COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-12-07
Institutions: European Commission
Subjects: ACP countries, Cotonou Agreement, EU financing, cooperation policy, economic development, economic support, overseas countries and territories, poverty

EUROPEAN COMMISSION 

Brussels, 7.12.2011 
SEC(2011) 1460 final 

COMMISSION STAFF WORKING PAPER 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

COMMUNICATION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

Preparation of the multiannual financial framework regarding the financing of EU 
cooperation for  
African, Caribbean and Pacific States and Overseas Countries and Territories 
for the 2014-2020 period  
(11th European Development Fund) 

and covering the subsequent implementing and financial regulations of the 11th 
European Development Fund (EDF) 

{COM(2011) 837 final} 
{SEC(2011) 1459 final} 

 
 
 
 
  
 
 
1. 

PROBLEM DEFINITION 

This  impact  assessment  relates  to  the  preparation  of  the  11th  European  Development  Fund 
(EDF) covering EU funding for cooperation with African, Caribbean and Pacific (ACP) States 
and Overseas Countries and Territories (OCTs).  

The problem to be tackled in ACP States is the high-level poverty, and the need for the EU to 
support  their  efforts  towards  reducing  poverty,  attaining  sustainable  development  and 
achieving  integration  into  the  world  economy,  whereas  OCTs  continue  to  face  specific 
economic and  social development problems  which  can have serious  implications for their 
specific environments. The external dimensions of EU internal policies have been taken into 
account in the Commission's analysis. 

2. 

ANALYSIS OF SUBSIDIARITY  

The EU has clearly identified the areas where it can offer added value in the EDF and has 
focused  its  funds  strongly  on  budget  support,  governance  and  infrastructure.  The  10th  EDF 
has  also  demonstrated  its  added  value  in  the  form  of  strong  responsiveness.  By  keeping 
unallocated funds in the EDF to cover unforeseen needs and by using innovative instruments 
such  as  FLEX  and  V-FLEX,  the  EU  has  been  able  to  play  a  key  role  vis-à-vis  ACP  States 
facing disasters or food, economic and financial crises.  

For  EU  Member  States,  the  ACP-EU  partnership  and  the  EDF  offer  a  global  reach  and  a 
means  of  implementing  a  consistent  set  of  objectives  across  77  ACP  States.  In  terms  of 
presence,  scale  and  focus,  EDF  operations  offer  significant  benefits  over  national 
actions. This critical mass puts the EU in a better position to conduct political dialogue with 
partner  governments.  The  EU  also  has  a  long-standing  reputation  and  role  as  a  promoter  of 
inclusiveness  and  multilateralism.  Thanks  to  its  large  scale,  the  EU  can  deliver  help  to  the 
poor  in  some  of  the  world’s  most  remote  areas,  where  most  of  the  Member  States  have  no 
strategic interest and their presence is limited.  

EU interventions through the EDF in OCTs have added value because, in many cases, it is 
the  only  other  donor  apart  from  the  Member  States  to  which  the  OCTs  are  constitutionally 
linked. It has ensured both that OCT-EU cooperation has sufficient funding available and that 
it  is  consistent  with  EU  cooperation  with  ACP  countries,  of  which  most  OCTs  are  direct 
neighbours.  

3. 

OBJECTIVES OF EU INITIATIVE 

The  general  objectives  of  the  11th  EDF  remain  those  laid  down  in  the  revised  Cotonou 
Agreement (Article 1) and in Part IV of the Treaty on the Functioning of the European Union 
(Article 198) for OCTs. 

In addition, as regards the specific objectives for the revision of the instrument, the policy 
framework  for  the  preparation  of  the  11th  EDF  consists  of  the  communication  ‘Increasing 
the  impact  of  EU  development  policy:  an  Agenda  for  Change’  adopted  on  13  October 
2011  on  the  one  hand,  and  the  guidelines  for  the  revision  of  the  Overseas  Association 
Decision  (OAD)  on  EU-OCT  relations  on  the  other  hand.  The  tools  for  implementing  this 
framework  are  the  11th  EDF  Internal  Agreement  and  the  related  Implementing  Regulation, 

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Financial  Regulation  and  programming  guidelines.  The 
logic 
(underlying  drivers,  objectives,  options  and  impacts)  is  based  on  the  following  themes 
stemming  from  the  framework:  differentiation,  concentration,  coordination  with  Member 
States,  innovative  instruments,  flexibility,  and  regional  cooperation  (which  is  specific  to 
OCTs).  

impact  assessment 

4. 

POLICY OPTIONS 

For each theme, two scenarios (the status quo and an alternative option) are considered. For 
the alternative option, the implications of the following changes for the various elements of 
the  EDF  ‘package’  (internal  agreement,  implementing  and  financial  regulations)  are 
underlined: 

• 

• 

• 

• 

• 

• 

the  differentiation  principle  i.e.  allocating  more  funds  to  the  least  developed 
partners and less development grant aid to the more advanced; 

the concentration of EU aid on sectors where it can have the greatest impact, i.e. on 
a limited number of areas; 

the  Member  States: 

increased  coordination  with 
joint 
programming process could result in a single, joint programming document for each 
partner  country  or,  as  a  minimum  option,  an  agreement  on  division  of  labour.  For 
OCTs, this alternative option would seek — where possible —a better alignment of 
the EU and Member States’ programmes. In addition, the possibility of creating EU 
Trust Funds managed by the Commission for ACPs could be introduced; 

for  ACPs, 

the 

reinforcement  of  the  use  of  innovative  financial  instruments,  i.e.  blending 
mechanisms to boost financial resources for development. In certain ACP countries 
or  regions,  an  increasing  percentage  of  EU  development  resources  could  be  used 
through  (existing  or)  new  financial  tools,  such  as  blending  grants  with  loans  from 
European financing institutions or other risk-sharing mechanisms; 

reinforcement of the flexibility elements of the EDF, including: (i) allowing initial 
allocations to be limited in order to keep more funds aside (reserves) for topping-
ups  or  special  allocations  for  specific  sectors  or  initiatives;  (ii)  defining  specific 
forms of support for countries in situations of fragility, transition or crisis; (iii) 
focusing  EU  efforts  on  response  strategies  directly  linked  to  existing  partner 
countries’ policies, in the programming phase; 

making  the  use  of  OCT  resources  for  regional  cooperation  conditional  upon  their 
added  value  with  regard  to  furthering  regional  cooperation  with  ACPs  and 
outermost regions. 

5. 

ASSESSMENT OF IMPACTS  

Regarding differentiation, under the status quo option, the Commission-managed aid would 
continue to contribute to the general objectives, particularly poverty reduction, with a global 
reach and a global presence, but its impact and efficiency would not be maximised in certain 
countries, resulting also in lower progress on Millennium Development Goals (MDGs). Under 

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the alternative option, a sharpened geographical focus would lead to targeting resources where 
they  are  most  needed  and  have  the  greatest  possible  impact  and  value  added  in  ACPs  and 
OCTs.  With  the  more  advanced  partners,  the  EU  would  define  alternative  forms  of 
cooperation and dialogue through the most appropriate policy mix. 

Regarding concentration, under the status quo option, the Commission-managed aid would 
continue to be delivered in a relatively wide range of sectors, without tackling the problem of 
aid fragmentation. Under the alternative option, a sharpened sectoral focus would contribute 
to the higher impact of EU aid by concentrating resources on a limited number of sectors, thus 
increasing the EU’s critical mass. The risk of losing visibility for the EU in certain sectors at 
country  level  would  have  to  be  mitigated  by  effective  division  of  labour  and  increased 
coordination with other funding sources. 

Regarding coordination with EU Member States, under the status quo option the problem 
of  aid  fragmentation  and  the  risk  of  overlaps  would  not  be  tackled.  Under  the  alternative 
option,  the  efficiency  and  the  political  leverage  of  EU  aid  could  be  reinforced  through 
increased  division  of  labour  among  donors,  joint  programming  and  the  use  of  EU  Trust 
Funds. 

Regarding  the  use  of  innovative  financial  instruments,  under  the  status  quo  option  the 
impact and efficiency of EU grants would not be maximised. Under the alternative option, the 
financial leverage of EU grant resources would be increased through blending and other risk-
sharing mechanisms, as would the critical mass, particularly for large-scale projects.  

Regarding flexibility, under the status quo option, some ‘flexible’ features of the EDF would 
remain  but  in  some  cases  it  would  not  be  flexible  enough  to  respond  to  partners’  specific 
situations. Under the alternative option, aid allocations could be adapted rapidly to take into 
account evolving circumstances or specific situations (such as crisis, fragility or transition), or 
to implement a more incentive-based approach, thereby increasing not only the effectiveness 
and reactivity of EU aid but its ownership by partners. 

Regarding regional cooperation with OCTs, under the status quo option the interaction and 
integration of OCTs in regional cooperation with ACPs and outermost regions would remain 
limited.  Under  the  alternative  option,  the  efficiency  and  impact  of  EU  resources  would  be 
reinforced  both  through  better  articulation  between  EDF  and  EU  regional  cooperation 
resources and through the participation of OCTs in regional programmes with ACPs. 

6. 

COMPARISON OF OPTIONS 

The  comparison  of  the  options’  impact  on  the  chosen  objectives  concludes  that  for  each 
specific  objective,  the  alternative  option  is  preferred  over  the  status  quo  as  the  best 
approach  to  tackling  the  problems  identified  and  to  responding  to  the  general  and  specific 
objectives.  These  options  better  reflect  the  revised  policy  orientations  of  EU  development 
policy  and  the  new  orientations  for  the  EU-OCT  relationship,  which  would  contribute  to 
further  increasing  the  effectiveness  and  maximising  the  impact  of  EU  funding  on  ACP 
countries and OCTs. 

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7. 

MONITORING AND EVALUATION 

The Commission already has regular monitoring and evaluation systems in place, covering 
the breadth of its aid programme. They involve both internal staff and external expertise. The 
systems  evaluate  country  strategies,  individual  programmes  and  projects.  In  addition, 
external, independent experts are contracted to assess the performance of EU external action. 
The  Commission  also  conducts  strategic  evaluations  of  its  policies,  from  programming  and 
strategy  to  implementation  of  interventions  in  a  specific  sector,  a  country  or  region,  or  a 
specific  instrument.  Regarding  the  EDF,  the  essential  elements  and  the  basis  for  the  EU 
intervention are set out in the EDF implementing regulation. The results of EU assistance on 
poverty eradication are measured using as far as possible specific and measurable indicators. 
Particular attention is paid to progress made towards achieving the MDGs.  

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