European  Consensus  on  Development  (2005),  the  Paris  Declaration  on  Aid  Effectiveness 
(2005), and the Accra Agenda for Action (2008). 

Budget  support  is  an  important  instrument  in  EU's  comprehensive  development  policy 
towards partner countries. The Commission will ensure that EU budget support1 is consistent 
with  the  overarching  principles  and  objectives  of  EU  external  action  (Article  21  TEU)  and 
development policy (Article 208 TFEU). 

Following a Communication on budget support in 20002, the Commission pioneered a results-
oriented approach based on outcome indicators. Predictability, ownership and accountability 
were  further  enhanced  by  the  introduction  of  Millennium  Development  Goals  (MDG)-
Contracts in 2008.  

EU  budget  support  is  not  a  blank  cheque,  nor  is  it  provided  to  every  country.  "Underlying 
principles"  matter  and  policy  dialogue  is  a  key  part  of  the  package.  Moreover,  eligibility 
criteria have to be met before and during the programme and conditions need to be fulfilled 
before payments are made. This ensures that resources are used for their intended purposes, 
mitigates  risks,  and  creates  incentives  for  improved  performance  and  results.  It  also  creates 
incentives for our partner countries to improve their governments systems. 

Based  on  ten  years  of  experience  on  budget  support  and  calls  of    stakeholders    to  continue 
improving and refining the budget support mechanism, the Commission  decided to launch  a 
consultation in late 2010 on "The future of EU budget support to third countries"3.  

In  this  Communication,  the  Commission  sets  out  a  new  policy  on  budget  support  and  puts 
forward  policy  proposals  for  an  EU  coordinated  approach..  It  aims  to  adapt  budget  support 
policy to the changing political and policy environment, including the Treaty of Lisbon, and 
to  make  EU  budget  support  a  more  effective  instrument.  Member  States  may  also  consider 
these  as  recommendations  as  regards  to  their  bilateral  budget  support,  in  order  to  achieve  a 
coordinated approach by the EU as a whole. 

1 
2 
3 

Defined as budget support for which the Commission is responsible. 
COM(2000) 58, 2.2.2000. 
COM(2010) 586, 19.10.2010. 

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2. 

A MODERN APPROACH TO BUDGET SUPPORT 

2.1. 

Building on success 

EU  budget  support  should  continue  to  ensure  a  high  degree  of  predictability,  to  put  strong 
emphasis on development strategies that are nationally owned and to use performance related 
tranches. The Commission remains committed to results-based budget support operations and 
intends  to  further  strengthen  the  assessment  of  progress  and  monitoring  of  outcomes, 
including  by  using  process  and  output  indicators,  so  as  to  better  demonstrate  and 
communicate the way EU budget support contributes to the development of partner countries. 
Improving the visibility of EU action and better communication of results will help maintain 
public support for development.  

The  EU  should  continue  to  apply  a  dynamic  approach  to  eligibility  criteria,  focusing  on 
progress  in  the  implementation  of  credible  and  relevant  reform  strategies.  The  Commission 
intends  to  improve  its  eligibility  criteria  and  their  assessment  and  the  allocation  of  funds 
ensuring greater efficiency of the budgetary process towards achieving policy objectives. 

The Commission will refrain from establishing global targets for EU budget support to third 
countries.  It  considers  that  the  appropriate  mix  between  the  different  aid  modalities  is  best 
decided as part of a portfolio approach that comprises several aid modalities in response to a 
partner country's specificities and agreed development objectives.  

The  Commission  will  strengthen  its  risk  management  framework  for  EU  budget  support  in 
line  with  the  Court  of  Auditors'  recommendations.  This  will  include  closely  monitoring 
progress  in  the  fight  against  corruption  and  fraud  with  a  view  to  ensuring  sustainable 
development benefits. 

2.2. 

Responding to new development challenges and objectives 

The  new  approach  should  strengthen  the  contractual  partnership  on  EU  budget  support 
between the EU and partner countries in order to build and consolidate democracies, pursue 
sustainable economic growth and eradicate poverty. This approach must be based on mutual 
accountability and shared commitment to fundamental values of human rights, democracy and 
the rule of law. It should enable greater differentiation of budget support operations, allowing 
the EU to respond better to the political, economic and social context of the partner country. It 
will require close coordination between Commission services, the EEAS and Member States. 

The Commission is committed to strengthening transparency and accountability in EU budget 
support by introducing a specific eligibility criterion on budget transparency and  oversight.. 
The Commission is also committed to publishing relevant information on EU budget support 
operations.  

The  EU  should  provide  budget  support  as  a  vector  of  change  to  address  the  following 
development challenges and objectives.  

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2.2.1.  Promoting human rights and democratic values 

Commitment  to  the  fundamental  values  of  human  rights,  democracy  and  rule  of  law  is 
essential for the establishment of any partnership and cooperation between the EU and third 
countries.  

General budget support is seen, by its very nature, as an implicit recognition that the partner 
country's overall policy stance and political governance is on track. Therefore, general budget 
support should be provided where there is trust and confidence that aid will be spent pursuing 
the values and objectives to which the EU subscribes, and on which partner countries commit 
to move towards meeting international standards.  

When  providing  EU  general  budget  support,  the  Commission  aims  at  fostering  domestic 
accountability  and  strengthening  national  control  mechanisms  as  a  basis  for  improving 
governance and adherence to fundamental values. 

In cases where the partner country's  commitment  to  fundamental values shows a significant 
deteriorating trend an adequate and coordinated response strategy at EU and Member States 
level  needs  to  be  defined  and  implemented.  Unless  there  is  a  clear  cut-situation  where  EU 
financial interests and reputation need to be protected, in which case general budget support 
can  be  suspended  immediately,  the  response  to  deterioration  should  be  progressive  and 
proportionate.  Where  appropriate,  measures  to  limit  the  impact  on  poor  people  should  be 
designed  jointly  by  the  EU  and  Member  States,  in  cooperation  with  other  non-EU  donors. 
This  could  include  making  adjustments  to  the  size  of  any  fixed  tranche  and/or  reallocating 
funds  to  sector  programmes,  channelling  funds  to  target  groups  via  non-governmental 
organisations or reinforcing other aid modalities such as projects.  

In  order  to  better  reflect  these  fundamental  changes,  EU  general  budget  support  should  be 
referred to in future as "Good Governance and Development Contracts". 

As  regards  EU  sector  budget  support,  the  Commission  tends  to  focus  on  sectors  where 
policies and reforms are more promising to promote development and poverty alleviation; the 
drivers of change are stronger and aiming at addressing the basic needs of populations (e.g. 
basic services such as health, education, and water and sanitation). Most of the time, it is more 
efficient  to  use  government  delivery  mechanisms  to  reach  the  population  via  sector  budget 
support programmes. This also offers a means to improve the sustainability of programmes by 
improving  the  efficiency  and  effectiveness  of  the  government's  sectoral  delivery  structure. 
Sector budget support therefore remains a useful tool even where the conditions do not exist 
to permit the use of a Good Governance and Development Contract, because it often remains 
the best delivery mechanism, and can be used as a vector to improve governance. Assessing 
EU  sector  budget  support  in  the  light  of  political  governance  will  need  to  be  carefully 
balanced  against  the  need  to  serve  and  protect  the  population.  However,  where  political 
governance has severely deteriorated, the EU should reassess its overall cooperation with the 
partner country, including sector budget support. 

2.2.2. 

Improving financial management, macroeconomic stability, inclusive growth and the 
fight against corruption and fraud 

Budget support, in particular "Good Governance and Development Contracts", should be used 
to  strengthen  core  government  systems,  such  as  public  finance  management  and  public 
administration.  It  should  promote  macroeconomic  stability  and  fiscal  sustainability,  making 

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the  systems  more  effective  and  accountable  and  lead  to  a  comprehensive  and  transparent 
budgetary allocation process. It should be used to address constraints on sustained growth and 
to promote the "green economy", including the protection and sustainable use of public goods 
and natural resources, while ensuring that the benefits of growth are widely shared. 

As part of its objective to improve core government systems, particularly procurement, budget 
support  will  contribute  to  the  fight  against  corruption  and  crimes  involving  fraud.  Partner 
countries should be committed to inform the Commission, and in general all partners, when 
allegations  of  possible  fraud  or  corruption  are  brought  to  the  attention  of  the  national 
authorities.  Whenever  possible  and  without  prejudice  to  investigations,  the  findings  of  the 
relevant national investigative institution and any proposed action should be shared with the 
Commission, and in general with all partners.  

2.2.3.  Promoting sector reforms and improving sector service delivery 

When  promoting  service  delivery  or  reforms  in  a  specific  sector  (or  a  set  of  interlinked 
sectors) on the basis of a partner government's sector strategy, the provision of sector budget 
support can be decisive in enhancing the government's capacity to perform its functions and 
deliver sector objectives.  

Clear objectives should be defined, mainly in terms of improvements in public access and use 
of  quality  services  and,  in  particular  in  the  neighbourhood  countries,  support  for  the 
partnership  agenda.  Sector  specific  conditions  should  lead  to  a  regular  policy  dialogue, 
including on budgetary allocations to the sector, implementation of reforms, strengthening of 
institutions  and  systems,  progress  towards  sector  objectives,  and  efficient  service  delivery. 
Emphasis will be on issues relating to frontline service delivery, particularly pro-poor, gender 
and  children's  issues,  and  the  capacity  to  absorb  and  use  sector  research  results,  as  well  as 
creating conditions for inclusive and sustainable growth for human development..  

"Cash  on  Delivery"  approaches  will  also  be  explored,  building  on  experience  with  the 
variable  tranche  and  taking  into  account  each  country's  level  of  development  and  financing 
needs. 

The  Commission  intends  to  make  more  use  of  sector  budget  support  to  address  sector 
constraints, promote reforms and improve service delivery to populations.  In order  to  better 
reflect these fundamental changes, EU sector budget support should be referred to in future as 
"Sector Reform Contracts". 

2.2.4. 

State-building in fragile states and addressing development challenges of SIDS and 
OCTs  

Situations of fragility call for action to help partner countries ensure vital state functions, to 
support  the  transition  towards  development,  to  promote  governance,  human  rights  and 
democracy and to deliver basic services to the populations. These situations require a global, 
coherent  and  coordinated  response  for  which  budget  support  can  be  instrumental.  Together 
with  other  aid  modalities  (humanitarian  aid,  pooled  funds,  project  aid,  technical  assistance 
etc), it has to be accompanied by reinforced political and policy dialogue.  

The  decision  to  provide  EU  budget  support  should  be  taken  on  a  case  by  case  basis  and 
supported by an assessment of the expected benefits and potential risks. The Commission will 
ensure  that  these  decisions  take  into  account  the  overall  political  and  security  situation,  the 

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financial risks, and the potential cost of non intervention. The dynamics of change should be 
assessed on the basis of a joint analysis by the EU and Member States wherever possible. This 
should serve as the basis for coordination with the main development partners. A gradual and 
sequenced  approach  to  EU  budget  support  should  be  privileged,  to  best  adapt  to  specific 
circumstances and to manage the risk.  

This  should  be  referred  to  in  future  as  "State  Building  Contracts"  to  better  reflect  these 
elements. 

The  EU  will  also  pay  attention  to  SIDS  (Small  Island  Developing  States)  and  overseas 
countries and territories (OCTs). There, budget support can have an important impact, given 
the strong level of accountability and commitment to addressing their structural vulnerability 
and  climate  change  issues,  including  the  decline  of  biological  diversity  and  other 
environmental  shocks.  Budget  support  can  offer  an  efficient  way  of  addressing  these  cross-
cutting, long-term and structural challenges and threats. 

2.2.5. 

Improving domestic revenue mobilisation and reducing dependency on aid  

In  programming  EU  budget  support,  in  particular  the  Good  Governance  and  Development  
Contracts,  the  Commission  intends  to  give  stronger  emphasis  to  domestic  revenue 
mobilisation, including from natural resources. Fair and transparent tax systems are central to 
fostering  citizenship  and  state-building,  and  lead  to  enhanced  domestic  accountability  and 
political participation. While the EU is commited to providing predictable assistance through 
budget support, this assistance should complement (not substitute) the partner country's own 
efforts to mobilise domestic revenues. 

In  resource-rich  countries,  the  EU  should  reinforce  support  for  comprehensive  reform 
programmes  promoting  enhanced  natural 
transparency  and 
accountability, in line with EU policy on tackling the challenges in commodity markets and 
on raw materials4 . 

resource  governance, 

By assisting partner countries to address challenges in mobilising domestic revenues, the EU 
would contribute to improving self-reliance and reducing long-term dependence on aid.  

3. 

EU COORDINATED APPROACH 

The primary objective of an EU coordinated approach to budget support would be to increase 
the effectiveness of this modality in contributing to development and reform policies, and to 
provide coherent and  consistent responses to challenges  encountered. The EU  should    work 
with Member States in particular towards a "single EU Good Governance and Development 
Contract". Acting together would increase leverage on political and policy dialogue, as well 
as  the  impact  of  EU  and  Member  States'  bilateral  budget  support  on  partner  countries' 
development. Coordination should be guided by the following key principles: 

• 

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Sovereign  decision  making,  recognising  that  individual  EU  Member  States  need  to 
retain ministerial authority over budget support operations and that the EU needs to 
comply with its legally binding agreements and financial regulations. 

COM(2011) 25, 2.2.2011, and Council doc 7029/11, 10.3.2011. 

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• 

• 

• 

Systematic information exchange as a minimum, with coordination of responses and 
common approaches to budget support mechanisms being the ultimate goal.  
EU coordination should  be supportive of wider donor coordination and country-led 
coordination. 
Coordination  entails  the  involvement  of  both  HQ  and  field  level  and  builds  on 
existing bodies, mechanisms of cooperation as well as existing legal frameworks. 

In line with those principles, the EU should:  

• 

• 
• 

• 

• 

• 

• 

share  the  initial  assessment  of  the  commitment  of  the  partner  country  to  the  EU 
fundamental values with a view to finding a common approach;  
share, where relevant, diagnostics and assessments of eligibility conditions; 
harmonise,  as  far  as  possible,  risk  assessment  tools  and  promote  a  coordinated 
dialogue on mitigating actions; 
perform  joint  assessments  at  country  level  and  regular  joint  evaluations  of  budget 
support operations;  
ensure  a  high  level  of  expertise  for  effective  policy  dialogue  with  the  partner 
countries, including the use of delegated cooperation and transfer arrangements; 
engage  jointly  in  high  level  political  dialogue,  including  the  monitoring  of 
fundamental  values  and  the  appropriateness  of  pursuing  the  good  governance 
contract;  
jointly  communicate  to  local  stakeholders  the  disbursements  made  and  the 
compliance with disbursement conditions.  

4. 

DESIGN AND IMPLEMENTATION  

The  EU  should  assess  whether  pre-conditions  exist  to  entrust  Good  Governance  and 
Development Contracts to a partner country, i.e; whether fundamental values of human rights, 
democracy and rule of law or a clear path towards international standards exist and whether 
such a Contract could clearly act as a driver to accelerate this movement.  

In order to engage in a genuine high-level political and policy dialogue with countries eligible 
for  budget  support  in  general,  and  for  Good  Governance  and  Development  Contracts  in 
particular,  staff  resources  at  EU  Delegations  will  have  to  be  reviewed  nationally  and 
regionally, both in terms of level and expertise. To this end, the Commission will set up senior 
regional  teams,  at  Headquarters  and  in  Delegations,  with  the  participation  of  relevant 
Commission  services  and  the  EEAS.  These  teams  will  also  consult  with  Member  States  as 
appropriate.  

4.1. 

Budget support eligibility criteria  

i)  The  Commission  will  continue  to  apply  the  existing  three  eligibility  criteria  while 
reinforcing the following dimensions of each: 

4.1.1.  Stable  macro-economic  framework:  The  Commission  will  pay  particular  attention 
to whether fiscal policy and targets are consistent with macroeconomic stability and 
managed  according  to  sound  rules  of  fiscal  transparency  and  debt  sustainability. 
Domestic revenue mobilisation is also an important dimension that will be reinforced 
as  a  crosscutting  issue  within  the  macroeconomic  eligibility  criteria  (fiscal  policy) 

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and  public  finance  management  eligibility  criteria  (tax  administration).  The 
assessment will be in line with the EU policy on tax and development5.  

4.1.2.  National/sector policies and reforms. This should focus on sustainable growth and 
poverty  reduction  in  line  with  the  policy  proposed  in  the  Communication  "EU 
Development  policy  –  An  agenda  for  change:  increasing  the  impact  of  EU 
Development  Policy"6.  Moreover,  a  sound  social  fabric  requires  a  high  degree  of 
justice  and  fairness  in  tax  collection  and  expenditure  allocation  (pro-poor,  gender, 
and  children  issues),  effective  social  protection  and  progress  in  improving 
employment and quality of jobs.  

4.1.3.  Public financial management: Before launching a budget support programme, the 
Commission  will  assess  the  institutional,  legislative  and  regulatory  framework  and 
the  performance  of  the  public  financial  management  (PFM)  system  in  the  partner 
country  in  order  to  identify  a  baseline  upon  which  the  dynamic  approach  will  be 
based  and  the  key  reforms  will  be  addressed  during  implementation  by  policy 
dialogue, capacity building and disbursement conditions.  

The Commission may decide, on a case by case basis whether in a weak PFM environment it 
should be appropriate to require some short term measures selected from the partner country's 
own PFM reform strategy before starting budget support operations.  

The fight against corruption and fraud is a key dimension that should have greater prominence 
under  this  criterion.  The  Commission  will  pay  particular  attention  to  the  fight  against 
corruption  and  will  promote  a  stronger  use  of  anti-corruption  provisions.  Partner  countries 
need  to  be  actively  engaged  in  the  fight  against  corruption  and  fraud  and  be  equipped  with 
appropriate and effective mechanisms to prevent and detect fraud and corruption  (including 
adequate  inspections  authorities  and  judicial  capacity)  as  well  as  to  provide  adequate 
responses and effective sanction mechanisms. Failure to do so may lead to the suspension of 
EU budget support.  

ii) The Commission will also introduce a new eligibility criterion  

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6 

COM(2010) 163, 21.4.2010 and Council doc 11082/10, 14.6.2010. 
COM(2011) 637. 

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4.1.4.  Transparency  and  oversight  of  the  budget:  The  public  availability  of  budgetary 
information  is  essential  for  promoting  greater  scrutiny  of  the  budget.  Based  on  the 
most  relevant  budget  information,  the  Commission  will  define  an  "entry  point"  to 
assess this eligibility criterion. Countries will have to show that they either provide 
the relevant information to the public or are making progress in a short period to do 
so. This may also imply an assessment of the statistical system and in particular of 
the  quality  of  budget  data.  Moreover,  the  Commission  will  apply  a  dynamic 
approach by focusing on the implementation of a credible reform aimed at gradually 
achieving  full  disclosure  of  budgetary  information.  The  Commission  will  also  take 
into account the specific features of Fragile States and SIDS/OCTs in applying this 
criterion.  

4.2.  Managing risk  

Commission  services  and  where  appropriate  the  EEAS  will  develop  an  improved  risk 
management  framework  adapted  to  the  specific  risk  profile  of  budget  support,  covering 
political  governance,  macroeconomic  stability,  development 
financial 
management, corruption and fraud. This framework will be an important complementary tool 
in programming, designing and implementing programmes and to inform  policy dialogue. It 
will  identify,  assess  and  manage  risks  in  line  with  levels  judged  acceptable  by  the 
Commission.  Risk  response  and  mitigating  measures  will  be  proposed  according  to  the 
balance between risks and benefits.  

risk,  public 

4.3. 

How much EU budget support to provide to a partner country 

The  Commission  will  make  a  broad  qualitative  assessment  of  the  following  need  and 
performance criteria:  

• 

• 

• 

• 

• 

Financing  needs  of  the  partner  country  assessed  on  the  basis  of  its  medium  term 
fiscal framework and/or the national/sector development strategies. 
Commitment of the partner country to allocate national budget resources in line with 
development strategy and objectives. 
Effectiveness,  value  for  money  and  impact  of  the  specific  added  value  that  budget 
support will bring in achieving the partner country's policy objectives. 
Track  record  and  absorption  capacity  of  past  disbursements  and  how  effectively 
agreed objectives were achieved with budget support operations. 
Result  orientation  in  the  partner  country's  development  strategy  including  a 
monitoring system. 

4.4. 

Policy dialogue  

Policy dialogue should be consistent with the EU's overall political dialogue conducted with 
partner  countries.  The  Commission  will  strengthen  policy  dialogue  to  ensure  that  major 
reforms  are  discussed  and  fully  resourced,  objectives  are  identified  and  results  assessed. 
Policy measures and verifiable results should be at the core of a more strategic and focused 
dialogue.  

The scope of policy dialogue at country level will depend on the specific objectives of budget 
support  operations  and  will  include  eligibility  criteria.  The  Commission  will  continue  to 
broaden  its  access  to  the  expertise  necessary  for  effective  policy  dialogue  by  signing 

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delegated  cooperation  agreements  and/or  accepting  financial  transfer  arrangements  with 
Member States.  

4.5. 

Performance incentives and conditions 

Budget  support  should  continue  to  involve  a  combination  of  base  tranches  linked  to 
eligibility,  and  performance  tranches  linked  to  progress  against  indicators  in  addition  to 
eligibility criteria. The indicators should be drawn from each country's national and/or sector 
development  policy  or  reform  programme  and  should  generally  contain  a  mix  of  process, 
output  and  outcome  indicators.  Indicators  and  targets  should  be  reviewed  as  part  of  each 
annual review, and may be adapted in the light of lessons learned. For Good Governance and 
Development  Contracts,  conditions  may  be  attached  to  supporting  democracy  and  human 
rights.  

4.6. 

Predictability 

The  Commission  will  make  EU  budget  support  programmes  predictable  by  ensuring  that 
eligibility  conditions,  and  the  processes  for  their  assessment,  are  specified  as  clearly  as 
possible.  Furthermore  it  will  make  longer  term  commitments  in  countries  that  have 
demonstrated a strong track record in implementing budget support, taking account of lessons 
learned from the MDG Contracts. 

4.7. 

Strengthening domestic and mutual accountability  

Domestic and mutual accountability on budget support should be further enhanced by:  

– 

– 

– 

– 

Strengthening the openness, transparency and accountability of the budget process; 

Supporting a participatory budget support approach; 

Systematically integrating programmes to support national legislative and oversight 
bodies, as well as sub-national authorities and civil society organisations; 

Increasing  transparency  by  publishing  relevant  information  on  budget  support 
financing agreements and performance reviews. 

4.8. 

Capacity development 

Capacity  development  needs  will  be  assessed  systematically  to  enhance  government's 
capacity  to  implement  policies  and  deliver  services  to  final  beneficiaries;  to  promote  the 
active  engagement  of  all  domestic  stakeholders  and  to  strengthen  the  national  statistical 
system.  The  Commission  will  provide  support  to  capacity  development  based  on  demand, 
linked to clear outputs, and through harmonised and aligned initiatives.  

4.9.  Monitoring, evaluation and communication 

The  partner  country  should  have  a  credible  and  functioning  system  in  place  for  monitoring 
and  evaluation  (M&E)  of  results.  If  weaknesses  are  identified  actions  should  be  agreed  to 
strengthen  the  M&E  system.  The  Commission  will  pay  particular  attention  to  the  following 
elements: 

• 

Institutional setup of an M&E system. 

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• 
• 

• 

Existing M&E plan linked to policy development objectives and key processes. 
Quality,  regularity  and  reliability  of  data,  including  official  statistics, 
information  systems,  indicators  (input,  process,  output  and  outcome)  and 
reporting documents. 
Capacity development to support M&E functions.  

The  M&E  system  should  contribute  to  strengthening  the  voice  and  legitimacy  of  national 
stakeholders  in  the  partner  country's  budgetary  process  and  ensuring  that  factual  and 
verifiable information on budget support operations is placed in the public domain.  

The  EU  should  communicate  better  on  both  EU  and  bilateral  budget  support,  based  on 
analytical  work,  performance  assessment  frameworks,  the  results  of  actual  evaluations  and 
lessons learned. 

5. 

CONCLUSIONS 

The Commission calls on the Council to endorse the proposed Communication, which seeks 
to: 

• 

• 

in  delivering 
make  EU  budget  support  more  efficient  and  effective 
development  results,  and  to  endorse  these  proposals,  in  relation  to  bilateral 
budget support, as a means to  
equip the EU and Member States with an EU Coordinated Approach on Budget 
Support. 

The  guiding  principles  set  out  in  this  Communication  will  be  incorporated  in  programming 
and implementing EU budget support.  

EN 

11 

   EN