COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT
Date: 2011-12-07
Institutions: European Commission
Subjects: European neighbourhood policy, co-financing, cross-border cooperation, democratisation, development policy, equal treatment, financial aid, human rights

EUROPEAN COMMISSION 

Brussels, 7.12.2011 
SEC(2011) 1466 final 

COMMISSION STAFF WORKING PAPER 

IMPACT ASSESSMENT 

Accompanying the document 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

laying down general provisions establishing a European Neighbourhood Instrument 

{COM(2011) 839 final} 
{SEC(2011) 1467 final} 

 
 
 
 
  
 
TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

Procedural issues and consultation of interested parties .............................................. 4 

Organisation and timing............................................................................................... 4 

Consultation and expertise  .......................................................................................... 4 

Impact Assessment Board ............................................................................................ 6 

Problem definition........................................................................................................ 6 

The problem requiring action and the scope of the instrument regulation .................. 6 

Review of evaluation reports ....................................................................................... 8 

2.2.1.  Results of mid-term review of the financial instruments for external actions (2009) . 8 

2.2.2.  Study on legal instruments (2011)……………………………………………………9 

2.2.3.  Court of Auditors Report on the Southern Caucasus ................................................. 10 

2.3. 

2.4. 

2.5. 

2.6. 

3. 

3.1. 

3.2. 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

5. 

5.1. 

5.2. 

5.3. 

6. 

Review of lessons learnt............................................................................................. 10 

The underlying drivers of the problem....................................................................... 12 

Legal base for EU action............................................................................................ 16 

EU value added .......................................................................................................... 16 

Objectives................................................................................................................... 17 

Policy framework and objectives ............................................................................... 17 

Consistency with external action priorities ................................................................ 18 

Consistency with other EU policies ........................................................................... 19 

Policy options............................................................................................................. 21 

Option 0: "No EU action" .......................................................................................... 21 

Option 1: “No change”............................................................................................... 21 

Option 2: "Adapting the current set-up" .................................................................... 21 

Option 3: "Table a completely new instrument"........................................................ 25 

Analysis of impacts .................................................................................................... 25 

Likely economic, social and environmental impacts of each of the options ............. 25 

Impacts on external action, in particular on Policy Coherence for Development ..... 28 

Impact in terms of management / implementation modalities ................................... 28 

Comparing the options ............................................................................................... 28 

6.1.  Weighing of positive and negative impacts per option.............................................. 28 

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6.2. 

6.3. 

7. 

7.1. 

7.2. 

Trade-offs and synergies associated with the options................................................ 29 

Preferred option.......................................................................................................... 29 

Monitoring and evaluation ......................................................................................... 30 

Core indicators of progress towards objectives ......................................................... 30 

Outline for monitoring and evaluation arrangements ................................................ 31 

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1. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

1.1. 

Organisation and timing 

The  drafting  of  the  Impact  Assessment  (IA)  for  the  European  Union  (EU)  external  action 
instruments  for  the  period  2014-20201,  including  this  document,  has  been  coordinated  by  a 
Task Force composed by services in charge of EU external action and the Legal Service. The 
drafting  teams  have  duly  taken  into  consideration  the  consultations,  reviews  and  studies 
mentioned  in  Section  2  and  have  liaised  with  various  European  Commission  (hereafter  the 
Commission) services to ensure consistency with other EU policies. The Task Force met with 
the  drafting  team  in  charge  of  this  Impact  Assessment  on  7  June,  30  June,  14  July  and  2 
August 2011 for organisational and quality-check purposes. 

The work on the European Neighbourhood Instrument (ENI) was led jointly by the European 
External Action Service (EEAS) and the Commission. A specific “European Neighbourhood 
Instrument Impact Assessment Working Group” involving a number of services was set up in 
May  2011  to  provide  inputs  and  comments  on  the  draft  IA.  The  meetings  of  the  Group 
allowed for early consultations with the relevant EEAS and Commission services before the 
draft IA was presented to the Inter-service Impact Assessment Steering Group monitoring the 
preparation of IAs for all external action instruments. The Steering Group, composed by the 
members  of  the  Task  Force  and  representatives  of  the  relevant  Commission  Directorates 
General and the Secretariat General as well as of the EEAS, was launched on 22 June 2011. It 
met twice, on 13 and 26 of July 2011. 

The  IA  was  submitted  to  the  IA  Board  on  5  August  2011.  The  review  of  this  Impact 
Assessment by the Impact Assessment Board is scheduled on 14 September 2011. 

In  line  with  article  27  of  the  Financial  Regulation  (Council  Regulation  (EC,  Euratom)  No 
1605/2002) and article 21 of the Implementing rules of the Financial Regulation (Commission 
Regulation  (EC,  Euratom)  No  2342/2002),  the  present  impact  assessment  is  the  ex-ante 
evaluation of the European Neighbourhood Instrument (ENI). 

1.2.  Consultations and expertise  

A broad consultation process underpins the IA and the legislative proposal on the European 
Neighbourhood  Instrument.  This  process  consisted  of  the  Public  consultation  on  external 
funding carried out for all the EU external action instruments on the one hand, and of specific 
consultations  held  as  part  of  the  Strategic  review  of  the  European  Neighbourhood  Policy 
(ENP)  and  those  on  the  Cross-Border  Cooperation  (CBC)  on  the  other  hand.  Additionally, 
consultations were held on the future of EU development policy. 

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The  instruments  are  the  following:  Internal  Agreement  for  the  11th  European  Development  Fund,  Development 
Cooperation Instrument, Instrument for Pre-Accession assistance, European Neighbourhood Instrument, Instrument 
for Stability, Instrument for Nuclear Safety Cooperation, European Instrument for Democracy and Human Rights, 
Partnership  Instrument  and  the  instruments  for  the  EU-Greenland  Partnership.  The  Macro-Financial  Assistance 
instrument,  the  Common  Foreign  and  Security  Policy,  the  Humanitarian  aid  instrument  and  the  Civil  Protection 
mechanism are not part of this joint exercise. 

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Public consultations 

Public Consultation on funding for EU external action 

The Commission held a public consultation on future funding for EU external action between 
26 November 2010 and 31 January 2011. This process was based on an online questionnaire 
accompanied  by  a  background  paper  ‘What  funding  for  EU  external  action  after  2013?’ 
prepared  by  the  Commission  and  EEAS.  The  220  contributions  received  in  response  to  this 
public consultation reflect a broad and diverse spectrum representing the variety of structures, 
views and traditions characterising the external action community.  

The  majority  of  respondents  confirm  that  EU  financial  interventions  provide  a  substantial 
added value in the main policy areas supported through EU financial instruments for external 
action2.  The  criterion  of  EU  added  value  is  put  forward  by  many  respondents  as  the  main 
driver for the future: the EU should exploit its comparative advantage linked to its global field 
presence,  its  wide-ranging  expertise,  its  supranational  nature,  its  role  as  facilitator  of 
coordination and the economies of scale.  

Nearly all respondents support a more differentiated approach tailored to the situation of the 
beneficiaries  and  based  on  sound  criteria,  to  be  used  in  order  to  increase  the  impact  of  EU 
financial instruments. There is also wide support for considering conditionality based on the 
respect for human rights, minorities, good governance and diversity of cultural expressions, or 
on the quality of beneficiaries’ policies and their ability and willingness to implement them.  

Most  respondents  agree  that  joint  programming  and  co-financing  with  Member  States  can 
increase the impact and the coherence of EU external action, simplify the delivery of aid and 
reduce the overall transaction costs.  

Consultations in the context of ENP strategic review 

The EEAS held specific consultations with representatives of EU Member States and Partner 
countries covered by the ENP as part of the Strategic review of the policy, launched in July 
2010.  

The  consultations  included  the  financing  of  the  ENP  notably  through  the  European 
Neighbourhood  and  Partnership  Instrument  (ENPI),  alongside  the  issues  of  the  long-term 
ENP vision and the ENP medium-term objectives. The ENP Strategic review resulted in the 
Joint Communication of the High Representative of the EU for Foreign Affairs and Security 
Policy and the European Commission “A new response to a changing Neighbourhood” (COM 
(2011) 303) adopted on 25 May 2011.  

The consultations revealed that the ENPI was seen as a step change in the way EU assistance 
was delivered. However, the need for further refinement was also recognized. Many Member 
States underlined the importance of improved coherence between the policy and the financial 
assistance provided by the instrument. Several respondents highlighted that allocations should 
be  based  on  performance.  Many  also  stressed  the  importance  of  making  financial  support 
faster, more efficient and more flexible in responding to emerging needs. A group of Member 

2 

i.e. peace and security, poverty reduction, humanitarian aid, investing in stability and growth in enlargement and 
neighbourhood  countries,  tackling  global  challenges,  promoting  EU  and  international  standards and  values,  and 
supporting growth and competitiveness abroad. 

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States  advocated  decentralised  implementation,  and  some  called  for  strengthening  EU 
Delegations.  

Partner  countries  underlined  the  need  to  accompany  economic  integration,  market  opening 
and regulatory convergence with appropriate financial support. The importance of promoting 
foreign investment was also emphasized.  

There was a unanimous perception that ENP Action Plans had been very useful as a central 
policy tool. There was also a strong demand for successor documents to better steer EU and 
ENP partners’ joint efforts and facilitate a more effective use of resources from the national 
and  EU  budgets.  This  involves  more  focus,  clearer  sequencing  and  more  measurable 
benchmarks.  

Stakeholder consultations on Cross-Border Cooperation 

Specific  consultations  on  CBC  have  taken  place  with  all  stakeholders.  The  process  was 
launched  during  a  CBC  Conference  in  Brussels  in  February  2011.  The  stakeholders  were 
consequently  consulted  on  the  future  regulatory  framework  (including  on  the  CBC 
Implementing  Rules)  on  the  basis  of  a  questionnaire  circulated  in  May/June  2011.  The 
outcomes  reflect  the  need  to  adapt  some  provisions  to  strengthen  efficiency  of  the  future 
CBC.  The  aim  of  the  suggested  changes  is  to  better  reflect  integration  between  EU  foreign 
policy  priorities  with  the  EU  Cohesion  Policy,  especially  by  further  approximation  of  the 
CBC on external EU borders to the European Territorial Cooperation (ETC) rules.    

Public consultations on “EU development policy” 

In addition, the Commission launched a Green Paper “EU development policy in support of 
inclusive growth and sustainable development” with a public consultation from 15 November 
2010 to 17 January 2011. Many respondents underlined that ODA3 constitutes only a fraction 
of funding for development, to be seen as a complement to domestically mobilised resources, 
foreign investments, trade and remittances. A demand was also made for greater coherence in 
EU  development  policy  especially  with  regards  to  middle-income  countries.  While  joint 
programming  of  assistance  was  endorsed  in  principle,  it  should  be  introduced  gradually 
starting with countries where it would yield demonstrable added value.  

1.3.  Impact Assessment Board 

The  Impact  Assessment  Board  meeting  took  place  on  14.09.2011.  The  opinion  received  by 
the  board  was  taken  fully  into  account  and  the  Impact  Assessment  Report  as  well  as  the 
Impact Assessment Report Summary were modified accordingly. 

2. 

PROBLEM DEFINITION 

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Official Development Aid  

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2.1. 

The problem requiring action and the scope of the instrument regulation 

The Treaty on European Union (TEU) in its article 8 provides specifically for developing by 
the  EU  of  a  special  relationship  with  neighbouring  countries,  aiming  to  establish  an  area  of 
prosperity and good neighbourliness at the EU’s borders, founded on the values of the Union 
and characterized by close and peaceful relations based on cooperation. This dedicated article, 
introduced by the Lisbon Treaty, emphasises the growing importance of the EU relationship 
with its neighbours. 

The  EU  policy  towards  its  neighbours,  the  ENP,  was  launched  in  2004  following  the  EU 
enlargement in the same year, in order to avoid the emergence of new dividing lines between 
the enlarged EU and its neighbours and to strengthen the prosperity, stability and security of 
all. The ENP is addressed to 16 partners to the East and South of the EU’s borders, notably to 
Algeria,  Armenia,  Azerbaijan,  Belarus,  Egypt,  Georgia,  Israel,  Jordan,  Lebanon,  Libya,  the 
Republic  of  Moldova,  Morocco,  the  occupied  Palestinian  territory,  Syria,  Tunisia  and 
Ukraine. The ENP is supported through a dedicated instrument, the ENPI, which covers the 
16 above-mentioned partners and Russia. 

Within  the  ENP  the  EU  offers  the  neighbours  a  privileged  relationship,  building  upon  a 
mutual  commitment  to  values  such  as  democracy  and  human  rights,  rule  of  law,  good 
governance,  market  economy  principles  and  sustainable  development.  The  policy  also 
provides  for  political  association  and  deeper  economic  integration,  increased  mobility  and 
enhanced people-to-people contacts. On the basis of jointly agreed priorities, the EU supports 
partners in implementing reforms to improve their standards of democracy and human rights, 
to increase their access to the EU’s single market, to improve the environment and to step up 
their cooperation with the EU on issues such as climate change, energy, transport, Information 
and Communication Technologies (ICT) and migration.  

Since  the  launch  of  the  ENP  a  number  of  important  developments  have  taken  place,  in 
particular: 

• 

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deepening  of  relationship  with  the  neighbours,  notably  through  the  launch  of 
Association  Agreement  negotiations  in  the  East  and  processes  to  upgrade  relations 
(e.g. statut avancé) in the South; 

related to the above, the progressive differentiation of partners; 

qualitative  change  of  the  partnership  with  Russia,  with  the  “Partnership  for 
Modernisation” launched in 2010; 

launch  of  the  regional  dimensions:  the  Union  for  the  Mediterranean,  the  Eastern 
Partnership and the Black Sea Synergy, the  EU Strategy for the Baltic Sea and the 
EU policy for the Arctic region; 

stability concerns in the ENP region (notably Middle East, Belarus, Georgia); 

democratic  transition  processes  initiated  in  several  countries  in  the  Southern 
Neighbourhood. 

This  evolving  relationship  called  for  a  new  response  that  was  elaborated  as  a  result  of  the 
Strategic review of the ENP. The Joint Communication of the High Representative of the EU 

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for Foreign Affairs and Security Policy and the European Commission “A new response to a 
changing  Neighbourhood”  of  25  May  2011  outlines  the  new  ENP  vision  and  builds  on  the 
Joint Communication “A Partnership for Democracy and shared Prosperity with the Southern 
Mediterranean”  adopted  on  8  March  2011.  The  new  approach  provides  notably  for  greater 
support  to  partners  committed  to  building  democratic  societies  and  undertaking  reforms,  in 
line  with  a  “more  for  more”  principle,  and  therefore  for  a  greater  differentiation.  The 
associated principle of “mutual accountability” in turn implies the EU commitment to deliver 
on  policy  offers  made,  notably  in  the  field  of  market  access  and  mobility.  The  Eastern 
Partnership  Summit  to  take  place  in  September  2011  in  Warsaw  will  offer  a  possibility  to 
further strengthen the relationship with the partners in the East. 

Neighbours  committed  to  these  objectives  will  be  offered  closer  economic  integration  and 
stronger  political  and  sector  cooperation  with  a  particular  focus  on  climate  change  and  the 
environment, energy, transport and technology, knowledge and innovation. Enhanced support 
to  partners  engaged  in  credible  reforms  will  come  in  various  forms,  including  increased 
funding,  greater  market  access,  increased  support  to  investments,  support  for  free  and 
uninterrupted  access  to  information  and  communication  means  and  greater  facilitation  of 
mobility.  Within  the  renewed  ENP  there  is  also  more  emphasis  on  rural  development  and 
strengthening of social, economic and territorial cohesion.  

Financial  support  to  the  Neighbours  is  provided  notably  through  the  ENPI.  Set  up  by 
Regulation  1638/2006  of  24  October  2006,  the  instrument  had  been  endowed  with  an 
envelope  of  EUR  11.8  billion  for  the  period  2007-2013  and  covers  the  16  ENP  partners  as 
well as Russia. 

The  core  of  the  financial  intervention  in  the  Neighbourhood  is  delivered  through  country 
programmes  (about  75%),  which  foster  ownership,  allow  for  coherence  of  EU  action  with 
country  policies  and  ultimately  enhance  their  impact.  The  rest  is  delivered  through  multi-
country programmes and through specific CBC programmes targeting beneficiaries from the 
EU  and  neighbours’  border  regions.  The  CBC  constitutes  a  unique  example  of  external 
cooperation where partners have full ownership and participate on an equal footing with EU 
Member States in the decision-making process and setting up joint projects over the external 
EU border, with a single set of rules. 

The current ENPI support is provided through a number of aid modalities, including budget 
support, project approach, twinning with Member States’ administrations, technical assistance 
and  blending  mechanisms.  It  brings  under  the  same  umbrella  bilateral,  regional  and  Cross-
Border  Cooperation  with  countries  formerly  dealt  with  through  two  separate  regulations 
(TACIS4 and MEDA5). 

2.2.  Review of evaluation reports 

As  a  relatively  new  instrument,  the  ENPI  as  a  whole  has  not  yet  been  subject  to  dedicated 
evaluations.  However  the  Mid-term  review  of  the  instrument,  featuring  lessons  learned  as 
well as some assessments, outline the major aspects that need to be considered in the future, 
to accompany the revised policy framework.  

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Technical Aid to the Commonwealth of Independent States  
MEDA programme used to be  the main financial instrument for implementing the Euro-Mediterranean Partnership 

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2.2.1.  Results of Mid-term review of the financial instruments for external actions (2009) 

The  ENPI  Mid-term  review  carried  out  in  2009  concludes  that  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  scope  of  the  partnerships  between  the  EU  and  the  partners,  and  their  budget 
reflects  the  “ambition”  of  such  partnerships.  Multi-country  programmes  have  been 
instrumental in supporting ENP flagship initiatives and the ENP regional dimensions, both in 
the South and in the East. 

As  for  implementation  issues,  the  ENPI  has  at  its  disposal  a  broader  range  of  tools  than  its 
predecessors MEDA and TACIS and this allows for a more effective and efficient delivery of 
assistance.  Through  implementation  mechanisms  such  as  twinning  and  TAIEX6,  EU  public 
sector  expertise  is  made  available  for  institution  building  to  partners  engaged  in  legislative 
approximation  and  regulatory  alignment.  Budget  support  operations  are  instrumental  to 
promote the reform agenda agreed in the context of the ENP Action Plans and the monitoring 
of such operations allows for a deeper policy dialogue with the partners.   

The Mid-term review concludes that the provisions of the ENPI Regulation appear adequate 
to sustain cooperation with neighbouring countries provided that the following two issues are 
addressed.  

The  first  one  concerns  the  issue  of  “revolving  funds”,  the  possibility  to  use  reflows  from 
previous operations of the International Financial Institutions (IFIs) in order to strengthen the 
Facility for Euro-Mediterranean Investment and Partnership (FEMIP) and the Neighbourhood 
Investment  Facility  (NIF)  to  which  the  ENPI  contributes.  The  ambiguity  of  the  ENPI 
Regulation on this issue and the resulting lack of the use of the reflows hamper the Union’s 
ability to support private sector operations.  

Secondly, the Review considers the financial envelope for the ENPI to be very tight and not 
allowing  the  support  of  new  and  ambitious  regional  initiatives  while  simultaneously 
responding to “protracted” crisis situations.  

The  Mid-term  review  was  finalised  in  2009  and  therefore  could  not  take  into  account  new 
developments that have happened since and the new policy context. 

2.2.2.  Study on legal instruments (2011) 

The study on Legal Instruments conducted in 2011 identified many positive results that come 
from the evaluations of the instruments preceding the ENPI (MEDA and TACIS) but that are 
also  relevant  to  the  ENPI.  It  appears  that  the  support  provided  has  made  a  positive 
contribution to the development of trade relationships between the EU and the ENP partners, 
and to the development of the private sector. Some positive results have been achieved in the 
water and social sectors and in the support to Civil Society. 

to 

the  study,  budget  support 

is  successfully  supporting  comprehensive 
According 
structural/sector reforms, avoiding the gaps and “stop-go” effect of a project approach. Whilst 
this  requires  stronger  public  financial  management  (PFM),  budget  support  does  also 

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Technical Assistance and Information Exchange instrument 

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contribute,  when  successful,  to  improvements  in  the  PFM.  In  particular,  budget  support 
appears  to  be  efficient  when  combined  with  policy  dialogue  and  capacity  building.  It  has 
contributed  to  the  formulation,  implementation  and  acceleration  of  reforms  that  were 
nationally owned and considered as important by the EU. Other aid delivery mechanisms such 
as the project approach or twinning remain very effective to support reforms. They can also 
be successfully deployed in combination with budget support. 

Mixed  results  were  noted  in  cases  where  interventions  were  unsustainable,  in  particular 
because of the scarcity of financial resources available.  

From the findings of the study, the following points have emerged that could be useful for the 
design of the future assistance to the Neighbourhood: 

(1) There  seem  to  be  indications  of  limited  coherence  between  the  programming  process  and 
implementation.  No  evidence  was  found  that  all  the  priorities  expressed  in  the  country 
strategies were subsequently carried throughout the programming chain and assistance. 

(1) 

Budget support is bringing good results in support of comprehensive structural/sector 
reforms and allows for avoiding the gaps and “stop-go” effect of a project approach. 
Other  aid  delivery  mechanisms  such  as  projects  or  twinning  remain  effective  in 
targeted reforms. 

(2) Respecting ownership is key to ensuring success. 

2.2.3.   Court of Auditors report on the Southern Caucasus 

The  Special  Report  of  the  Court  of  Auditors  on  the  ENPI  in  the  Southern  Caucasus7 
highlights challenges related to the programming process. The Report states that the lengthy 
programming and design process does not suit the fast changing environment of the Southern 
Caucasus, thus endangering the relevance of the assistance. It notes further that the usefulness 
of the programming work is reduced by insufficient prioritisation and weak links between the 
ENP Action Plans and Country Strategy Papers and National Indicative Programmes. It also 
concludes  that  the  areas  selected  for  assistance  do  not  derive  clearly  enough  from  the 
programming documents.  

The  key  recommendations  include:  further  prioritisation  during  the  programming  process, 
with the guiding objective of offering ENP Partner Countries the prospect of an increasingly 
closer  relationship  with 
the  strategic  documents; 
the  EU;  rationalizing  (merging) 
strengthening  the  links  between  strategic  programming  documents  and  annual  action 
programmes and avoiding successive cycles of approval.  

The  above  assessment  can  be  considered  equally  relevant  for  the  programming  process  for 
most of the ENP Partners. 

2.3.  Review of lessons learnt 

In  terms  of  lessons  learnt,  a  number  of  issues  have  emerged  since  the  launch  of  the  ENPI, 
related directly or indirectly to the design of the instrument. A long programming process and 

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Court of Auditors Special Report No 13/2010: “Is the new European Neighbourhood and Partnership Instrument 
successfully launched and achieving results in the Southern Caucasus (Armenia, Azerbaijan and Georgia)?” 

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incomplete alignment of the financial assistance with the policy and priorities specified in the 
ENP  Action  Plans  and  other  relevant  documents  have  often  been  pointed  at  as  major 
challenges to be addressed in the future. The split of the ENPI allocation between the East and 
the  South  (programming)  has  been  a  delicate  matter  overshadowing,  on  a  number  of 
occasions,  major  policy  issues.  Coordination  and  coherence  with  interventions  under  other 
instruments are important issues. Provisions allowing for joint activities with partners/regions 
outside the geographical scope of the ENPI have been instrumental to implement a number of 
activities and should be maintained. 

Horizontal  issues  that  are  of  much  relevance  to  the  ENPI  include  flexibility  and  ability  to 
react  to  crisis  and  unforeseen  situations.  In  the  Neighbourhood,  addressing  protracted  crisis 
remains  one  of  the  key  challenges.  Any  solution  within  the  ENPI  will  need  to  be  coherent 
with  the  political  choices  on  the  future  Instrument  for  Stability  (IfS)  (notably  its  scope  and 
size)  and  its  relationship  with  geographic  instruments.  The  current  mechanisms  for  rapid 
interventions in case of crises have functioned well and should be further strengthened. 

Among the objectives of support 29 thematic areas of cooperation are specified in the ENPI 
Regulation.  While  this  allows  for  flexibility,  such  an  approach  has  led  to  a  dispersion  of 
efforts,  fragmentation  of  aid  and  a  blurred  vision  of  the  ENP.  More  prioritisation  would 
facilitate better coherence between assistance and political ambitions in key fields. 

The  limited  flexibility  of  the  ENPI  to  re-allocate  funds  has  sometimes  proved  to  be  an 
obstacle in responding to emerging needs. The current programming procedures make the re-
allocation  of  funds  outside  the  Mid-term  review  relatively  difficult  and  therefore  limit  the 
possibility  of  applying  differentiation  between  countries  on  the  basis  of  their  actual  merits. 
The  current  programming  process  is  thus  not  well  suited  to  apply  the  “more  for  more” 
principle that is central in the new ENP vision. The introduction of the Governance Facility 
was an attempt towards applying performance incentives through ex post financial top-ups to 
best  performers.  However,  the  ENP  review  has  highlighted  that  the  financial  incentives 
provided in this form have not been a driver for change.  

Consideration needs to be given to how monitoring can be enhanced, including with regard to 
strengthening  the  link  between  policy  dialogues  and  assistance  programmes  (including 
technical  assistance).  It  is  furthermore  important  that  the  ambition  of  the  policy  is  matched 
with adequate tools to implement it. Consideration should also be given to how the technical 
assistance/TAIEX can be developed, possibly through extending the scope of the mechanism 
to include elements such as training and case studies. Furthermore, cooperation in the field of 
statistics should be enhanced.  

ENPI  assistance  has  been  used  to  leverage  loans  from  financial  institutions  to  finance 
infrastructure  investment  projects  and  to  support  the  private  sector  through  loans  and  risk 
capital operations. This is done with the  European Investment Bank (EIB) in the context of 
the  FEMIP  and  with  the  EIB,  the  European  Bank  for  Reconstruction  and  Development 
(EBRD) and other European financial institutions in the context of the NIF. The cooperation 
with IFIs should be further enhanced through the use of innovative tools. The use of revolving 
funds could help strengthen the impact of this cooperation. 

Addressing competition issues for better working markets and institutions outside the EU is 
another important issue. Along with other policy objectives such as a well-functioning public 

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administration  and  an  independent  judiciary  safeguarding  the  enforceability  of  contracts,  an 
effective competition policy creates a business environment facilitating economic growth.  

Two main political initiatives have shaped the regional cooperation in the Neighbourhood: the 
Eastern  Partnership  (EaP)  in  the  East  and  the  Union  for  the  Mediterranean  (UfM)  in  the 
South.  The  EaP  aims  to  accelerate  political  association  and  further  economic  integration 
between the EU and the six EaP countries and within the EaP region, and to support political 
and socio-economic reforms in these countries. At the heart of the initiative is the EU offer to 
significantly  upgrade  contractual  relations  with  partners  by  concluding  Association 
Agreements,  where  possible  including  Deep  and  Comprehensive  Free  Trade  Areas.  The 
multilateral  approach  has  proven  successful  in  supporting  reform  through  the  exchange  of 
best practice on subjects of common interest, such as good governance, economic integration, 
energy efficiency and contacts between people. The UfM is an important initiative to foster 
regional  cooperation  with  and  within  the  southern  Neighbourhood,  with  key  initiatives 
focussing for instance on the de-pollution of the Mediterranean Sea and the establishment of 
maritime  and  land  highways  which  connect  ports  and  improve  rail  connections  to  facilitate 
movement of people and goods. Nevertheless, the past years have shown that some measures 
need to be taken to revitalize this initiative and to enhance cooperation in these key areas. In 
the future, it is important to continue to promote and support an efficient regional dimension, 
including  through  the  deployment  of  transnational  ICT  services  and  infrastructures.  The  8th 
March  Communication  establishing  “A  Partnership  for  Democracy  and  Shared  Prosperity 
with the Southern Mediterranean” is a step in that direction. 

Globally,  regional  cooperation  has  proved  its  added  value  notably  in  fostering  regional 
synergies  and  networks  in  crucial  areas  of  common  concern  such  as  environment,  climate 
change, energy, sustainable development, Small and Medium Enterprise (SME) development, 
media and freedom of expression, research, ICT and youth mobility. Regional cooperation has 
also  proved  very  effective  when  being  conducted  at  intraregional  level  (South  and  East):  a 
number  of  programmes  are  “twins”  (civil  protection,  private  investments  promotion)  with  a 
southern  and  an  eastern  focus.  The  CBC  has  also  played  an  important  role,  and  the 
mechanism of split commitments used with CBC programmes has proved useful.  

2.4.  The underlying drivers of the problem 

Policy problems 

The changing relationship with the neighbours and developments since the establishment of 
the ENP have been analysed and assessed in the framework of the ENP Strategic review that 
resulted in the new policy orientations outlined in section 2.1. The new ENP vision calls for 
adapting the current framework through which support to the ENP partners is provided.  

While the ENPI has been widely recognized as a successful instrument to accompany the EU 
policy towards its neighbours, the renewed ENP policy as well as assessments, the Mid-term 
review and lessons learned point towards a number of issues that should be reconsidered in 
the future to allow for an even more effective EU response. 

Specific problems linked to the instrument 

Application of the “more for more” principle 

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The “more for more” principle is the key element of the renewed Neighbourhood Policy, as 
enshrined in the Joint Communication “A new response to a changing Neighbourhood”. The 
new approach provides for a much higher level of differentiation among partners, in line with 
their commitment to the jointly agreed values and objectives, and notably to the partnership 
with EU focussed on democracy and shared prosperity. Partners that go further and faster with 
reforms notably those related to democratic standards and rule of law will be able to count on 
greater support from the EU. This approach will already be applied in the allocation of funds 
to  some  partner  countries  under  the  current  financial  perspectives,  in  the  framework  of  the 
SPRING  package  (“Support  for  Partnership,  Reforms  and  Inclusive  Growth”)  for  Southern 
Mediterranean, funded by an additional allocation to the ENPI. 

The  new  vision  goes  beyond  funding,  with  an  offer  of  deeper  political  association  and 
economic  integration  for  those  who  credibly  follow  the  path  of  democracy  and  a  reforms 
agenda.  The  “more  for  more”  principle  and  mutual  accountability  therefore  needs  to  be 
reflected in all aspects of the relationship with the neighbours, especially with regard to the 
bilateral  cooperation.  Financial  incentives  for  most  ambitious  reformers  feature  as  an 
important  element  of  the  new  approach  and  as  a  policy-driven  instrument,  the  future  ENI 
should reflect this key principle, notably as regards programming and allocation of support to 
the partners.  

The current ENPI Regulation in its article 7b indicates the key parameters taken into account 
in the allocation of support. While it provides some room for modulating initial allocations on 
the basis of ambitions and achievements of the partners, it only allows for limited flexibility 
in  varying  the  allocations,  essentially  following  a  mid-term  review  of  the  programming 
process.  The  current  system  therefore  constrains  the  possibility  to  apply  differentiation  and 
the “more for more” approach in real time on the basis of specific progress indicators. These 
provisions  have  so  far  proved  of  limited  impact  in  terms  of  triggering  reforms  and 
democratization  process.  The  use  of  Governance  Facility  attributed  to  some  ENP  countries 
and rewarding performance through ex post financial top-ups has not been a sufficient driver 
for change. 

Complexity and length of the programming process  

The procedure for the programming process is outlined in article 7a of the ENPI Regulation 
(for  bilateral  and  multi-country  programmes)  and  in  article  9  for  the  Cross-Border 
Cooperation.  Article  7  provides  for  Strategy  Papers  and  Indicative  Programmes  for  country 
and multi-country programmes. The Strategy Papers and Indicative Programmes shall reflect 
the policy framework and the jointly agreed Action Plans or other equivalent documents that 
are the key point of reference for setting assistance priorities. 

The current programming process includes a number of broad consultations and many other 
procedural  steps.  In  practice,  with  the  current  set-up,  for  all  programmable  external  action 
instruments  the  programming  takes  on  average  18  months.  The  priorities  identified  through 
the programming are the basis for the assistance that follows.  

The  scope  of  the  programming  documents  has  been  another  aspect.  The  current  Country 
Strategy Papers under the ENPI follow the format used for development cooperation. As such 
they provide for an extensive analysis of the situation in a given country in a number of areas 

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which adds to the length of the process. In the case of the Neighbourhood however the reality 
is  different  and  the  country  analysis  for  most  partners  (countries  that  have  concluded  an 
Action Plan or an equivalent set of joint objectives with the EU) is described annually through 
dedicated Progress Reports making the general part of the Country Strategy Paper redundant. 
Programming documents tend to include a wide range of priorities. This is a reflection of the 
length  of  the  programming  process,  and  an  attempt  to  provide  flexibility  for  the 
implementation that intervenes at a much later stage.   

As  recommended  by  the  Special  Report  of  the  Court  of  Auditors  referring  to  Armenia, 
Azerbaijan and Georgia, linkages should be strengthened between the ENP Action plans and 
the  relevant  programming  documents.  There  is  therefore  both  need  and  opportunity  to 
streamline, shorten and better focus the programming process, notably for ENP partners with 
Action Plans or equivalent documents that identify jointly agreed priorities between EU and 
ENP  partners.  The  new  programming  documents  should  be  better  aligned  and  fully  reflect 
these priorities.  

Scope of the instrument 

The scope of the ENPI is defined in article 2 of the Regulation. While article 2.1 refers to the 
implementation  of  partnership  and  cooperation  agreements,  association  agreements  or  other 
relevant  agreements,  promotion  of  good  governance  and  equitable  social  and  economic 
development, article 2.2 is a very broad list of 29 thematic areas of cooperation referred to in 
a detailed manner and on an equal footing8. The programming reflects this wide approach and 
in a number of cases coherence between the policy and cooperation has been a challenge. 

The  current  set  up  of  29  thematic  areas  of  cooperation  offers  very  little  visibility  of  the 
objectives  and  the  focus  of  the  ENP.  They  result  to  a  large  extent  from  the  willingness  of 
various  stakeholders  to  include  all  the  possible  specific  fields  of  cooperation  that  could  be 
supported  under  broader  provisions  of  the  Regulation,  while  maintaining  the  necessary 
flexibility for the programming process. The future legislative proposal for the ENI offers the 
possibility  to  better  streamline  the  scope  of  the  instrument  while  maintaining  its  current 
flexibility, notably through regrouping the current set of 29 thematic areas into a few generic 
areas of cooperation encompassing specific objectives of cooperation9 

Partly outdated implementation provisions and lack of coherence between the external 
instruments  

The  implementation  section  of  the  current  ENPI  Regulation  is  outdated  in  some  parts  and 
therefore  no  longer  adequately  reflects  the  way  assistance  in  the  Neighbourhood  is 

8   Examples of thematic areas referred to in article 2: supporting cooperation aimed at protecting historical and cultural 
heritage and promoting its development potential, including through tourism; supporting administrative cooperation to 
improve  transparency  and  the  exchange  of  information  in  the  area  of  taxation  in  order  to  combat  tax  avoidance  and 
evasion;  supporting reform and strengthening capacity in the field of justice and home affairs, including issues such as 
asylum,  migration  and  readmission,  and  the  fight  against,  and  prevention  of,  trafficking  in  human  beings  as  well  as 
terrorism and organised crime, including its financing, money laundering and tax fraud; 

9      Examples: Progressive integration in the EU internal market, enhanced sector co-operation, creating conditions for well 

managed mobility of people and for promoting people-to-people contacts; 

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implemented. There is also lack of coherence between the implementation provisions of the 
ENPI and other external action instruments. Flexibility mechanisms can be further enhanced 
and  eligibility  criteria  widened  to  match  the  new  policy  context.  In  terms  of  eligibility,  the 
importance  of  Civil  Society  Organizations  (CSOs)  in  the  neighbourhood  region  has  been 
growing  constantly  over  the  last  years,  but  in  Art.  14  on  Eligibility  CSOs  are  not  explicitly 
mentioned,  which  does  not  reflect  sufficiently  the  good  work  already  done  together  with 
CSOs  in  the  ENP  region,  especially  concerning  promotion  of  good  governance,  rule  of  law 
and human rights. 

CBC provisions 

The Cross-Border Cooperation has been a distinct feature of the relationship between the EU, 
ENP  partners  and  Russia  allowing  for  joint  initiatives  with  a  common  set  of  rules  on  both 
sides  of  the  EU  borders.  Currently  the  CBC  programmes  benefit  from  an  overall  budget  of 
around EUR 1 billion (contributions from the ENPI and the European Regional Development 
Fund, ERDF). They are managed according to specific Implementing Rules (IR), which use 
shared  management  as  a  guiding  principle  but  contain  significant  elements  of  EU  rules  and 
procedures for external action (PRAG).  

While  the  ENPI  Regulation  indicates  the  main  principles  and  key  orientations  of  the  CBC 
with  the  neighbours  as  well  as  the  main  implementing  provisions,  the  CBC  Implementing 
Rules are set in detail in a dedicated Regulation.  

The  system  is  functioning  relatively  well  although  consultations  with  stakeholders 
demonstrate the need for some changes which may have an impact on the provisions of the 
Regulations, especially concerning: 

•  potential  extension  of  geographical  eligibility  to  encompass  the  important  economic, 
social and cultural centers as relevant for the proper functioning of the programmes;  

full  application  of  “shared  management”,  involving  Member  States  as  signatories  of 

• 
Financing agreements;  

•  co-financing by partner countries; 

•  specific status of Russia. 

As a consequence, specific modifications with respect to these issues would allow for a more 
effectively functioning mechanism.  

Far-reaching  changes  will  be  required  also  in  the  Commission  Regulation  laying  down  the 
CBC Implementing Rules, mainly with regard to the management modalities. 

Linkages with internal instruments/policies 

The ENP provides for a gradual political association and progressive economic integration of 
the  partners  with  the  EU  and  EU  internal  policies  are  key  references  in  this  process.  In  the 
case of the Neighbourhood, a number of initiatives have a transboundary aspect which so far 
has been addressed only to a very limited extent. The notable exception is the Cross-Border 

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Cooperation that allows for addressing common challenges and objectives through a single set 
of rules and through pooling resources from both the internal and external funding sources of 
the EU budget.  

In  other  areas,  such  as  infrastructure,  energy,  SME  development  and  industrial  cooperation, 
ICT,  higher  education,  research  and  innovation,  environment  and  cooperation  on  maritime 
affairs, there is scope for strengthening the linkages between the relevant internal policies and 
instruments  and  the  ENP  and  the  European  Neighbourhood  Instrument.  This  entails 
strengthened cooperation with the relevant Commission services both at the programming and 
at the monitoring stage. In addition, there is a need for mainstreaming climate considerations 
into  all  policy  sectors,  as  well  as  ensuring  a  tracking  mechanism  to  measure  such  progress. 
This  will  be  essential  in  order  to  prepare  partners  to  address  complex  challenges  such  as 
mitigation of and adaptation to climate change.10  

Furthermore,  strengthened  linkages  with  internal  instruments/policies  could  be  achieved 
through replicating the example of Cross-Border Cooperation, notably pooling of funds from 
various internal and external funding sources of the EU budget and implementing them with a 
single  set  of  rules  also  in  other  policy  areas,  such  as  infrastructure  interconnections.  Also, 
extending of funding from internal instruments to the Neighbourhood could be envisaged, as 
appropriate.    

The  ENP  offer  includes  the  possibility  for  ENP  partners  to  participate  in  EU  agencies  and 
programmes.  This requires an  appropriate financial contribution from the ENI. The issue of 
long-term  financing  of  ENP  partners’  participation  in  EU  agencies  and  programmes  thus 
needs  to  be  adequately  addressed  by  the  future  instrument,  including  the  establishment  of 
appropriate, sustainable delivery mechanisms. 

Evolving relationship with Russia 

Russia is the only beneficiary of the ENPI not covered by the ENP. The legal basis for EU 
relations with Russia is the Partnership and Cooperation Agreement (PCA) which came into 
force in 1997. The EU is currently working with Russia on a new agreement to replace the 
PCA.  In  2003,  the  EU  and  Russia  agreed  to  reinforce  their  cooperation  by  creating  four 
“common spaces”.11 The EU-Russia Partnership for Modernisation was launched in 2010 and 
is now in its implementation phase.   

Financial  cooperation  with  Russia  began  in  the  early  1990s,  under  the  TACIS  programme, 
which has been replaced by the ENPI. As all other countries, Russia is entitled to benefit from 
both  the  bilateral,  multi-country  and  cross-border  ENPI  funding.  However,  given  the 
significant  recent  improvements  in  Russia’s  fiscal  position,  the  need  for  large  volumes  of 
financial  assistance  has  declined.  Russia aspires  to a relation  of  equals and  has  become  a 
donor  itself.  As  a  result,  in  the  period  2007-2013  the  country  received  only  marginal 
allocations  under  the  bilateral  envelope  of  the  ENPI.  Cooperation  within  the  framework  of 

10 

11 

Regarding instruments under the EU budget, in order to reach the Europe 2020 objectives and to help other parts of 
the  world  step  up  their  efforts  to  combat  climate  change,  the  Commission  has  stated  in  the  June  2011 
Communication  on  “A  Budget  for  Europe  2020”  that  it  intends  to  increase  the  proportion  of  climate-related 
expenditure  across  the  EU  budget  to  at  least  20%,  with  contribution  from  different  policies,  subject  to  impact 
assessment evidence. 
The  Common  Economic  Space;  the  Common  Space  on  Freedom,  Security  and  Justice;  the  Common  Space  on 
External Security; and the Common Space on Research, Education and Culture. 

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multi-country  programmes  continues  and  is  carried  out  according  to  the  principle  of  co-
financing by the EU and Russia. Most notably, Russia is co-financing CBC programmes. This 
reflects  the  evolving  position  of  Russia  as  a  strategic  partner  where  co-financed  projects 
should be in both sides’ interest.  

Providing  support  to  Russia  through  the  ENPI  has  not  fully  reflected  the  specific  status  of 
Russia, as both a Neighbour and a strategic partner. Russia is also the only partner benefitting 
from the ENPI that is not covered by the ENP. The need to better align geographic eligibility 
of the future ENI with the policy and to address specific status of Russia should to be taken 
into account in the future MFF. 

2.5.  Legal base for EU action 

Article 8 of the TEU provides the orientations and the basis for the ENP. The legal base for 
the  financing  instrument  to  support  the  ENP  is  article  209.1  TFEU12  and  article  212.2 
TFEU. 

2.6.  EU Value Added 

The EU is best placed to deliver and coordinate 

In  neighbourhood  countries  where  alignment  to  EU  rules  and  standards  is  one  of  the  key 
policy objectives, the EU is best placed to deliver this assistance. Some specific support can 
only be provided at EU level, for example to promote progressive economic integration in the 
EU internal market, access to the Schengen space or participation in EU programmes. Thus 
the EU is the leading cooperation partner in most of these countries, a role widely recognised 
by  Member  States,  IFIs  and  other  donors.  Helping  the  EU  neighbours  to  align  with  EU 
policies,  rules  and  standards  is  a  key  driver  for  reforms  in  the  ENP  partner  countries.  The 
benefits to the EU of increased stability and prosperity at its borders are vital to all Member 
States. Through EU coordination and efforts for instance fighting illiteracy amongst women in 
Morocco has been achieved successfully, or improvements  to the water and sanitation system 
in  Moldova  could  have  been  realized.  These  projects  wouldn't  have  been  such  a  success 
without the coordinating and leading role of the EU. 

The  EU  has  a  network  of  international  agreements  with  partners  and  organisations  all  over  the 
world, not matched by individual Member States, which gives them influence in almost all fields of 
external relations with our partner countries.  

The EU plays a multi-faceted role in development: as an implementing agent of EU aid and as an EU 
coordinator  and  policy-maker  in  the  development  field,  as  an  economic  and  trade  partner,  through 
security policy and political dialogue, as well as through other EU sector policies – such as migration, 
climate or energy.  

The EU as a global player  

In the Neighbourhood, the EU is already delivering the lion's share of the external assistance 
and  this confirms the EU's role as a key player in the region and on the international stage.   

12 

Treaty on the functioning of the European Union 

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In  a  globalised  world,  the  added  value  of  joined-up  EU  development  cooperation  is  clearly 
established in comparison to 27 member States and the Commission acting on their own.  

In the face of increasingly complex challenges, none of the EU's internal priorities – security, 
growth  and  job  creation,  climate  change,  access  to  energy,  health  and  pandemics  and 
migration - will be achieved in isolation from the wider world.  

The critical weight of the EU 

With 27 Member States acting within common policies and strategies, the EU alone has the 
critical weight to respond to global challenges. The action of Member States can be limited 
and fragmented, with projects which are often too small to make a sustainable difference in 
the field.  

This critical mass also puts the EU in a better position to conduct policy dialogue with partner 
governments. The ENPI assistance reflecting priorities of the jointly agreed ENP Action Plans 
is generally accepted by all EU Member States, as well as by other international donors as a 
model  example  of  combining  development  assistance  programmes  with  a  transformation 
reform agenda. For these reasons the EU-produced matrices of assistance are often treated as 
points of reference for the donor coordination in the ENP countries.  

Division of labour within the EU is a crucial component of its added value. With its network 
of  international  agreements  with  partners  and  organisations  all  over  the  world,  the  EU  is  a 
natural  coordinator,  and  can  influence  almost  all  fields  of  international  relations,  which 
individual  Member  States,  acting  within  common  policies  and  strategies,  cannot  do  alone.  
Streamlining  the  work  of  Member  States  through  the  EU  enables  better  coordination  and 
makes EU work more effective. The EU is also more efficient in coordinating the technical 
and financial assistance to all neighbourhood countries under a common umbrella based on a 
common strategy than the individual Member States. 

Acting as one makes financial sense  

At  a  time  of  budgetary  restrictions,  when  several  Member  States  have  chosen  to  exit  entire 
sectors of cooperation and withdraw from supporting certain countries, the EU is able to play 
an active role in promoting democracy, peace, solidarity, stability and prosperity and poverty 
reduction in the Neighbourhood. In this context, it makes more sense than ever from a purely 
economic perspective to channel aid at EU level where a real difference can be made. Acting 
through the EU can actually save money for Member States.  

Working  with  the  EU  is  cheaper.  Administrative  costs  are  lower  than  the  average 
administrative costs of the principal donors for bilateral aid.  

In the Neighbourhood the ENPI, apart form its unquestionable role as provider of the bulk of 
international assistance, has also a strong leverage effect mobilising funds from IFIs and other 
donors. The EU’s commitment to partners gives a positive signal to investors that the support 
by individual Member States may not bring to the same extent.  

In times of economic crisis, a more coordinated and integrated approach between the EU 
and  its  Member  States  through  joint  programming  will  bring  about  more  added  value, 
increased strength and legitimacy, and more impact and effectiveness. 

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Greater accountability 

Acting  as  one  makes  the  EU  more  accountable  than  acting  separately.  In  addition,  the 
Commission  is  one of the  most transparent aid bodies in the world. Such transparency is in 
itself an important tool to ensuring effective value for money.  

3. 

OBJECTIVES 

3.1. 

Policy framework and objectives  

The  key  objectives  of  the  ENP  are  set  by  Article  8  of  the  TEU  as  developing  a  special 
relationship with neighbouring countries, aiming to establish an area of prosperity and good 
neighborliness at the EU’s borders, founded on the values of the Union and characterized by 
close  and  peaceful  relations  based  on  cooperation.  Funding  provided  to  the  neighbours, 
notably through the ENPI, follows these strategic objectives and should continue to do so.  

The  specific  objectives  for  the  future  instrument  consist  of  responding  to  a  number  of 
challenges  identified  as  specific  problems,  based  on  the  new  policy  orientations  outlined  in 
the section 2.1, as well as on assessments and lessons learned. 

Specific objectives of the future instrument 

• 

• 

• 

• 

• 

• 

• 

Apply  the  principle  of  “more  for  more”  and  mutual  accountability  in  line  with  the 
new vision of the ENP, notably through specific provisions on criteria for financial 
allocations and on the programming process, as required; 

Address  the  complexity  and  length  of  the  programming  process  in  order  to 
streamline,  shorten  and  better  focus  the  process,  notably  for  ENP  partners  which 
have  jointly  agreed  with  the  EU  strategic  priorities  through  Action  Plans  or  other 
equivalent documents; 

Streamline  the  scope  of  the  instrument  with  the  appropriate  balance  between  the 
flexibility of the instrument  and its focus on the policy objectives and key areas of 
cooperation; 

Adapt  the  implementation  provisions  and  improve  the  coherence  between  the 
external instruments; 

Provide  for  improved  provisions  for  the  Cross-Border  Cooperation  to  facilitate 
effective and fast implementation of the programmes; 

Promote closer linkages with EU internal instruments and policies, including through 
strengthened cooperation with the relevant Commission services at the programming 
stage  and,  where  relevant,  mechanisms  allowing  for  pooling  of  funds  from  internal 
and external headings of the EU budget;  

Respond  to  the  evolving  relationship  with  Russia  by  amending  provisions  on 
Russia’s eligibility to the ENI funding, reflecting the specific status of Russia both as 
EU neighbour and strategic partner. 

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3.2.  Consistency with external action priorities 

The Lisbon Treaty defines a new institutional framework for the Union’s external action. This 
is  intended  to  promote  the  coherence  of  EU  stance  and  enhance  the  EU  standing  on  the 
international  scene.  The  EU  needs  to  equip  itself  with  a  long-term  political  strategy  for 
external  action  and  an  appropriate  toolbox  that  should  pursue  the  following  strategic 
objectives: 

1.  Promoting  and  defending  EU  values  abroad.  Through  the  European  Neighbourhood 
transitional  and  democratic  processes  and 

Instrument 
the  EU  will  promote 
strengthening of civil society around its borders;  

2.  Projecting  EU  policies  in  support  of  the  EU  2020  agenda  for  smart,  sustainable  and 
inclusive  growth.  With  the  ENI,  the  EU  will  support  addressing  major  global 
challenges  and  assist  relevant  reforms    benefitting    both  the  EU  and  the  partner 
countries;  

3.  Increasing  the  impact  of  EU  development  cooperation,  with  the  primary  aim  of 
eradicating poverty. Through the ENI, the EU will assist partner countries in meeting 
development  challenges  according 
interests  and 
commitments  and  the  potential  for  impact.  The  ENI  will  also  help  improve  EU 
coordination and Policy Coherence for Development;  

their  needs,  capacities, 

to 

in 

in 

the 

4.  Investing 

long-term  prosperity,  stability  and  democracy 

the  EU 
Neighbourhood. The aim of establishing an area of stability, prosperity and democracy 
is  the  primary  objective  of  the  ENI  and  the  renewed Neighbourhood  policy. Priority 
will be given to support EU regional and bilateral policies, including thematic ones, in 
the  wider  Neighbourhood.  The  democratic  transition  processes  in  the  southern 
Mediterranean and their possible effects in the wider region make it necessary to better 
support the aspirations of these societies for democratic values and principles and for a 
more  equitable  distribution  of  the  benefits  of  growth,  whilst  pursuing  the  goals  of 
greater political cooperation and integration with the neighbours, both in the South and 
in the East. This includes an increased focus on engagement with civil society actors. 
5.  Improving crisis prevention and resolution. The ENI should allow for an enhanced and 

more flexible support to crisis prevention and resolution in the Neighbourhood. 

Support  to  the  EU  neighbours  through  a  dedicated,  targeted  and  policy-driven  instrument 
endowed with financial resources corresponding to the ambitions of the renewed ENP is thus 
clearly in line with the major priorities of the EU external action. 

However,  continued  complementary  assistance  to  the  ENP  region  will  also  need  to  be 
provided through a number of other external action instruments that have contributed so far: 

Policy instruments 

• 

• 

• 

Under  the  five  thematic  programmes  in  the  framework  of  the  Development 
Cooperation  Instrument  specific  programmes  have  been  implemented  in  the 
Neighbourhood; 

Dedicated  programmes  have  received  support  under  the  European  Instrument  for 
Democracy and Human Rights;  

The  Instrument  for  Nuclear  Safety  Co-operation  has  provided  assistance  to  those 
countries that have a civil nuclear programme. 

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Crisis response instruments 

• 

• 

• 

The Instrument for  Stability,  both  its short and long-term component, has provided 
substantial funding to the region; 

Instrument  for  Macro-Financial  Assistance  has  also  made  available  substantial 
funding in the Neighbourhood; 

Humanitarian Assistance Instrument. 

The  EU  will  ensure  that  activities  funded  under  other  external  action  instruments  do  not 
overlap and are deployed coherently with activities funded under the new ENI. The ENI and 
the  other  external  instruments  will  continue  to  include  provisions  to  facilitate  funding  for 
those  regional  activities  which  geographically  cover  countries  that  are  outside  a  given 
instrument’s  scope  (e.g.  INOGATE  programme13).  The  EU  will  also  coordinate  with 
financing  activities  of  the  EIB,  including  under  its  external  mandate,  the  EBRD,  and  other 
IFIs. 

3.3.  Consistency with other EU policies 

Development Policy 

The  recent  people-led  movements  in  a  number  of  countries  in  the  Southern  Neighbourhood 
have clearly highlighted that sound progress on the Millennium Development Goals (MDGs) 
is essential, but not sufficient. Same is valid for good marks in the Human Development Index 
and related indicators on inequality, gender and multidimensional poverty. This leads to two 
conclusions:  first,  that  the  objectives  of  development,  democracy,  human  rights,  good 
governance  and  security  are  intertwined;  secondly,  that  it  is  critical  for  societies  to  offer  a 
future to young people.  

As  set  out  in  the  Communication,  "Increasing  the  Impact  of  EU  Development  Policy:  an 
Agenda for Change", in future the EU should seek to focus its offer to partner countries where 
it can have the greatest impact and concentrate its development cooperation on support for: 

•  democracy, human rights and other key elements of good governance, and 

• 

inclusive and environmentally sustainable growth for human development. 

These elements can also be found in the Joint Communication “A new response to a changing 
Neighbourhood”.  The  future  instrument  should  contribute  to  implementing  and  further 
pursuing these goals, in line with the above-mentioned development objectives. 

Through  comprehensive  political  and  policy  dialogue  with  all  partner  countries  the  EU  will 
define the most appropriate form of cooperation, leading to informed and objective decisions 
on the most effective policy mix, aid levels, financial instruments and aid arrangements. 

Internal policies 

13 

The INOGATE Programme is an international energy co-operation programme between the European Union and 
the  Partner  Countries  of  Armenia,  Azerbaijan,  Belarus,  Georgia,  Kazakhstan,  Kyrgyzstan,  Moldova,  Tajikistan, 
Turkmenistan, Ukraine and Uzbekistan. 

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Through the ENP the EU offers greater trade and investment opportunities within a market of 
500 million people. This provides attractive opportunities to the Neighbourhood and makes a 
genuine  contribution  to  stimulating  growth,  prosperity  and  stability.  Turning  this  offer  into 
reality  requires  a  progressive  economic  integration  in  the  EU  internal  market  and  into  the 
relevant  policies,  such  as  social  policy,  consumer  protection,  food  safety,  health,  energy, 
climate  action,  environmental  protection,  fisheries  policy,  integrated  maritime  policy  and 
research and innovation. It also implies interconnection of networks, regulatory convergence 
at  sectoral  level,  institution  building  and  possibilities  for  partners  to  participate  in  EU 
programmes  and  agencies  when  possible.  Best  practice  and  experience  in  the  cohesion  and 
rural  development  policies  will  be  shared  with  the  partners  to  address  common  challenges. 
This  also  means  effective  support  to  partners  in  the  implementation  of  international  and 
regional agreements.  

The ENP Action Plans provide comprehensive blueprints for such integration efforts and the 
future  ENI  will  continue  to  support  their  implementation.  In  this  context,  national  and 
regional  programmes  will  provide  a  comprehensive  framework  for  supporting  partners’ 
approximation efforts in a wide range of sectors and their integration into specific EU policy 
initiatives.  This  will  help  avoid  a  multiplication  of  initiatives,  ensure  coherence  in  the 
approach,  foster  ownership  among  beneficiaries  and  ultimately  enhance  effectiveness  and 
impact.  The  ENI will also be key in promoting investment in  partner  countries  including in 
the areas of transport and energy interconnections, environment and climate change, including 
through  research  and  innovation  capacity  building,  and  an  enhanced  use  of  innovative 
financial instruments.  

Given  the  objective  of  the  ENP  to  foster  closer  integration  between  the  EU  and  the  partner 
countries,  provisions  for  a  better  coordination  of  EU  internal  and  external  policies  in  the 
Neighbourhood  should  be  strengthened,  including  through  closer  cooperation  with  relevant 
Commission  services  at  the  programming  stage  and,  where  relevant,  use  of  mechanisms 
allowing for pooling of funds from internal and external headings of the EU budget.  

This  could  notably  apply  to  areas  of  cooperation  such  as  infrastructure  with  cross-border 
dimensions, in particular transport and energy networks, the ICT sector14 and other networked 
industries,  as  well  as  higher  education  and  the  environment  area  given  their  strong  cross-
border  component.  Increased  ENI  support  on  building  capacities  in  research  and  innovation 
would help underpinning all of the above areas of cooperation and assist all partner countries 
in  alignment  with  EU  policies  and  objectives  in  order  to  address  global  and  regional 
challenges. 

Increased  synergies  with  the  EU  internal  policies  and  the related use  of  innovative  financial 
instruments should be sought, on the basis of a coordinated approach to engaging EU budget 
in such instruments. This could facilitate pooling of resources from different headings of the 
Multiannual Financial Framework.    

4. 

POLICY OPTIONS 

14 

Deployment  of  ICT  services  and  infrastructures,  impact  of  the  Internet  on  growth,  freedom  and  expression  of 
democratic values can not be underestimated 

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4.1. 

Option  0:  “No  EU  Action”;  the  EU  discontinues  its  financial  support  through  a 
dedicated instrument for the Neighbourhood. 

Discontinuing EU action would mean not establishing a new dedicated financial instrument in 
support of the ENP after 2013. Since according to Art. 32 of the Regulation (EC) 1638/2006 
of  24  October  2006  the  current  ENPI  will  not  apply  beyond  31  December  2013,this  option 
would thus mean that the ENP partners would stop receiving a substantial amount of financial 
assistance in the areas currently supported by the ENPI. This option would not allow the EU 
to  further  the  objectives  of  the  ENP  as  set  out  in  article  8  of  the  TEU,  nor  to  fulfil  the 
ambitions of the renewed ENP vision outlined in the Joint Communication “A new response 
to a changing Neighbourhood”. 

4.2.  Option 1: “No change”; cooperation with the countries concerned remains strictly in 

the framework of the existing ENPI Regulation- baseline scenario. 

The baseline scenario implies maintaining the status quo and continuation of the EU support 
to the region in its current form and with the current geographic and thematic scope.  While 
providing  funding  according  to  the  current  rules  allows  for  a  predictable  support  to  the 
partners in many policy areas, this option would hardly allow for matching the ambitions of 
the Lisbon Treaty, integrating new developments in relations with the Neighbours, as well as 
for implementing the new ENP vision, including the “more for more” principle.  In particular, 
all  the  specific  problems  and  challenges  identified  in  this  IA  could  not  be  appropriately 
addressed.  

4.3. Option 2: "Adapting the current set-up"; the legislative proposal for the future ENI 
should be based on the current ENPI Regulation with a number of modifications. 

Article  8  of  the  Lisbon  Treaty  and  the  new  ENP  vision  of  a  closer,  democratic,  prosperous 
and  stable  Neighbourhood,  with  each  partner  country  reaping  the  benefits  of  a  tailored  and 
differentiated  approach,  call  for  adapting 
the 
Neighbourhood  to  the  increased  level  of  ambition  of  the  renewed  ENP.  The  more  so  as 
implementing such a vision is not without challenges for the partners that have to undertake 
difficult and costly reforms before the benefits become fully visible.  

the  future  financial 

instrument  for 

The future ENI should notably target reaching the main objectives of the new ENP vision and 
addressing  the  specific  problems  and  challenges  identified  in  this  IA.  The  sub-options 
identified below outline main choices to be considered. 

Applying the “more for more” principle 

Sub-option 1: Maintaining the status-quo 

Maintaining  the  current  provisions  on  allocation  of  funds  and  programming  would  make  it 
difficult to fully apply the principles of “more for more” and “mutual accountability” which 
feature as the central aspects of the renewed ENP. 

Sub-option 2: Amend provisions on the allocation of funds and programming 

Amending relevant provisions on the allocation of funds and the programming process would 
allow for a more differentiated approach to the Neighbours in line with the “more for more” 

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principle and thereby for aligning the financial instrument to the new vision of the ENP. This 
new vision is predicated on an incentive-based approach. Differentiating between countries, it 
offers "more for more": those that go further and faster with reforms notably those related to 
democratic  standards and  rule  of law will  be able to  count on greater  support from  the EU. 
This  is  of  key  importance  to  the  EU  as  further  democratization  and  sector  reforms  are 
essential  elements  of  building  the  area  of  prosperity  and  good  neighbourliness  around  EU 
borders. 

Th “more for more” approach will be applicable to the full spectrum of incentives proposed 
by  the  EU:  to  policy  developments  as  well  as  to  the  financial  assistance.  The  main 
benchmarks  to  be  used  to  assess  whether  a  country  is  genuinely  engaged  in  the 
democratisation  process  and  whether  it  can  expect  to  benefit  from  the  increased  incentives 
offered  by  the  EU  are  defined  in  the  Communication    “A  new  response  to  a  changing 
Neighbourhood”: 

–  free and fair elections; 

–  freedom of association, expression and assembly  

–  free press and media; 

–  the rule of law administered by an independent judiciary and right to a fair trial; 

–  fighting against corruption; 

–  security  and  law  enforcement  sector  reform  (including  the  police)  and  the 

establishment of democratic control over armed and security forces. 

The  above  criteria  are  illustrative  and  cannot  be  the  only  criteria  by  which  support  is 
determined.  

Application of the “more for more” principle could include a dedicated performance reserve 
and indicative allocations being established within a specific range (“fourchette”). 

Addressing the complexity and length of the programming process 

Sub-option 1: Maintaining the status-quo 

Maintaining  the  current  programming  process  would  ensure  predictability  of  support  to  the 
partners but would not address the challenge of limited coherence between the programming 
and implementation identified as a specific problem and a major weakness. It also would not 
allow  for  improving  the  efficiency  of  the  programming  process  and  responding  to  the  EU 
commitment to simplify programming embedded in the renewed ENP. 

Sub-option 2: Amending provisions on programming 

Amending  the  relevant  provision  on  programming  would  allow  for  simplifying  and 
streamlining  the  programming  process  in  line  with  the  orientations  set  out  in  the  renewed 
ENP.  

The  new  provisions  on  programming  would  provide  for  two  types  of  programming 
documents: 

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a) for the partners that have concluded Action Plans or other equivalent documents with the 
EU, a single, light programming document based on priorities defined within the Action Plans 
(or other equivalent documents) and commitments entered into by partner countries, including 
commitments taken in the context of the EaP or UfM, would replace the Strategy Papers and 
the  Indicative  Programmes.15  This  document,  named  a  Single  Support  Framework  (SSF), 
based  on  priorities  of  Action  Plans  or  other  equivalent  documents  will  review  progress  in 
relation  to  policy  framework,  list  priorities  for  EU  support  and  their  indicative  level  of 
funding.  

b) for partners that have not concluded Action Plans or other equivalent documents with the 
EU,  the  Strategy  Paper  and  Multiannual  Indicative  Programme  will  remain.  The  Strategy 
paper  will  define  a  response  strategy  and  the  MIP  will  define  priorities  for  support  and  the 
indicative level of funding. The Strategy papers and MIPS will also remain for multi-country 
programmes. 

The new provisions allow therefore for introducing for the majority of the partners a lighter 
programming  document  (SSF),  aligned  to  jointly agreed  objectives.  The  new  system  allows 
also for differentiation of partners from the point of view of their relationship with the EU. 

Streamlining the scope of  the instrument 

Sub-option 1: Maintaining the status-quo 

Maintaining the current approach would allow for a flexible and comprehensive programming 
but  would  limit  the  visibility  of  the  focus  of  the  ENP  and  could  lead  to  the  dispersion  of 
support.  

Sub-option 2: Amending the provision on the thematic scope 

The streamlined scope of the instrument would offer an enhanced visibility of and focus on 
broad  policy  objectives  and  a  strengthened  link  with  the  ENP.  Under  this  approach  the 
possibility to address various sectoral aspects according to the specific needs of the partners 
and  mutual  interests  (including,  where  appropriate,  the  adoption  of  or  alignment  with  the 
acquis and the participation of neighbouring countries in EU agencies and programmes), with 
choice of priorities at the programming stage, would be maintained but within a streamlined 
framework,  regrouping  the  current  set  of  29  thematic  areas  into  a  few  broader  chapters. 
Progressive integration in the EU internal market will be one of the key  specific objectives, 
and  others  will  include  notably  promotion  of  human  rights  and  fundamental  freedoms, 
establishment  of  deep  and  sustainable  democracy,  promotion  of  good  governance  and 
development of a thriving civil society; enhanced sector co-operation, institution building and 
investments;  creating  conditions  for  well  managed  mobility  of  people  and  for  promoting 
people-to-people  contacts;  sustainable  and  inclusive  development  in  all  aspects,  poverty 
reduction,  promotion  of  internal  economic,  social  and  territorial  cohesion  and  rural 
development;  confidence  building  and  other  measures  contributing  to  the  prevention  of  and 
settlement  of  conflicts;  sub-regional,  regional  and  neighbourhood  wide  co-operation  as  well 
as Cross-Border-Cooperation. 

15 

The current practice of producing a Country Environmental Profile for each beneficiary country, as an important 
tool to promote the consideration of environmental issues from the beginning of the cycle of operations, should be 
continued. 

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This  sub-option  would  therefore  allow  for  addressing  the  specific  problem  identified  with 
respect to the issue. 

Amending  and  updating  of  implementation  provisions  and  addressing  the  lack  of 
coherence between external instruments 

Sub-option 1: Maintaining the status-quo 

The  current  implementation  provisions  have  functioned  well  in  the  past  and  enable  an 
efficient  implementation  of  EU  assistance  in  partner  countries.  However,  some  aspects  are 
outdated  and  keeping  the  current  provisions  would  neither  adequately  reflect  the  way 
assistance  to  the  Neighbourhood  is  provided  nor  the  new  policy  framework  of  the  ENP. 
Maintaining  the  status-quo  would  also  maintain  the  lack  of  coherence  between  the  ENI 
regulation  and  the  implementation  chapters  of  regulations  setting  up  other  external 
instruments.  Concerning  flexibility  in  crisis  situations,  the  current  regulation  already  has  a 
well-functioning  mechanism,  but  nevertheless  the  current  procedure  limits  flexibility  and 
speed of reaction to crisis and would need to be reinforced in order to respond to future crisis 
situations. 

Sub-option 2: Adapting implementation modalities 

Adapting  the  implementation  modalities  would  allow  to  better  reflect  the  way  assistance  is 
implemented in the ENP region. Updating article 15 on “Type of Measures” or widening the 
scope of article 14 “Eligibility” e.g. by explicitly including Civil Society Organisations would 
be  more  in  line  with  the  new  ENP  vision.  Including  a  reference  to  the  use  of  innovative 
financial instruments such as the NIF would make the chapter more complete. A revision of 
article 23 could allow for establishing revolving funds. Reinforcing the flexibility elements of 
the  regulation  (i.e.  special  measures),  including  the  definition  of  specific  forms  of  flexible 
support for countries in a situation of fragility, transition or crisis, would enable to better meet 
the  challenges  of  future  crisis  and  possibly  further  speed  up  the  process  of  aid  delivery  in 
these exceptional circumstances.  

To  facilitate  the  coherent  implementation  of  multi-annual  measures  and  ensure  faster  and 
more  effective  delivery  of  assistance,  consideration  should  be  given  to  apply  to  part  of  the 
mainstream  financial  assistance  the  mechanism  of  split  commitments  used  under  structural 
funds and ENPI CBC.  

Moreover  the  coherence  between  all  external  assistance  instruments  could  be  improved  by 
using a more harmonised approach throughout all the instruments.  

Providing for improved provisions for the Cross-Border Cooperation 

Sub-option 1: Maintaining the status-quo 

Maintaining the current system would in principle allow for continuation of the CBC although 
it  is  not  unlikely  that  the  interest  in  and  commitment  to  this  form  of  cooperation  by  some 
stakeholders  would  diminish.  This  would  in  turn  seriously  hamper  the  CBC  and  limit  its 
potential. 

Sub-option 2: Adapting the CBC provisions 

Adapting some of the current CBC provisions would be beneficial to the overall functioning 
of the CBC programmes. These changes would be welcomed by the partners (Member States 

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and  neighbours)  as  they  would  address  many  of  the  shortcomings  identified  in  the  current 
programming period. 

In addition, amending the relevant CBC implementing rules is strongly required to address the 
complexity  of  the  current  system  as  identified  by  the  stakeholders.  This  would  also  help 
improve the effectiveness of the programmes and facilitate their timely implementation.  

The main modifications will consist of: 

• 

• 

• 

• 

stronger alignment with the  European Territorial Cooperation; 

extension of geographical eligibility in order to encompass the important economic, 
social and cultural centers, as relevant; 

full application of “shared management”, involving Member States as signatories of 
Financing agreements and introducing possibility to use other forms of management 

introducing  provisions  on  national  co-financing,  including  the  substantial  Russian 
co-financing. 

Facilitating closer linkages with EU internal instruments and policies 

Sub-option 1: Maintaining the status-quo 

Maintaining the current system would allow for further pooling of resources from the ENI and 
the ERDF in the CBC context but would not provide explicitly for replicating this system to 
other  internal  policies  and  instruments.  While  in  practice  a  relevant  contribution  from  ENI 
would still be possible, the lack of specific provisions could seriously limit the opportunities 
for this kind of cooperation. 

Sub-option  2: 
instruments/policies 

Improving  provisions 

for  coordination  and 

linkages  with 

internal 

Strengthening  provisions,  through  the  introduction  of  a  new  dedicated  Article  referring  to  
linkages and coordination with EU internal policies and instruments, including through, where 
technically feasible and if agreed in the new MFF framework,  pooling of funds from the ENI 
and  relevant  internal  instruments  notably  for  programmes/initiatives  with  transboundary 
aspects, such as transport and energy networks, the ICT sector and other networked industries 
as  well  as  research  and  innovation  (‘Horizon  2020’),  higher  education  and  the  environment 
area, would allow for a more effective support to initiatives that serve the common interest of 
the EU and partners.  

These  provisions  would  need  to  be  mirrored  by  specific  provisions  in  the  relevant  internal 
instruments. 

Responding to the evolving relationship with Russia 

Sub-option 1: Maintaining the status-quo 

Maintaining  the  current  set-up  would  facilitate  coherence  and  effective  implementation  of 
multi-country  initiatives  and  programmes  in  which  the  EU,  Russia  and  ENP  partners 

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participate. However, it would hardly allow for addressing the evolving nature of EU relations 
with Russia and recognising Russia’s status as a strategic partner.  

Sub-option 2: Amending provisions on Russia’s eligibility to the ENI funding 

Amending the current provisions by transferring the bilateral cooperation with Russia to the 
newly created “Partnership Instrument” targeting inter alia the EU’s strategic partners, while 
maintaining Russia as eligible for multi-country programmes under the ENI, would allow for 
the  EU’s 
addressing  both the  “strategic  partner” and 
relationship  with  Russia.  It  would  also  facilitate  coherence  and  effective  implementation  of 
multi-country  initiatives  and  programmes  gathering  the  EU,  Russia  and  ENP  partners.  This 
will also allow for a closer alignment of the bilateral cooperation under the future ENI with 
the geographic scope of the European Neighbourhood Policy. 

the  “neighbour” dimension  of 

4.4. Option 3: "Table a completely new instrument" 

A  new  financial  instrument  with  a  different  geographic  scope  and  focussing  on  objectives 
broader  or  different  than  those  of  the  ENP  could  be  considered.  Such  an  instrument  could 
include  either  other  partners  or  split  the  neighbourhood  countries,  possibly  into  two  blocks 
(East and South). However, in the light of the Lisbon Treaty and the renewed ENP vision that 
provides  for  a  continuation  of  a  consolidated  policy  framework,  drifting  away  from  the 
current geographical set-up would hardly allow for reaching the EU’s objectives with regard 
to  the  Neighbourhood.  Since  the  current  ENPI  provides  a  very  relevant  basis  for  the  future 
support to the ENP partners and requires only adaptation of the current set-up, there is neither 
rationale nor added value in tabling a new instrument.  

5. 

ANALYSIS OF IMPACTS  

5.1. 

Likely economic, social and environmental impacts of each of the options 

Option 0: "No EU action" 

The ENPI provides support for a wide range of measures with positive economic, social and 
environmental  impacts  in  the  neighbourhood  region  (see  below  impacts  for  option  1). 
Discontinuing EU action through a dedicated instrument, which provides the bulk of financial 
assistance  to  the  Neighbourhood,  would  substantially  reduce  impacts  in  all  three  areas  and 
would  endanger  the  sustainability  of  the  impacts  achieved  so  far.  Compared  to  the  other 
options, it would thus have negative economic, social and environmental impacts. In terms of 
global impact, choosing this option would also dramatically and negatively affect the overall 
EU relations with the ENP partners and harm the special relationship with these countries as 
"neighbours".  

Option 1: "No change" – base-line scenario 

Economic impact 

With ENPI support partner countries adopt policies and measures conducive to stronger and 
more inclusive growth. This includes support for efforts to improve the business environment 
such as simplifying procedures and catering to SMEs and to promote employability. Support 
is also provided to Public Financial Management (PFM) reforms. Partner countries’ efforts to 
strengthen  respect  for  the  rule  of  law  and  to  fight  corruption,  supported  by  the  ENPI,  also 

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have  a  positive  impact  on  the  business  environment,  facilitating  increased  foreign  direct 
investment and technology transfer which in turn stimulate innovation and job creation.  

Furthermore, infrastructure projects to which the ENPI has contributed also play an important 
role in stimulating growth and development.  Nevertheless, maintaining the status quo might 
hinder  the  development  of  new  innovative  facilities  and  investment  schemes,  which  would 
improve even further the leverage of EU financial aid.  

Social impact 

The  ENPI  supports  various  projects  and  programmes  with  a  considerable  social  impact  in 
partner countries, including in the areas of education, health and social protection. Support is 
provided,  inter  alia,  to  increase  school  enrolment  rates,  to  increase  literacy  rates,  to  reform 
education  and  health  care  systems  and  to  support  vulnerable  layers  of  the  population  and 
people in conflict areas. This support allows also for strengthening capacities of the relevant 
national institutions, advancing the relevant reforms and the modernisation of schooling. 

Women  are  being  empowered,  in  particular  through  education  and  vocational  training. 
Dedicated  measures  allow  for  improving  living  conditions  of  Internally  Displaced  Persons 
(IDPs)  and  refugees  and  facilitate  their  socio-economic  integration  with  host  communities. 
The relevant state institutions are also being strengthened.  

The  current  instruments  fails  to  react  sufficiently  fast  and  flexibly  enough  to  crisis  and 
unforeseen events in the neighbourhood countries, e.g. to the democratic transition processes 
initiated in several countries in the Southern Neighbourhood. This means that also support to 
civil  society  or  to  social  assistance  programmes  might  be  delayed  in  such  crisis  situations. 
Environmental impact  

The ENPI supports a number of measures aimed at promoting environmental sustainability in 
partner  countries, 
the  areas  of  renewable  energy, 
environmentally friendly transport systems and water management. 

through  projects 

including 

in 

As many of the environment challenges facing ENP partners have a trans-boundary character, 
ENPI  regional  programmes  have  in  a  number  of  cases  tackled  issues  where  national  action 
would not be sufficient, for instance in the field of air quality and water management.  Several 
regional  projects  have  achieved  important  results,  and  in  many  cases  regional  cooperation 
with  country-specific  features  have  proved  to  be  more  efficient  than  purely  bilateral 
cooperation. 

In the field of environment-related infrastructure, there has been a positive effect of upstream 
work  on  investments  e.g.  through  the  Mediterranean  Hot  Spot  Investment  Programme 
(MeHSIP).  Such  project  preparation  work,  as  well  as  the  NIF  financing  of  projects 
themselves,  has  enabled  ENPI  assistance  to  provide  a  catalytic  bridge  between  the 
expectations of partners/identification of problems and the implementation of projects by the 
IFIs.  

Environmental  issues  are  being  mainstreamed,  where  relevant,  into  activities  having  a  main 
objective  other  than  environmental  protection.  For  example,  for  NIF  financing  of  projects 
other than environmental ones such as transport or energy projects, the Commission seeks to 
ensure that EU environmental principles and standards are applied as far as possible thereby 
avoiding potential negative impacts on the environment. 

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However in the current set-up there are limits to adequately react to the launch of the regional 
dimensions  and  to  the  potential  they  have  for  projects  and  initiatives  in  the  environmental 
sector.   

Other impacts 

In terms of impact on governance, the current ENPI promotes the reform-driven agendas and 
the fulfillment of commitments within the ENP. However, so far results in this area have been 
limited. 

At  a  global  level,  maintaining  the  current  Regulation  would  still  enable  the  EU  to  continue 
supporting  the  key  objectives  of  the  ENP  and  to  build  special  relationships  with  the 
neighbours.  Nevertheless  this  option  would  not  allow  for  addressing  fully  the  objectives 
outlined in the Lisbon Treaty and  for delivering on the commitments adopted within the new 
ENP vision, with its increased focus on promoting deep and sustainable democracy. 

Option 2: "Adapting the current set-up" 

Economic impact 

With  the  modified  instrument  partner  countries  would  be  further  supported  in  adopting 
policies and measures conducive to stronger and more inclusive growth. This includes support 
for efforts to improve the business environment such as simplifying procedures and catering 
to SMEs and to promote employability. Partner countries’ efforts to strengthen respect for the 
rule  of  law  and  to  fight  corruption,  encouraged  by  the  application  of  the  “more  for  more” 
principle,  will  have  a  stronger  positive  impact  on  the  business  environment,  facilitating 
increased foreign direct investment, research, innovation and technology transfer, stimulating 
innovation and job creation.  

A streamlined programming process would enhance the relevance of assistance which would 
allow  for a more targeted  response  to  the challenges of growth and development.  Improved 
implementing  rules  for  the  Cross-Border  Cooperation  would  strengthen  the  economic  and 
social impact of the CBC programmes. 

Social impact 

A streamlined programming process would enhance the relevance of assistance which would 
allow for a more targeted response to social challenges. Improved implementing rules for the 
Cross-Border Cooperation would strengthen the social impact of the CBC programmes. Other 
social impacts would remain as in the case of option 1. 

Environmental impact  

In addition to the positive impacts outlined under option 1, this option would provide for more 
focused sectoral cooperation that will include environmental cooperation allowing the EU and 
partner countries to pursue a higher level of environment protection aimed at enforcing higher 
standards  of  air  and  water  quality,  improved  environmental  governance,  higher  resource 
efficiency,  protection  of  biodiversity  and  ecosystems,  and  supporting  the  necessary 
infrastructure investments.  

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Furthermore, a streamlined programming process would enhance the relevance of assistance 
which  would  allow  for  a  more  targeted  response  to  environmental  challenges.  In  particular, 
addressing  complex  research-based  challenges,  such  as  mitigation  of  and  adaptation  to 
climate  change  and  sustainable  management  of  biodiversity,  requires  an  enhanced  Cross-
Border  Cooperation  between  the  ENP  countries  as  well  as  with  the  EU.  Furthermore, 
improved  implementing  rules  for  the  Cross-Border  Cooperation  would  strengthen  the 
environmental and climate change impact of the CBC programmes. 

This option would have the highest positive environmental impact. 

Other impacts 

The application of the “more for more” principle should significantly strengthen the impact of 
EU  support  on  governance  in  partner  countries  and  encourage  them  to  enhance  their 
commitment to the deep and sustainable democracy and to undertake far-reaching reforms.  

At a global level, amending the current Regulation would have the most positive impact on 
the overall EU relations with the ENP countries. The proposed adapting of the current set-up 
would  make the new  Neighbourhood  Instrument  more effective and  more flexible;  it  would 
allow for meeting the objectives of the Lisbon Treaty and the new ENP vision.  

Option 3: "Table a completely new instrument" 

The economic, social and environmental impacts of an instrument with a different geographic 
scope  and  following  wider  or  different  objectives  than  those  of  the  ENP  can  hardly  be 
assessed in the given timeframe. However, in terms of coherence with the ENP objectives, the 
impacts could hardly be positive.  

At  a  global  level,  a  new  instrument  with  different  and  widened  scope  and  objectives  would 
affect  the  credibility  of  the  EU  as  an  external  player  in  the  ENP  region  and  would  be 
inconsistent  with  the  new  policy  framework.  Moreover,  the  option  of  possibly  splitting  the 
instrument into two geographical instruments would undermine the key objective of an area of 
prosperity and good neighbourliness  at the EU’s eastern  and southern borders. It could also 
widen the rift among EU Member States. 

5.2.  Impacts  on  external  action, 

in  particular  on  Policy  Coherence  for 

Development 

There  is  no  clear  impact  on  Policy  Coherence  for  Development  (PCD)  of  either  option  0, 
option  1  or  option  3.  However,  option  2  with  sub-option  2  designed  to  facilitate  closer 
linkages  with  EU  internal  instruments  and  policies  could  be  beneficial  in  improving  the 
coherence for development, in particular through an increased possibility to pool funds from 
instruments  notably  for  programmes/initiatives  with 
the  ENI  and  relevant 
transboundary  aspects,  such  as  transport  and  energy  networks,  the  ICT sector  and  other 
networked  industries  as  well  as  research  and  innovation,  higher  education  and  the 
environment  area.  This  would  in  turn  result  in  a  more  effective  support  to  this  kind  of 
initiatives that serve the common interest of the EU and partners. 

internal 

By  improving  the  PCD  through  option  2  (notably  the  sub-option  2  on  facilitating  closer 
linkages  with  EU  internal  instruments  and  policies)  the  future  Instrument  would  also 
contribute to the general coherence of EU external action. 

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5.3.  Impact in terms of management / implementation modalities 

Adapting the current ENPI Regulation as proposed would have a positive impact in terms of 
implementation modalities, for instance through strengthening the flexibility of the instrument 
to respond to crisis and simplifying implementation modalities and enhancing their coherence 
with  other  external  action  instruments.  The  proposed  changes  will  allow  for  reducing 
transaction costs of implementation while increasing the impact and therefore the instrument’s 
value for money. 

6. 

COMPARING THE OPTIONS  

6.1.  Weighing of positive and negative impacts per option 

Option 0: No EU action 

While discontinuing EU action would save money for the EU in the short term, the long-term 
effects in many areas, including trade, economic and social development, the environment and 
climate  change  would  have  a  negative  effect  on  both  the  EU  and  on  the  partner  countries. 
Stability and security implications need also to be taken into account. This option would be 
tantamount  to  re-nationalise  the  EU  policy  towards  the  Neighbourhood.  It  would  seriously 
undermine the credibility of the EU as a global actor and abruptly reduce the EU’s role in its 
Neighbourhood.  In  addition,  it  would  neither  allow  the  EU  to  further  the  objectives  of  the 
ENP as set out in article 8 of the TEU nor allow the EU to fulfil the ambitions of the renewed 
ENP vision. 

Option 1: No change 

While option 1 allows for a number of positive economic, social and environmental impacts, 
it hardly allows for matching ambitions of the Lisbon Treaty, integrating new developments 
in relations with the partners and implementing the new ENP vision.  

Option 2: Adapting the current set-up 

Option  2  would  allow  for  achieving  stronger  positive  economic,  social,  environmental  and 
governance  impacts  than  those  identified  for  option  1,  through  addressing  a  number  of 
specific  challenges  and  problems  identified  since  the  launch  of  the  current  instrument.  The 
following measures would need to be undertaken:  

• 

• 

• 

• 

• 

• 

Amending provisions on Russia’s eligibility to the ENI funding 

Amending provisions on the allocation of funds and programming 

Amending provisions on the programming process 

Amending provision on the thematic scope 

Amending provisions on implementation 

Amending provisions on  CBC  

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• 

Including  specific  provisions  related  to  internal  instruments/policies,  including 
financing of participation of partners in EU agencies and programmes 

Such an approach would notably facilitate matching the ambitions of the renewed ENP with 
the dedicated tool for support to the ENP partners. 

Option 3: Table a completely new instrument 

Assessing  economic,  social  and  environmental  impacts  of  option  3  is  difficult.  However  it 
would clearly limit the potential of reaching the objectives of the consolidated ENP vision. It 
could even lead to undermining the renewed ENP. 

6.2.  Trade-offs and synergies associated with the options 

Options 0 and 3 need to be discarded as they do not offer a viable framework for cooperation 
with the ENP partners based on the objectives of the renewed ENP vision. Option 2 offers the 
best  potential  to  adjust  the  current  cooperation  framework  in  line  with  the  evolving  policy 
context,  to  reap  the  benefits  of  the  new  EU  relationship  with  the  Neighbours,  to  improve 
coherence  of  EU  external  action  in  the  region  and  to  address  challenges  and  weaknesses 
identified. Option 1 is the second-best option as it allows for maintaining support to the ENP 
partners within a consolidated and single framework, yet it does not provide for meeting fully 
the objectives of the new ENP vision nor for addressing the challenges and specific problems 
identified within the current set-up. 

6.3.  Preferred option 

The  preferred  option  is  option  2,  consisting  of  adapting  the  current  set  up,  with  all  the 
indicated sub-options numbered as sub-options 2. Option 2 and the indicated sub-options are 
expected to have the highest positive economic, social, environmental and global impact. 

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7. 

MONITORING AND EVALUATION  

7.1. 

Core indicators of progress towards objectives  

Progress  towards  meeting  policy  and  specific  objectives  of  the  new  Neighbourhood 
Instrument can be assessed through indicators referring to: 

1) Main policy objectives 

• 

• 

• 

Furthering the conditions for close co-operation between the EU and its Neighbours 
and  for  regional  and  multiregional  integration  (area  of  good  neighbourliness), 
measured  notably  through  (a)  number  of  agreements  and  Action  Plans  or  other 
relevant  documents  in  place;    (b)  level  of  implementation  of  Action  Plans  or 
equivalent  documents  and  other  commitments  as  reflected  by  annual  Progress 
Reports; 

Promoting  democracy,  human  rights,  rule  of  law  and  development  of  civil  society, 
consolidating democratic transitions and contributing to the peaceful Neighbourhood 
measured notably through (a) level of implementation of political priorities of Action 
Plans  or  other  equivalent  documents  as  reflected  by  annual  Progress  Reports,  (b) 
indices  of  the  relevant  international  organisations  and  bodies  reflecting  the 
levels/trends of security and stability, governance, democracy and respect for human 
rights and fundamental values;  

Supporting  EU  Neighbours’  economic  and  sector  reforms  and  promoting  further 
integration  with  the  EU  and  among  neighbouring  countries  themselves  measured 
notably through (a) level of implementation of the ENP economic reform agenda and 
of the sectoral priorities of the Action Plans as reflected by annual Progress Reports; 
(b)  socio-economic  evolution  as  reflected  by  survey-based  indices  compiled  by  the 
relevant international organisations and bodies.  

2) Specific objectives indentified for the future instrument 

i.  Application  of  the  “more  for  more”  principle,  measured  notably  through  furthering 
beneficiaries' commitment and alignment to core values, joint commitments, strengthened 
political cooperation and economic integration with the EU, as reflected notably through 
annual Progress Reports;  

ii.  Adaptation of the programming process, reflected notably through (a) reducing the length 
of the programming cycle and (b) level of coherence between programming and financial 
assistance; 

iii.  Scope of the instrument, reflected notably through (a) enhanced focus of the programming 
on  the  main  policy  objectives  and  (b)  level  of  coherence  between  programming  and 
financial assistance; 

iv.  Adaptation of implementation, reflected notably through (a) level of flexibility to provide 
assistance in case of urgent needs and crisis, (b) level of participation of civil society in 
the relevant EU assistance programmes and (c) coherence with  other  external  assistance 
instruments; 

v.  Adaptation  of  the  Cross-Border  Cooperation,  reflected  notably  through  (a)  number  of 
CBC programmes, (b) establishment, launch and implementation of CBC programmes; 

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vi.  Linkages  with  external  policies,  reflected  notably  through  (a)  cases  of  pooling  of  funds 
from  internal  and  external  headings  of  the  budget  as  appropriate  and  (b)  improved 
performance of partner countries in the relevant policy areas as measured through annual 
Progress Reports; 

vii. Relationship  with  Russia,  reflected  notably  through  number  of  inter-regional  and  Cross-

Border Cooperation programmes in which Russia participates;  

In  practice  the  operational  objectives  will  need  to  be  customized  to  the  situation  in  each 
beneficiary country and would be set in the programming documents based on the challenges 
identified. As the new ENI will be an enabling Regulation establishing the essential elements 
and the basis for the EU intervention, the specific cooperation objectives for each country and 
region  will  be  defined  through  programming  and  the  actions  will  be  defined  notably  at  the 
implementation  stage  with  details  on  activities  to  be  carried  out  by  the  EU,  including  the 
objectives pursued by the actions in question and the expected results. Specific indicators will 
be fixed at that moment, taking into consideration the particularities of the action in question.  

The above said, future monitoring and evaluations will have to take into account that: 

• 

• 

• 

• 

• 

because  of  the  heterogeneity  of  beneficiaries,  with  varying  needs,  capacities  and 
performance,  the  instrument  may  be  able  to  achieve  more  results  in  some  contexts 
than in others;   

because the instrument will continue to focus on the wide ENP objectives as defined 
in  the  TEU  and  the  relevant  policy  documents,  it  could  be  difficult  to  identify 
progress  resulting  exclusively  from  the  instrument,  except  at  the  level  of  specific 
activities;  

many  of  the  “results”  of  the  future  assistance,  such  as  progress  in  meeting  the 
political benchmarks will be by their nature difficult to measure;  

to  some  extent  the  objectives  of  the  instrument  may  be  achieved  through  other  EU 
measures  (political,  trade,  etc)  as  much  as  through  the  results  of  the  EU  financial 
interventions;  

given  the  difficult  context  for  evaluation,  the  relative  weight  of  absorption  as  a 
measure for assessing progress should not be overestimated. 

7.2.  Outline for monitoring and evaluation arrangements  

The Commission’s Monitoring and Evaluation systems are increasingly focussed on results. 
They  involve  internal  staff  as  well  as  external  expertise.  Task  Managers  in  EU  Delegations 
abroad  and  in  Headquarters  continuously  monitor  the  implementation  of  projects  and 
programmes  in  various  ways,  including  wherever  possible  through  field  visits.  Monitoring 
provides valuable information on progress; it helps managers to identify actual and potential 
bottlenecks, and to take corrective action. 

Furthermore,  the  Commission  also  conducts  strategic  evaluations  of  its  policies,  from 
programming and strategy to the implementation of interventions in a specific sector (such as 
health, education etc), in a country or region, or of a specific instrument. These evaluations 
are  an  important  input  to  the  formulation  of  policies  and  the  design  of  instruments  and 

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projects. These evaluations are all published on the Commission’s website and a summary of 
the findings is included in the Annual Report to the Council and the European Parliament. 

The EU has committed itself to mainstreaming action on climate and biodiversity and for this 
to be meaningful it needs to be accompanied by an obligation to identify relevant programmes 
so  that  the  EU  is  able  to  set  out  clearly  how  much  of  its  spending  relates  to  these  global 
challenges.  Clear  benchmarks,  monitoring  and  reporting  rules  need  to  be  established. 
Expenditure that promotes climate action16 or energy efficiency as well as the protection and 
sustainable management of biodiversity and ecosystems, will be tracked using a system that 
reflects  the  established  Organisation  for  Economic  Cooperation  and  Development  (OECD) 
methodology ("Rio markers"). 

16 

Regarding instruments under the EU budget, in order to reach the Europe 2020 objectives and to help other parts of the world to 
step up their efforts to combat climate change, the Commission has stated in the June 2011 Communication  on “A Budget for 
Europe 2020” that it intends to increase the proportion of climate related expenditure across the EU budget to at least 20%, with 
contribution from different policies, subject to impact assessment evidence. 

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