COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing Global Europe
Date: 2025-07-16
Institutions: Directorate-General for International Partnerships, European Commission
Subjects: EU action, EU aid, EU financial instrument, European neighbourhood policy, common foreign and security policy, cooperation policy, enlargement of the Union, humanitarian aid, multiannual financial framework, sustainable development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 16.7.2025  SWD(2025) 552 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT REPORT  Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing Global Europe {COM(2025) 551 final} - {SEC(2025) 548 final} - {SWD(2025) 553 final}  
 
 
Table of contents 

1. 
INTRODUCTION: POLITICAL AND LEGAL CONTEXT ................................................................5 
PROBLEM DEFINITION ................................................................................................................... 13 
2. 
3.  NECESSITY AND ADDED VALUE OF EU’S ACTION - WHY SHOULD THE EU ACT? .......... 23 
4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? ................................................................................ 24 
5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? ..................................................................... 30 
6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ............................................................ 37 
7.  HOW DO THE OPTIONS COMPARE? ............................................................................................. 44 
8. 
PREFERRED OPTION ....................................................................................................................... 56 
9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? .................................. 57 
ANNEX 1: PROCEDURAL INFORMATION ............................................................................................. 58 
1. 
LEAD DG, DECIDE PLANNING/CWP REFERENCES ................................................................... 58 
2.  ORGANISATION AND TIMING ...................................................................................................... 58 
CONSULTATION OF THE RSB ....................................................................................................... 58 
3. 
4. 
EVIDENCE, SOURCES AND QUALITY ......................................................................................... 61 
ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT) ................................................. 62 
ANNEX 3: WHO IS AFFECTED AND HOW? ........................................................................................... 74 
PRACTICAL IMPLICATIONS OF THE INITIATIVE ..................................................................... 74 
1. 
SUMMARY OF COSTS AND BENEFITS ........................................................................................ 75 
2. 
RELEVANT SUSTAINABLE DEVELOPMENT GOALS ................................................................ 77 
3. 
4. 
IMPACTS OF THE PREFERRED OPTION ON HUMAN RIGHTS ................................................ 79 
ANNEX 4: ANALYTICAL METHODS ...................................................................................................... 80 
ANNEX 5: COMPETITIVENESS CHECK ................................................................................................. 81 
ANNEX 6: EU ADDED VALUE ................................................................................................................. 84 

1 

 
 
 
 
 
 
 
 
 
Glossary 

Term or acronym 

Meaning or definition 

EU 

DNSH 

DOAG 

EBRD 

ECA 

EFSD+ 

EIB 

EIP 

ENP 

EUR 

GDP 

GE 

GEPMS 

GERF 

HUMA 

INSC 

European Union 

Do No Significant Harm 

Decision on the Overseas Association including 
Greenland 

European Bank for Reconstruction and Development 

European Court of Auditors 

European Fund for Sustainable Development Plus 

European Investment Bank 

Economic and Investment Plan 

European Neighbourhood Policy 

Euro 

Gross Domestic Product 

Global Europe 

Global Europe Performance Monitoring System 

Global Europe Results Framework 

Humanitarian Aid 

International Nuclear Safety Cooperation 

2 

 
 
 
 
 
 
 
IPA 

MFA 

MFF 

MIP 

NCQG 

NDICI 

NGO 

ODA 

OECD 

REFIT 

RF 

RGF 

SDGs 

SO 

TFEU 

ULCM 

UN 

Instrument for Pre-Accession Assistance 

Macro-Financial Assistance 

Multiannual Financial Framework 

Multiannual Investment Plan 

New Collective Quantified Goal 

Neighbourhood, Development and International 
Cooperation Instrument 

Non-Governmental Organisation 

Official Development Assistance 

Organisation for Economic Co-operation and 
Development 

European Commission's Regulatory Fitness and 
Performance Programme 

Results Framework 

Reform and Growth Facility 

Sustainable Development Goals 

Specific Objective 

Treaty on the Functioning of the European Union 

Ukraine Loan Cooperation Mechanism 

United Nations 

3 

 
 
 
 
 
 
US 

USD 

WBIF 

United States of America 

United States Dollar 

Western Balkans Investment Framework 

4 

 
 
 
 
 
 
 
 
1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

The EU’s external action in a changing international landscape 

The  global  political  and  economic  landscape  poses  challenges  of  unprecedented 
magnitude. Russia’s war of aggression against Ukraine has brought war back to the European 
continent. The situation in the Middle East is leading to instability across the region and further 
humanitarian  needs.  Growing  unfair  competition  and  more  aggressive  economic  and 
geopolitical  stance  have  undermined  the  global  multilateral  system  reflecting  a  shift  from 
cooperation  to  competition  and  rising  conflicts.  Competition  on  technology  and  access  to 
critical raw material are key concerns. Less than 20% of the Sustainable Development Goals 
targets1 are on track and the gap to reach them by 2030 continues to widen2. Global fragility is 
on  the  rise3,  and  the  impacts  of  climate  change  and  biodiversity  loss  continue  to  increase.4 
Humanitarian  needs  continue  to  rise:  in  2024,  EUR  45  billion  are  needed  globally  for 
humanitarian  assistance,  more  than  double  compared  to  2019.  The  United  States’ 
administration’s  disengagement  from  development  cooperation,  humanitarian  aid,  and 
multilateral institutions marks a geopolitical and geoeconomic shift, with significant effects for 
both the EU and its partners globally.  

In such an increasingly difficult and volatile context, building and leveraging sustainable 
partnerships with third countries and international organisations to promote the Union’s 
fundamental interests and values5 is a defining challenge for the EU’s external policies. With 
a  view  to  foster  the  Union’s  prosperity,  competitiveness,  sovereignty,  security,  resilience, 
preparedness, and global influence while upholding the highest standards on rule of law and 
democratic values, the overall objectives for EU external action per policy are described in the 
box below. 

•  Enlargement is a political and geostrategic imperative: it is an investment in long-
term  security,  peace,  stability  and  prosperity  in  Europe.  Assistance  to  candidate 
countries  and  potential  candidates  aims  at  preparing  them,  through  investment  and 
reforms,  to  Union  membership.  The  objective  is  to  support  merit-based  accession 
processes, through alignment with  Union values, laws, rules, standards, policies and 
practices, as well as socio-economic convergence with the EU.  

•  The Union is to develop a special relationship with neighbourhood countries, aiming 
at  establishing  an  area  of  prosperity,  stability,  security,  and  good  neighbourliness, 
founded on the values of the Union and characterised by close and peaceful relations 
based on cooperation and economic stability.  

1 United Nations (2024) The Sustainable Development Goals Report. 
2  2024  Financing  for  Sustainable  Development  Report  https://desapublications.un.org/sites/default/files/publications/2024-
04/2024_FSDR_ChIIIE.pdf 
3 OECD States of Fragility Report https://www.oecd.org/en/publications/states-of-fragility-2025_81982370-en.html 
4 IPCC, 2023: Climate Change 2023: Synthesis Report. Contribution of Working Groups I, II and III to the Sixth Assessment 
Report of the Intergovernmental Panel on Climate Change. IPCC, Geneva, Switzerland, 184 pp., doi: 10.59327/IPCC/AR6-
9789291691647. 
5 Article 21 of the Treaty on European Union 

5 

 
 
 
 
 
 
 
•  The  objective  of  the  EU’s  international  partnerships  is  to  advance  sustainable 
development, poverty eradication, peace, and human rights while promoting European 
values and interests in  the world.  Global  Gateway is  the key strategy in that regard, 
supporting 
infrastructure  worldwide  while  boosting 
competitiveness and security of global supply chains.  

sustainable 

fair  and 

•  The  objective  of  EU  humanitarian  aid  is  to  provide  principled  and  needs-based 
humanitarian assistance to save and preserve life, prevent and alleviate human suffering 
and safeguard the integrity and dignity of populations affected by natural hazards or 
human-induced  disasters,  including  in  protracted  crises  and  through  disaster 
preparedness before crises occur. 

The  scale  of  current  and  upcoming  challenges  require  the  EU  to  adapt  its  external  action 
financing,  to  fulfil  these  policy  objectives  and  better  serve  its  strategic  interests  while 
addressing crises and future critical trends post-2027. 

The context in view of the next multiannual financial framework  

Excessive complexity and inherent rigidities have hampered the EU budget’s impact in 
the  ongoing  and  previous  implementation  periods.  Currently,  several  programmes  may 
finance  similar  types  of  activities,  but  without  the  same  rules  and  conditions,  and  there  is 
insufficient  flexibility  to  respond  to  unforeseen  needs.  This  leads  to  inefficiencies  and 
administrative  burden  for  beneficiaries,  Member  States  and  the  Commission. In  addition,  a 
difficult budgetary situation (with the start of NextGenerationEU repayments, the increasing 
number of EU priorities and the tight fiscal situation of Member States) reinforces the need to 
reduce inefficiencies and administrative burden.  

The  Political  Guidelines6  of  the  European  Commission  2024-2029  acknowledge  that  ‘our 
spending is spread over too many overlapping programmes – many of which fund the same 
things  but  with  different  requirements  and  difficulties  to  combine  funding  effectively’.  The 
Guidelines set out that the next long-term budget needs to be more focused, simpler, with 
fewer programmes and more impactful. 

In  line  with  the  Political  Guidelines,  the  Commission  adopted  on  11  February  2025  the 
Communication ‘The road to the next multiannual financial framework’7, which states that ‘the 
next long-term budget will have to address the complexities, weaknesses and rigidities that are 
currently present and maximise the impact of every euro it spends’. The Communication also 
underlines that flexibility is key in guaranteeing the budget’s ability to respond to a changing 
reality. 

In  this  context,  impact  assessments  for  programmes  under  the  next  multiannual  financial 
framework (MFF) focus on how to streamline the architecture of the EU budget, thereby 
assessing  the  most  important  policy  choices  underpinning  the  legislative  proposals  for  the 
future  EU  programmes.  Policy  aspects  are  considered  in  the  analysis  of  the  context,  the 
problem  definition  and  the  objectives,  which  inform  the  choices  on  the  programme 

6 https://commission.europa.eu/document/download/e6cd4328-673c-4e7a-8683-f63ffb2cf648_en 
7 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025DC0046 

6 

 
 
 
 
 
 
 
architecture.  Given  that  the  proposed  architecture  of  the  next  MFF  will  be  significantly 
different from the current structure, the impact assessment does not include funding scenarios 
and, consequently, only qualitative cost-benefit analysis is possible. 

This  reflects  the  specificities  of  this  exercise,  as  acknowledged  in  the  Commission’s  better 
regulation rules. This impact assessment complies with Tool #9 of the better regulation toolbox, 
which states that ‘the special case of preparing a new multiannual financial framework is a 
unique process requiring a specific approach as regards scope and depth of analysis’. 

Objectives for the financing of EU external action in the next MFF 

While  the  2021-2027  architecture  already  resulted  from  a  streamlining  process  of  external 
financing, the objective set in the above-mentioned Communication is to continue our efforts 
to  better  align  external  action  financing  with  the  EU’s  strategic  interests  in  view  of 
mutually  beneficial  partnerships.  This  objective  sets  the  parameters  for  this  impact 
assessment  as  well  as  options  presented  in  view  of  the  legislative  proposal.  The  impact 
assessment  accompanies  the  Commission  proposal  for  the  basic  act  of  the  Global  Europe 
Instrument, the main external MFF spending programme. Such basic act provides the financial 
allocations, the objectives for the actions it is meant to finance as well as the available toolbox, 
while referring to the policy framework which underpins the implementation of the instrument. 

The following regulations form the legal framework for 2021-2027 corresponding to the 
scope of this impact assessment: 

•  The  Neighbourhood,  Development,  International  Cooperation  Instrument  –  Global 

Europe (NDICI-Global Europe)8. 

•  The Instrument for Pre-Accession Assistance (IPA III)9. 
•  Humanitarian aid (HUMA)10. 
•  The Ukraine Facility11. 
•  The Reform and Growth Facility for the Western Balkans12. 
•  The Reform and Growth Facility for the Republic of Moldova13. 

8  Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, 
Development and International Cooperation Instrument – Global Europe, amending and repealing Decision No 466/2014/EU 
and repealing Regulation (EU) 2017/1601 and Council Regulation (EC, Euratom) No 480/2009 
Commission Delegated Regulation (EU) 2021/1530 of 12 July 2021 supplementing Regulation (EU) 2021/947 of the European 
Parliament  and  of  the  Council  establishing  the  Neighbourhood,  Development  and  International  Cooperation  Instrument  – 
Global  Europe,  amending  and  repealing  Decision  No  466/2014/EU  of  the  European  Parliament  and  of  the  Council  and 
repealing Regulation (EU) 2017/1601 of the European Parliament and of the Council and Council Regulation (EC, Euratom) 
No 480/2009. 
9 Regulation (EU) 2021/1529 of the European Parliament and of the Council of 15 September 2021 establishing the Instrument 
for Pre-Accession assistance (IPA III) 
10 Council Regulation (EC) No 1257/96 of 20 June 1996 concerning humanitarian aid 
11 Regulation (EU) 2024/792 of the European Parliament and of the Council of 29 February 2024 establishing the Ukraine 
Facility 
12 Regulation (EU) 2024/1449 of the European Parliament and of the Council of 14 May 2024 on establishing the Reform and 
Growth Facility for the Western Balkans 
13 Regulation (EU) 2025/535 of the European Parliament and of the Council of 18 March 2025 establishing the Reform and 
Growth Facility for the Republic of Moldova - European Commission 

7 

 
 
 
 
 
 
 
 
The above-listed regulations will expire at the end of 2027 (with the exception of Humanitarian 
Aid), at the same time as the MFF 2021-2027 laid down in Council Regulation 2020/209314. 
A proposal for a more integrated successor instrument is thus needed. 

Enlargement: a renewed momentum 

Twenty  years  after  the  largest  enlargement  of  the  EU  and  ten  years  after  the  most  recent 
accession (Croatia), enlargement is again at the top of the EU agenda with nine candidate 
countries  and  one  potential  candidate.  The  importance  of  European  integration  was  further 
demonstrated  during  the  COVID-19  pandemic,  which  put  in  the  spotlight  Europe’s 
interconnectedness  and  the  need  to  face  global  challenges  together.  The  three  membership 
applications  from  the  EU’s  eastern  neighbours  in  the  wake  of  Russia’s  war  of  aggression 
against  Ukraine  in  2022,  and  the  ensuing  decisions  by  the  European  Council,  are  further 
testimony of the geopolitical weight of EU enlargement. The enlargement policy framework 
for the Western Balkans is historically based on the 2003 Thessaloniki agenda, laid down in 
the stabilisation and association agreements  and strengthened by the 2018 Western Balkans 
strategy15  and  the  2020  revised  enlargement  methodology16.  Enlargement  is  a  strategic 
imperative for the EU in the current challenging geopolitical context. 

A credible, merit-based prospect of EU membership can be a key driver of transformation, 
fostering reconciliation, stability, and socio-economic prosperity. It is a strategic choice of the 
(potential) candidate. EU accession is dependent (and conditional) on the progress made on the 
political,  economic  criteria  and  the  alignment  with  the  EU  acquis  established  at  the 
Copenhagen European Council in 1993 while abiding by the fair share principle17. The rule of 
law, democracy and fundamental values are the cornerstones of the EU’s enlargement policy. 
Past enlargements have helped strengthen the Single Market, opened trade and financial flows, 
thus contributing to economic growth, environmental protection, and job creation in the EU 
and the acceding countries. 

The 2024 Communication on pre-enlargement reforms and policy reviews18 confirms that the 
EU must deepen as it widens and calls for EU and future Member States being ready at the 
time of accession. The EU needs to provide sufficient support to enable candidate countries 
and  potential  candidates  to  adopt  the  relevant  acquis,  including  building  technical  and 
administrative  capacity,  notably  taking  into  account  that  some  of  the  chapters  require  large 
investments  especially  under  policy  clusters  4  (Green  agenda  and  connectivity)  and  5 
(Resources, agriculture and cohesion). The EU path of the Western Balkans and Türkiye has 
been  supported  through  the  Instruments  for  Pre-Accession  Assistance19  since  2007.  In  the 
current  MFF,  much  of  IPA  III  is  dedicated  to  the  Economic  and  Investment  Plan  for  the 

14 https://eur-lex.europa.eu/eli/reg/2020/2093/oj/eng 
15 EUR-Lex - 52018DC0065 - EN - EUR-Lex (europa.eu) 
16 Revised enlargement methodology (europa.eu). 
17 Pre-accession assistance is based on both a performance-based approach and the ‘fair share’ principle. According to the ‘fair 
share’ principle, assistance must be targeted and adjusted to the specific situations of beneficiaries, to ensure an appropriate 
level of support to all of them and avoid a disproportionately low level of assistance for some beneficiaries as compared to 
others. 
18 Communication on pre-enlargement reforms and policy reviews - European Commission (europa.eu). 
19 (IPA) I, II and III 

8 

 
 
 
 
 
 
 
 
 
Western Balkans, which supports sustainable connectivity, human capital, competitiveness and 
inclusive growth, and the twin green and digital transition. Continued support is furthermore 
provided to security, migration management, fighting organised crime and corruption. 

Since  2022,  Ukraine,  Moldova  and  Georgia  have  been  granted  candidate  status  and 
Ukraine and Moldova have opened accession negotiations. The European Council also decided 
in March 2024 to open accession negotiations with Bosnia and Herzegovina. 

The  accession  paths  of  Moldova,  Georgia  and  partially  also  Ukraine  have  continued  to  be 
supported  under  NDICI-Global  Europe.  For  Ukraine,  faced  with  the  limitations  of  the  EU 
budget and given the Union’s strong political commitment to support Ukraine for as long as 
necessary,  in  February  2024,  the  EU  adopted  the  Ukraine  Facility20.  The  Facility  allows 
Ukraine to benefit from unprecedented support with up to EUR 50 billion over 2024-2027 in 
grants  and  loans,  promoting  the  recovery,  reconstruction,  modernisation  and  growth  of  the 
Ukrainian  economy,  embedded  in  Ukraine’s  EU  accession  path.  It  is  complemented  by  a 
comprehensive  financial  assistance  package  of  EUR  45  billion  by  the  EU  and  G7  partners, 
backed  by  the  establishment  of  a  Ukraine  Loan  Cooperation  Mechanism.  As  part  of  it,  an 
exceptional Macro-Financial Assistance loan of up to EUR 18.1 billion was adopted by the co-
legislators in October 2024. The Ukraine Loan Cooperation Mechanism provides Ukraine with 
non-repayable  financial  support,  stemming  from  extraordinary  profits  from  immobilised 
Russian central bank assets, for the repayment of the Macro-Financial Assistance loan. 

In 2023, the European Commission adopted ‘A new Growth Plan for the Western Balkans’21. 
Building  on  the  Union’s  full  and  unequivocal  commitment  to  the  Union  membership 
perspective of the Western Balkans, the Growth Plan aims at bringing some of the benefits 
of  membership  to  the  region  before  accession,  as  well  as  to  boost  economic  growth, 
accelerate the socio-economic convergence and tap on reforms in fundamental areas, such as 
connectivity, digitalisation, energy, public administration reform, the fight against organised 
crime, anticorruption and visa policy alignment. The anchor is the integration of the region in 
the EU’s Single Market, including the Digital Single Market. An integral part of the Growth 
Plan  is  a  new  performance  and  reform-based  Reform  and  Growth  Facility  for  the  Western 
Balkans22, complementing IPA III. It has EUR 6 billion in grants and loans over the 2024-2027 
period. 

In  October  2024,  the  European  Commission  adopted  a  ‘Growth  Plan  for  the  Republic  of 
Moldova’23 worth EUR 1.8 billion and underpinned by a Reform and Growth Facility for the 
period 2025-2027. The Growth Plan, which is the largest EU financial support package since 
Moldova's independence, will accelerate socio-economic and fundamental reforms (Pillar 1), 
enhance access to the EU Single Market (Pillar 2) and increase financial assistance through a 
dedicated Reform and Growth Facility for Moldova (Pillar 3). Together, the Plan and Facility 
will  enable  and  incentivise  reforms  and  the  investments  needed  to  accelerate  the  accession 
process as well as sustainable growth and decarbonisation of Moldova’s economy. 

20 The Ukraine Facility - European Commission (europa.eu) 
21 New Growth Plan for the Western Balkans - European Commission (europa.eu) 
22 pdf (europa.eu) 
23 Commission Communication on the Moldova Growth Plan 

9 

 
 
 
 
 
 
 
Türkiye remains a key partner of the EU. However, accession negotiations are at a standstill, 
as  Türkiye  has  not  reversed  the  negative  trend  of  moving  away  from  the  EU,  with  serious 
backsliding  especially  on  the  rule  of  law  and  on  fundamental  rights.  The  EU  and  Türkiye 
continue their engagement in line with the European Council conclusions of June 2021 in a 
phased, proportionate and reversible manner24. Cooperation on migration continues in  the 
framework of the 2016 EU-Türkiye Statement. 

Neighbourhood East and South: creating long term and mutually beneficial partnerships  

The  European  Neighbourhood  Policy  governs  the  EU's  relations  with  thirteen  of  its  closest 
neighbours. Creating long term and mutually beneficial partnerships based on common 
values  and  dialogue,  investing  in  a  people-centred  development  and  deploying  a 
comprehensive  approach  encompassing  humanitarian,  development,  political  and  security 
policies, all underline the EU’s strategic focus towards the neighbourhood.25 

The European Neighbourhood Policy was reviewed in 201526 to add three joint priorities for 
cooperation (economic development for stabilisation, security, migration and mobility) and put 
differentiation at the centre, recognising  different  aspirations of partner countries through 
tailor-made bilateral partnerships. At its core is the ambition to deepen engagement with civil 
society  and  social  partners.  The  European  Neighbourhood  Policy  offers  partner  countries 
greater access to the Single Market and to EU programmes. 

Neighbourhood East 

In  the  neighbourhood  East,  the  Eastern  Partnership  was  established  in  2009  with  the  main 
purpose  to  enhance  the  political  association  and  economic  integration  of  the  six  Eastern 
partners27. For the period  beyond 2020,  the new agenda for  the Eastern  Partnership28 is 
centred around governance and investment and sets resilience as an overarching  priority. In 
December 2023, the EU moved Moldova, Ukraine and Georgia under the enlargement policy.29  

Neighbourhood South 

The neighbourhood South covers ten countries of the Mediterranean and Middle East region30. 
Relations with the region have been revitalised by the new Agenda for the Mediterranean 
of 202131, which focuses on five priority areas: (1) Human development, good governance and 
the  rule  of  law;  (2)  Resilience,  prosperity  and  digital  transition;  (3)  Peace  and  security;  (4) 
Migration and mobility; and (5) Green transition. The EU has also upgraded its relationship 
with the Gulf countries through its ‘Strategic Partnership with the Gulf’, which covers areas 

24 European Council conclusions on external relations, 24 June 2021 - Consilium (europa.eu) 
25 e6cd4328-673c-4e7a-8683-f63ffb2cf648_en (europa.eu) 
26 Joint Communication JOIN/2015/050 final of the European Commission and High Representative of 18 November 2015 on 
the Review of the European Neighbourhood Policy 
27 Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine 
28 Joint Communication JOIN(2020) 7 final of the European Commission and High Representative of 18 March 2020 on the 
Eastern Partnership policy beyond 2020: Reinforcing Resilience – an Eastern Partnership that delivers for all 
29 Joint Communication JOIN(2020) 7 final of the European Commission and High Representative of 18 March 2020 on the 
Eastern Partnership policy beyond 2020: Reinforcing Resilience – an Eastern Partnership that delivers for all 
30 Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine, Syria and Tunisia 
31 Joint Communication JOIN(2021) 2 final of the European Commission and High representative of 9 February 2021 on a 
Renewed partnership with the Southern Neighbourhood – a New Agenda for the Mediterranean 

10 

 
 
 
 
 
 
 
such  as  trade,  digitalisation,  energy,  people  to  people  exchanges  and  partnerships  at 
institutional level. 

Building upon the 2021 Agenda, the upcoming Pact for the Mediterranean will aim at taking 
advantage of the proximity between the EU and the region, in order to create a common space 
that can be mutually beneficial to both shores of the Mediterranean. Focus will be on concrete 
projects  structured  around  a  bilateral  dimension,  with  Strategic  and  Comprehensive 
Partnerships (based on the example of those already signed with Egypt, Jordan and Tunisia), 
and regional initiatives, including strategic investments. The appointment of a Commissioner 
with a dedicated portfolio for the Middle East, North Africa and the Gulf further underlines the 
strategic importance of the region and reflects the interrelations among the three areas with a 
key impact on the EU. 

Over  2021-2027,  NDICI-Global  Europe  supports  the  implementation  of  the  European 
Neighbourhood Policy. The allocation for the entire neighbourhood region is set at EUR 19.3 
billion, reinforced with an additional EUR 3.6 billion for the Southern neighbourhood allocated 
during the mid-term revision of the MFF. Both the renewed Eastern Partnership and the Agenda 
for the Mediterranean are accompanied by their respective Economic and Investment Plans, 
with the ambition to mobilise investments up to EUR 17 billion for the Eastern32 and EUR 30 
billion  for  the  Southern  neighbourhood,33  bearing  mutual  benefits  on  sustainability, 
competitiveness, energy transition and security. This is complemented by support to the macro-
economic stability of key partner countries in the region. 

A paradigm shift in the EU’s international partnerships  

Eradicating poverty is the primary objective of the EU’s development cooperation, as set out 
in Article 208 of the Treaty on the Functioning of the European Union34. At global level, the 
EU’s compass is the universally endorsed UN Agenda 2030 and its 17 SDGs35. Despite the 
efforts, the SDG financing gap remains vast, and the current financial system is ill-equipped to 
close  it.  Simultaneously,  poly-crises  from  geopolitical  tensions  to  conflicts,  threats  to  the 
climate, environment and biodiversity, economic coercion and increasing fragility call for both 
swift responses and sustainable solutions. 

Since 2021, the EU has revamped its model of international cooperation beyond its immediate 
neighbourhood  in  line  with  new  global  realities.  This  paradigm  shift  derives  from  a 
recognition  that  the  EU  should  move  away  from  donor-recipient  dynamics  and  present 
partnership offers that are bolder, sustainable and based on shared interests and values. Long-
term mutually beneficial partnerships with countries in Sub-Saharan Africa, Asia and the 
Pacific, as well as in Latin America and the Caribbean, should underpin the new EU economic 
foreign policy and efforts to strengthen a rules-based multilateral order. 

32 Joint Staff Working Document of the European Commission and High representative of 2 July 2021 on Recovery, resilience 
and reform: post 2020 Eastern Partnership priorities 
33  Joint  Staff  Working  Document  of  the  European  Commission  and  High  representative  of  9  February  2021  on  Renewed 
Partnership with the Southern Neighbourhood Economic and Investment Plan for the Southern Neighbours 
34  OJ C 326, 26.10.2012, p. 47 
35 Sustainable Development Goals sdgs.un.org 

11 

 
 
 
 
 
 
 
The Global Gateway strategy is at the core of the EU’s economic foreign policy agenda. It is 
a key enabler for European competitiveness and has been designed as a positive offer to EU 
partners, enabling the EU to deliver on the twin transition and human development objectives 
while bringing mutual benefits to the EU and its partners alike and helping to close the SDG 
financing gap. By mobilising investments worth EUR 300 billion in the EU’s partner countries 
by 2027, the strategy aims to promote greater public and private investments in sustainable 
connectivity,  notably  through  transport,  climate  and  energy,  digital  infrastructure,  health, 
education and research, which also leads to strengthening the Union’s geopolitical and geo-
economic  presence.  It  encompasses  not  just  hard  infrastructure,  but  also  investments  in 
resource  efficiency  and  sustainable  food  systems,  skills,  access  to  sustainable  financing, 
regulatory support, voluntary technology transfer and knowledge sharing, while at the same 
time  supporting  a  conducive  regulatory  and  policy  environment  and  promoting  EU  and 
international standards, values and principles. 

Global Gateway is implemented in a Team Europe approach36, which helps to pool funding, 
expertise and to nurture strategic cooperation. The EU responded the COVID-19 pandemic by 
developing the Team Europe approach, which brings together the EU, its Member States, their 
diplomatic  networks,  implementing  agencies  and  development  finance  institutions,  export 
credit agencies, the EIB, the EBRD, as well as the private sector. 

Furthermore, the Commission and the High Representative adopted political strategies to set 
out the framework for relations with partner countries and regions in Africa37, Asia and the 
Pacific38 and Latin America and the Caribbean39. In November 2023, the EU and its Member 
States, and the 79 Members of the African, Caribbean and Pacific States signed the successor 
to the Cotonou Agreement: the Samoa Agreement40. 

For the period 2021-2027, under NDICI-Global Europe, the initial allocation for Sub-Saharan 
Africa, Asia and the Pacific, and the Americas and the Caribbean totalled EUR 41.1 billion. 
The budget for thematic programmes was set at EUR 6.4 billion, while EUR 3.2 billion were 
allocated to rapid response actions worldwide and EUR 9.5 billion to a general reserve (the 
‘emerging challenges and priorities cushion’). 

36 Joint Communication JOIN(2024) 25 final to the European Parliament, the Council, the European Economic and Social 
Committee,  the  Committee  of  the  Regions,  and  the  European  Investment  Bank  –  Building  sustainable  international 
partnerships as a Team Europe 
37 The Joint Communication “Towards a comprehensive strategy with Africa” and the joint statement “A Joint Vision for 
2030”, following the 6th EU-African Union Summit in 2022, consolidated a renewed partnership for solidarity, peace and 
sustainable economic development and prosperity between Europe and Africa. In this context, the Africa-Europe Investment 
Package of EUR 150 billion has been designed to support these common ambitions. 
38  The  Council  Conclusions  on  an  EU Strategy  for  cooperation  in the  Indo-Pacific,  the  Joint  Communication  “A  strategic 
partnership  with  the  Gulf”  and  the  Joint  Communication  “The  EU  and  Central  Asia:  New  Opportunities  for  a  Stronger 
Partnership” reinforced the EU approach in Asia and the Pacific to strengthen resilience and economic cooperation, foster 
prosperity and improve the work with partners in the region. 
39 Political engagement between the EU and the Latin American and Caribbean countries has been reinforced through the Joint 
Communication “New Agenda for Relations between the EU and Latin America and the Caribbean”, which was published in 
June 2023 on the road to the 2023 EU-CELAC Summit. The Global Gateway Investment Agenda represents the operational 
arm of this political commitment. 
40  Partnership  Agreement  between  the  European  Union  and  its  Member  States,  of  the  one  part,  and  the  Members  of  the 
Organisation of African, Caribbean and Pacific States, of the other part, OJ L, 2023/2862, 28.12.2023 

12 

 
 
 
 
 
 
 
EU humanitarian action: projecting EU solidarity and humanity 

In a global context of rising needs, climate change, and geopolitical power shifts threatening 
multilateralism and politicising humanitarian aid, EU humanitarian action is one of the most 
tangible, quick and visible elements of EU solidarity and humanity, providing assistance on 
the basis of needs and in line with humanitarian principles, in coordination with the UN System. 
41 

The EU is one of the world’s leading humanitarian donors with a budget of around EUR 
15 billion for the period 2021-2027, providing  assistance, relief and protection to  people in 
third countries who are  victims of natural  or human-induced disasters,  as established in  the 
Treaty on the Functioning of the European Union.42  

Humanitarian  aid  is  a  shared  competence  and  EU  Member  States  can  act  in  parallel.  The 
Commission  may  take  initiatives  to  enhance  the  efficiency  and  complementarity  between 
actions  of  the  EU  and  Member  States.  The  overall  policy  framework  for  humanitarian 
assistance  is  outlined  in  the  2007  European  Consensus  on  Humanitarian  Aid,43  jointly 
adopted by the Parliament, the Commission, the Council and EU Member States. It reaffirms 
the EU’s commitment to the humanitarian principles – humanity, neutrality, impartiality and 
independence – and to the respect of international humanitarian law. The Consensus confirms 
the EU’s support for a stronger and coordinated international humanitarian system and stresses 
the importance of strengthening disaster risk reduction, as well as effective linkages between 
emergency relief, anticipatory action, and long-term development aid. 

Moreover, the 2021 Communication on “The EU’s humanitarian action: new challenges, same 
principles”,44  provides  for  a  clear  and  comprehensive  approach.  Since  its  adoption,  the 
unfolding  of  the  crises  in  Afghanistan,  Ukraine,  Sudan  and  Gaza  have  driven  needs  to 
unprecedented levels and have further illustrated the magnitudes of the challenges faced by 
the humanitarian aid sector. 

2.  PROBLEM DEFINITION 

Introduction 

Today, following years of instability in the EU’s neighbourhood and beyond, the geopolitical 
stakes for the EU are far higher than when the 2021-2027 MFF was adopted. The EU operates 
in a highly volatile and unpredictable environment, characterised by geopolitical rivalry45, 
geoeconomic competition, strategic dependencies, competitiveness challenges, the worsening 

41 Joint Communication on the Climate-Security Nexus | EEAS 
42 OJ C 326/47, 6.10.2012, Article 214 
43  Joint  Statement  by  the  Council  and  the  Representatives  of  the  Governments  of  the  Member  States  meeting  within  the 
Council, the European Parliament and the European Commission, OJ C 25, 30.1.2008 
44 Communication from the Commission to the European Parliament and the Council on the EU’s humanitarian action: new 
challenges, same principles, COM(2021) 110 final, 10 March 2021 
45  Veron,  P.,  Perceptions  of 
https://ecdpm.org/work/perceptions-eus-international-cooperation-navigating-troubled-waters  

international  cooperation:  navigating 

troubled  waters,  ECDPM,  2025, 

the  EU’s 

13 

 
 
 
 
 
 
 
 
triple planetary crisis of climate change, biodiversity loss and pollution, and increasing global 
fragility.  The  trend  towards  greater  polarisation,  global  friction,  resource  scarcity  and 
competition is likely to be a defining feature in the period to 2040. The shift from cooperation 
to competition poses critical questions for the EU’s future role in the global stage.46 

The  growing  challenges  to  the  international  rules-based  order  and  the  global  economic 
governance are defining elements of this friction47, challenging the premises of the EU’s 
long-term foreign policy vision48. Multilateral institutions have become less effective and trust 
in them is declining49, while reciprocal and transactional foreign policy is gaining ground and 
redirecting  focus  to  bilateral  relations  and  short-term  gains.  War  on  the  EU’s  doorstep  and 
rising  centres  of  influence50  impacting  the  global  value  chains  call  for  a  higher  degree  of 
European open strategic autonomy and preparedness. Slow economic growth since the start of 
the century combined with deteriorating trade dynamics challenge the EU’s competitiveness51.  

Simultaneously, and whilst the SDG financing gap continues to widen, official development 
assistance  contributions  by  developed  countries  are  shrinking.  In  March  2025,  the  US 
announced  it  had  terminated  more  than  80%  of  its  external  aid  programmes  under  USAID 
while  the  remaining  ones  were  to  be  administered  by  the  State  Department.  Budgetary 
constraints drive several EU Member States and other likeminded partners to reduce ODA.  

The EU’s economic security, open strategic autonomy, competitiveness, prosperity, resilience, 
as well as its capacity to promote its interests, values and standards are inextricably linked to 
these  global  developments.  As  emerging  economies  and  established  powers  alike  position 
themselves  as  leaders  in  key  sectors,  the  EU  economy  faces  critical  dependencies  and 
vulnerabilities,  including  in  its  supply  chains  and  in  the  access  to  sources  of  energy  and 
strategic resources, such as critical raw materials. There is a heightened understanding among 
the stakeholders, EU institutions and citizens about these risks. 66.2% of the respondents of 
the  Open  Public  Consultation  (OPC)  expected  that  EU  external  financing  promotes  EU 
interests, including European competitiveness52. In similar vein, and among its external action 
priorities  for  the  next  MFF,  the  European  Parliament  calls  on  the  Union  to  boost 
competitiveness and the security of global supply chains53.  This challenge was also addressed 
by  the  participants  to  the  ‘European  Citizens’  Panel  on  a  new  European  Budget  fit  for  our 
ambition’,  which  recommended  the  EU  budget  to  support  and  invest  in  areas  such  as 

46  Choosing  Europe’s  future;  global  trends  to 2040,  https://espas.eu/files/espas_files/about/ESPAS-Global-Trends-to-2040-
Choosing-Europes-Future-EN.pdf 
47  Hurrell.  A.,  Geopolitics  and  Global  Economic  Governance,  Oxford  Review  of  Economic  Policy,  2024,  2, 
https://academic.oup.com/oxrep/article/40/2/220/7691461  
48 Michalski A. and Parker C., The EU’s evolving leadership role in an age of geopolitics: Beyond normative and market 
power in the Indo-Pacific, European Journal of International Security, 2024, 2, https://doi.org/10.1017/eis.2023.34 
49 Muench S. et al., Risks on the Horizon, 2024, EU Policy 
Lab,https://publications.jrc.ec.europa.eu/repository/handle/JRC137493 
50 Vinjamuri, L. (editor), Competing Visions of International Order, 2025, Chatham House, 2025-03-27-competing-visions-
international-order-vinjamuri-et-al 
51  Draghi,  M.,  The  Future  of  European  Competitiveness,  2024,  https://commission.europa.eu/topics/eu-
competitiveness/draghi-report_en 
52  The breakdown of  the  66.2%: 42.1% of  the  respondents  expected  promotion  of the  EU’s  interests  (including  European 
competitiveness) “to a large extent’ while 24.1% “somewhat” expected it. 
53  European  Parliament  resolution  of  7  May  2025  on  a  revamped  long-term  budget  for  the  Union  in  a  changing  world, 
https://www.europarl.europa.eu/doceo/document/TA-10-2025-0090_EN.html  

14 

 
 
 
 
 
 
 
democracy, internal security as well as independence from external actors, economic power, 
technological development and cultural influence to strengthen EU diplomacy. 

Furthermore, global fragility is on the rise. Compounded by the impacts  of climate change, 
demographic  trends  and  increasing  levels  of  poverty  and  inequalities  within  and  between 
countries  are  important  drivers  of  social  unrest,  political  instability  and  conflict.  The 
complexity of crises in fragile contexts puts to the test the EU’s capacity to swiftly implement 
rapid  and  impactful  responses,  accompanied  by  coherent  short  to  medium-  and  long-term 
actions directed towards stability and, where possible, investments. The existing international 
financing architecture is neither fit nor fair for fragile countries, leaving them vulnerable to 
relapse and conflict or turning to other political allies. The importance of tackling fragility is 
recognised  by  the  EU  stakeholders  and  institutions.  76.8%  of  the  respondents  of  the  OPC 
expected EU external financing to contribute to the engagement in fragile contexts54. Less than 
50% of the respondents believed that EU external financing is sufficiently flexible to respond 
in a timely manner to crises and secure stability at the EU’s borders and beyond55. However, 
at  the  same  time  the  OPC  results  signal  that  flexibility  should  always  complement 
predictability. The Council has also recalled the urgent need to build resilience, particularly in 
the  conflict-affected  and  fragile  contexts,  with  a  focus  on  addressing  immediate  needs  and 
investing in prevention.56  

In the coming years, and in strong correlation with fragility, the EU will likely face continuous 
migratory  pressures  and  challenges  of  forced  displacement,  fuelled  by  conflict, 
demographic developments and weak economic development. The European Citizens’ Panel 
acknowledged  the  importance  to  address  the  root  causes  of  migration  via  development  and 
humanitarian aid focusing on Africa and conflict-affected countries.  

In addition, and while the world has fewer democracies than autocracies for the first time in 20 
years,  the  EU  will  face  a  range  of  risks  in  the  areas  of  space,  cybersecurity,  artificial 
intelligence, hybrid threats, disinformation, and particularly foreign information, manipulation 
and  interference  by  foreign  powers,  radicalisation  and  terrorism.  Simultaneously,  civic  and 
democratic spaces may shrink further, curbing the ability of civil society organisations to act 
and limiting the involvement of young people in policymaking57. These issues were identified 
in the OPC, in particular by CSOs working on human rights and democracy. The European 
Citizens’  Panel  stressed  that  the  Charter  of  Fundamental  Rights  of  the  EU  is  a  compass  in 
enlargement, bilateral partnerships, migration and other matters where integration is key. 

The  above-mentioned  dynamics  are  gradually  affecting  EU  policies  and  challenge  sectoral 
approaches  to  policymaking.58  Against  this  backdrop,  the  link  between  EU  external  and 

54 The breakdown of the 76.8%: 54.5% of the respondents expected engagement in the fragile contexts “to a large extent” 
while 22.3% “somewhat” expected it. 
55 Only 7,8% of the respondents “to a large extent” believe that the EU funding is sufficiently flexible to respond to crises and 
secure stability at the EU’s borders and beyond. 
56  Council  conclusions  of  26  May  2025,  ahead  of  the  4th  International  Conference  on  Financing  for  development 
https://data.consilium.europa.eu/doc/document/ST-9394-2025-INIT/en/pdf 
57  The  respondents of  the  Open  Public  Consultation  expected  that the  EU  external  funding  contributes  to  a  wide  array  of 
objectives, inter alia human rights, democracy and rule of law, peace and security, green and digital transitions, migration and 
asylum, and fight against disinformation. 
58  Strategic 
foresight 
8ef619fc6b6c_en?filename=SFR-23-beautified-version_en_0.pdf 

report  2023;  https://commission.europa.eu/document/download/ca1c61b7-e413-4877-970b-

15 

 
 
 
 
 
 
 
internal policies has become increasingly relevant but is currently not sufficiently catered for 
– neither in the external nor in the internal financing instruments – and the interplay of external 
and internal financing instruments is sub-optimal. In particular, the EU needs to rethink how 
its  external  engagement  can  repower  its  prosperity  to  remain  a  credible  player  on  global 
challenges. This calls for a careful allocation of resources to support EU’s growth, which will 
stem from a new combination of different components: an enlarged Single Market, a stable and 
dynamic neighbourhood, a string of partnerships aiming at reducing strategic dependencies and 
expanding  economic  opportunities  across  the  globe.  In  this  respect,  the  EU  will  face  the 
challenge of striking the right balance between acting with others when it can and reinforcing 
its capability to act autonomously when it wishes or is obliged to do so. Strengthening alliances 
may be just as crucial as building new ones.59   

While  current  external  financing  instruments  are  effective  in  delivering  on  their  expected 
results,  the  changing  geopolitical  landscape  and  the  era  of  poly-crises  have  exposed  some 
architectural weaknesses in their design. Sub-optimal policy coherence and flexibility in the 
implementation  of  the  EU’s  external  financing  instruments  hamper  the  Union’s  capacity  to 
advance  strategic  interests  and  address  fragility  and  crises  situations.  This  observation  was 
supported in the responses of the OPC. Companies suggested the Union to ensure coherence 
and  long-term  vision  as  well  as  flexibility  and  speed  in  its  (Team  Europe)  projects. 
Development finance institutions called for a greater flexibility, allowing for quick responses 
especially in situations of fragility. At the same time, it was essential for the respondents of the 
OPC  that  Europe  remains  a  credible  partner,  reinforcing  its  position  as  a  global  force  for 
stability, sustainability and shared prosperity. 

Following the problem definition, three problem drivers have been identified, as explained 
below.  These  problem  drivers,  driving  sub-optimal  coherence  and  flexibility,  have  been 
identified at the level of the architecture of the external financing instruments, to advise the 
policy makers on certain weaknesses and gaps in the instruments. The identification of problem 
drivers  is  supported  by  stakeholder  views  (including  OPC)  and/or  the  Commission’s 
operational practice over the past years. 

1)  IMPLEMENTATION LEVEL  

Insufficient  adaptative  capacity  to  a  fast-changing  world  because  the  interplay  between 
programmable  and  non-programmable  actions  is  not  always  fit  for  purpose.  Programmable 
actions refer to action that is typically programmed multiannually, to advance policy objectives 
under  the  pre-accession,  neighbourhood  and  international  partnerships  policies.  Non-
programmable actions are more reactive in nature, though very often planned in advance. The 
combination of these two types of tools is important to foster a coordinated and impactful EU 
response to local contexts and developments. 

2)  INSTRUMENT LEVEL: 

Partner country, regional and global contexts evolve rapidly while the split between IPA III, 
NDICI-Global  Europe  and  humanitarian  aid  is  not  conducive  to  swift  adaptation.  Different 

59  Choosing Europe’s future; global trends to 2040, https://espas.eu/files/espas_files/about/ESPAS-Global-Trends-to-2040-
Choosing-Europes-Future-EN.pdf 

16 

 
 
 
 
 
 
 
strands  of  external  action  financing  are  currently  fragmented  into  different  financing 
instruments,  with  the exception of the Neighbourhood policy and International  Partnerships 
policy  financing  which  are  part  of  NDICI-Global  Europe.  The  current  framework  creates 
rigidities between instruments, including on shifting of funds between different instruments. It 
also gives rise to high coordination efforts which can hamper synergic and coherent approaches 
at the regional level, for instance in the contexts of fragility (i.e. humanitarian-development-
peace  nexus),  and  interplay  between  the  Enlargement  and  Neighbourhood  policies.  This 
fragmentation  has  limited  the  EU’s  responsiveness  to  unforeseen  developments  in  the 
enlargement  region  with  new  membership  applications,  leading  to  the  creation  of  ad  hoc 
instruments  to  cater for  new needs.  Several contributions to  the OPC  consider  the previous 
merge  of  external  financing  instruments  as  a  positive  development.  They  consider  that  this 
merge  significantly  streamlined  the  collaboration  between  the  EU  and  its  implementing 
partners.  

3)  TOOLBOX LEVEL:  

There is only a limited interplay between current internal and external financing instruments, 
which stems  from  inadequate policy coherence  between internal  and external  policies. This 
inadequacy does not serve the Union’s new objective to build mutually beneficial packages 
with partner countries.  

Furthermore, the existing toolbox (implementation modalities) is not sufficient to advance the 
EU’s  strategic  interests.  While  private  sector  involvement  is  needed  to  boost  sustainable 
development  in  partner  countries  and  to  support  the  EU  priorities  such  as  competitiveness, 
traditional  development  finance  instruments  are  not  sufficiently  appealing  to  private 
investors60. This means that European private sector’s potential is  underused in the external 
financing  instruments.  Two-thirds  of  the  respondents  to  the  OPC  considered  important  to 
encourage private sector investments to increase the total funding for development to achieve 
the SDGs. As shown by the OPC results, companies in particular supported the idea of creating 
a more competitive and more compelling Team Europe offer in terms of scale, flexibility and 
speed. While the private sector has called for new tools in the context of the Global Gateway 
Business Advisory Group61 62, the OPC results also illustrated that the European private sector 
expects the toolbox to be enlarged with new innovative mechanisms.  The Council has also 
reiterated  the  importance  of  mobilising  private  finance  towards  sustainable  development, 
including to leverage domestic, bilateral, triangular and multilateral public resources to achieve 
scale  and  impact.  It  has  called  for  effective  use  of  innovative  financial  instruments  with 
financial additionality.63 

Finally, under the current MFF, increased needs in fast-changing contexts have demonstrated 
the insufficient capacity to leverage EU funds and optimise the impact of external funding. 

60 Bilal S. and Klasen A., Delivering on Global Gateway: Strengthening Development and Export Finance Complementarity 
and  Coordination,  2025,  ECDPM,https://ecdpm.org/work/scaling-global-gateway-boosting-coordination-development-
export-finance 
61  Digital  SME  Alliance  et  al.,  Discussion  Paper:  SMEs  as  part  of 
https://www.digitalsme.eu/global-gateway-smes-voice-their-requests-to-the-commission/ 
62  EBCAM,  EMCAM  recommendations  to  policy  makers:  Engaging  the  European  Private  Sector  in  the  Global  Gateway 
Strategy for Africa, 2025, https://www.ebcam.eu/images/PDF/Position_paper_EBCAM_2025_02.04.pdf 
63 https://data.consilium.europa.eu/doc/document/ST-9394-2025-INIT/en/pdf 

the  Global  Gateway  Strategy,  2024, 

17 

 
 
 
 
 
 
 
 
 
The next sub-chapters look into policy-specific challenges more in detail. 

The enlargement’s key challenge: accelerating socio-economic convergence  

The  next  enlargement  is  perceived  as  a  ‘geostrategic  investment  in  peace,  security, 
stability  and  prosperity’  and  a  direct  response  to  Russia’s  war  of  aggression  against 
Ukraine64,, as well as an ‘economic and moral imperative’65. The EU promotes the (potential) 
candidate countries’ gradual  integration into the Single Market  prior to  accession, based on 
their alignment with EU rules and standards, as a possibility to unlock some of the accession 
benefits  and  obligations  earlier  on.  This  contributes  to  the  competitiveness  of  the  EU’s 
economy  and  make  it  more  fit  to  tackle  global  challenges,  including  the  green  and  digital 
transitions.  Enlarging  the  EU  could,  among  others,  further  facilitate  energy  infrastructure 
development and bolster the EU’s energy security, affordability, and decarbonisation. 

According  to  the  most  recent  enlargement  package66,  the  Western  Balkans  and  Türkiye  are 
moderately  prepared  to  accede  to  the  Union.  This  has  also  been  confirmed  by  external 
evaluations67, ECA audits68 and the result frameworks for the performance of the EU budget. 
Ukraine,  Moldova  and  Georgia  have  a  similar  preparedness.  This  being  said,  the  limited 
administrative capacity to align with the acquis and the cost of implementation, while keeping 
pace with EU regulatory developments, requires financial support and in-depth strengthening 
to advance complex accession negotiations and deliver on structural reforms. The scale of the 
investment needed to implement the acquis will be significant for many sectors69. Mobilising 
the necessary financing will be key as much as developing the capacity to identify and make 
these investments. 

The  slow  progress  of  socio-economic  convergence70,  which  is  in  part  induced  by  slow 
progress on reforms, lack of political will, lack of data and administrative capacity constraints, 
limits  the  benefits  of  a  deepened  integration  and  market  opening.  Tangible  and  irreversible 
progress,  starting  with  the  fundamentals  (including  democracy,  rule  of  law,  fight  against 
corruption and organised crime) of the EU accession process is needed. Keeping pace with EU 
regulatory  developments  will 
instance,  achievement  of 
decarbonisation  will  be  ambitious  given  the  diversity  of  national  energy  mixes.  Another 
example  is  customs,  where  candidate  countries  must  be  equipped  upfront  to  control  and 
supervise the (new) EU external borders according to EU standards and rules, facilitating trade 

remain  challenging.  For 

64  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social 
Committee and the Committee of the Regions. 2023 Communication on EU Enlargement Policy, Brussels, 8.11.2023 COM 
(2023) 690 final, 8.11.2023, available here 
65 Mission Letter to Marta Kos, Commissioner-designate for Enlargement 
66 Strategy and Reports - European Commission 
67 Evaluation of the European Union’s External Financing Instruments (2014-2020 and 2021-2027) 
68 Special Report 01/2022: EU support to the rule of law in the Western Balkans (europa.eu) 
69 For example, based on the 2004 enlargement, the investments needed for the current candidate countries to implement the 
environmental acquis will be of the magnitude of at least EUR 100 billion. 
70 The Western Balkans’ level of economic convergence in terms of GDP per capita in purchas g power standards is at between 
30% and 50% of the EU average and is not progressing fast enough impacting on the prosperity, stability and security of the 
region. 

18 

 
 
 
 
 
 
 
 
 
and supporting competitiveness, while securing the flow of goods. Similarly, the EU needs to 
provide sufficient support to enable candidate countries to adopt the relevant acquis, including 
building technical and administrative capacity. 

Ukraine  faces,  in  addition,  the  challenge  of  Russia’s  war  of  aggression  resulting  in 
destructions  of  key 
infrastructures,  critical  assets  and  the  contamination  of 
approximately  25%  of  its  territory  with  mines  and  explosive.  This  will  entail  massive 
reconstruction costs. Moreover, as a result of EU commitments, significant resources would be 
required to integrate Ukrainian and EU Defence industrial and technological bases. 

Specific challenges affecting the EU’s neighbouring countries71 

Economic performance in the neighbourhood is held back due to weaknesses in the business 
environment  and  constraints  to  human  capital,  especially  related  to  demographic 
challenges, low level of digitalisation, the low-quality of education and training systems and 
an  ever-increasing  brain-drain.  Lack  of  decent  and  safe  jobs  and  insufficient  investment  in 
active inclusion and non-discrimination leave many potential contributors outside the labour 
market. The private sector, on the other hand, struggles to find talents with the right skills. 

Investment is disincentivised by limited fiscal space, inadequate standards of rule of law as 
well as persistent weaknesses in administrative capacity and governance. The economies are 
rattled by high inflation and public debt levels that call for economic reforms. Connectivity 
gaps, a heavy predominance of the informal sector, and an undiversified production base that 
is largely focused on sectors with low value added are also persisting problems. 

The  countries  face  challenges  in  their  public  health  and  social  protection  systems  and 
significant  gender  inequalities.  Many  partners  also  face  challenges  with  democratic 
governance,  fundamental  rights  and  justice  reform,  high  corruption  and  weak  public 
administrations  with  lack  of  reliable  statistics.  There  is  often  a  lack  of  political  will  to 
address these challenging reforms because they touch upon vested interests and require long-
term commitment beyond the mandate of the governments. 

Recent and prolonged conflicts such  as conflicts  in  the Middle East,  the conflict  between 
Armenia and Azerbaijan, and Russia’s war of aggression against Ukraine, impact the whole 
area. They increase political instability and the migratory pressure to the EU. These conflicts 
also create new hybrid threats, increasing inflation, exacerbating poverty, as well as food and 
energy insecurity in the EU. They disrupt EU value chains and the supply of commodities and 
critical raw materials. The EU is also confronted with the growing influence of foreign actors 
(e.g. Russia, China), including in the provision of critical infrastructures such as digital and 
telecommunication  networks,  and  a  “battle  of  narratives”,  including  that  of  alleged  double 
standards by the EU. 

These challenges will limit progress in other key priority areas - the investment agenda of green 
and  digital  transition,  transport,  energy,  and  private  sector  development,  but  also  in  the 
reconstruction of Ukraine and Gaza. The limited socio-economic convergence with the EU in 

71  Maghreb  and  Mashreq  countries,  and  Israel  (neighbourhood  South),  Armenia,  Azerbaijan,  Belarus,  Georgia,  Moldova, 
Ukraine (neighbourhood East), Western Balkans and Türkiye 

19 

 
 
 
 
 
 
 
the case  of the  Western Balkans, Türkiye, Ukraine, Moldova and Georgia pose a particular 
challenge to their enlargement perspective. 

Focus on Middle East, North Africa and the Gulf 

The  Middle  East,  North  Africa  and  Gulf  region  includes  diversified  realities,  with  both 
fragile/conflict affected countries and partners that are key to maintain its stability. 

There is a large unexploited potential to develop connections in sectors such as trade, digital, 
energy,  connectivity  and  culture.  Harnessing  this  potential  will  require  investing  smartly  in 
political and economic exchanges with a diversified set of stakeholders. The growing share of 
young people will also need to be factored in as it is a source of opportunities and challenges. 

At the same time, the region is grappling with a complex set of challenges that have profound 
implications both locally and for the EU. The evolution of the conflicts in the Middle East in 
the recent years has compounded the concerns related to the significant migration and refugee 
crisis. In this respect, the growing instability has become a focal point of geopolitical concern. 

The level of destruction created by the conflicts (in Gaza, Lebanon or Syria) has also raised 
pressing needs for large-scale reconstruction. Countries in the region face the daunting task 
of  rebuilding  vital  infrastructure,  housing,  and  essential  services  against  a  backdrop  of 
constrained financial resources. The limited financing options available are further exacerbated 
by  the  economic  ramifications  of  prolonged  instability,  leaving  governments  and  local 
communities without the means to effectively address these urgent needs. 

Addressing all these challenges will be key to achieve shared stability and security, prosperity 
and mutual opportunities so that the EU’s investment in the region can provide clear political 
dividends. 

Finally,  the  EU’s  engagement  with  Gulf  countries  is  increasingly  important,  particularly 
given their strategic importance in addressing regional and global challenges. Arab donors are 
important  geopolitical  actors, assertive donors,  and active agenda-setters in multilateral  and 
international fora. 

International  partnerships:  addressing  the  SDG  financing  gap  through  strategic 
investment in a context of increased global fragility  

With only 17% of the SDGs targets72 on track, the world is lagging behind. The OECD 
estimates that the annual investment gap to reach them in developing countries stands at about 
USD 4 trillion annually73. This gap increased in the wake of the COVID-19 pandemic and was 
further  accelerated  by  Russia’s  war  of  aggression  against  Ukraine.  The  decision  of  the  US 
administration and other major donors to significantly scale down development assistance and 
humanitarian aid will likewise have a negative impact. 

72 The-Sustainable-Development-Goals-Report-2024.pdf 
73 OECD (2025), Global Outlook on Financing for Sustainable Development 2025: Towards a More Resilient and Inclusive 
Architecture, OECD Publishing, Paris, https://doi.org/10.1787/753d5368-en 

20 

 
 
 
 
 
 
 
Thus,  it  is  in  the  EU’s  and  its  citizens’  direct  interest  to  engage  with  developing  countries 
around the world. The EU’s partner countries in Sub-Saharan Africa, Asia and the Pacific 
and Latin America and the Caribbean are at the crossroads  of all the defining “mega 
trends” of our time, affecting the security and prosperity of the EU. The Union’s failure to 
engage with partners both bilaterally and in multilateral fora would mean slower progress on 
all  three  pillars  of  sustainable  development  (economic,  social  and  environmental),  with 
repercussions to global stability: 

•  Economic and social growth are hampered by structural constraints: weaknesses in 
the  business  environment,  lack  of  access  and  low  quality  of  education,  large 
infrastructure  gaps,  weak  regulatory  and 
institutional  environments,  and  an 
undiversified  production  base  that  is  largely  focused  on  extractive  sectors  with  low 
value added. This has direct consequences on poverty and inequalities. 

•  The triple planetary crisis of climate change, biodiversity loss  and pollution are 
global problems that do not know borders and impact all ecosystems on land and at sea 
as  well  as  food  security.  They  call  for  global  action  to  transition  to  low-carbon  and 
resource efficient economies and adapt to climate change impact. Both the EU and its 
partner countries committed to addressing climate change and biodiversity under the 
Paris Agreement and the Kunming-Montreal Biodiversity Framework. 

•  Digitalisation and the fast pace of technological innovation, including the advent of 
artificial  intelligence,  prove  to  be  challenging.  Partner  countries  are  becoming 
increasingly  dependent  on  high-risk  communication  networks  and  digital 
infrastructure. Next to this, there remains a significant digital divide, increasing cyber 
threats, and inadequate digital and cyber regulation. 

•  Strengthening  of  health  systems  and  their  resilience  as  well  as  preparedness  for 
preventing and combating global health threats remain insufficiently tackled around the 
world. 

•  The access to quality education and training in many partner countries remain too 
low, also when it comes to basic skills, resulting in a mismatch between education and 
the labour market, further undermining economic growth. 

•  Many  countries  around  the  world  continue  to  face  significant  gender  disparities  as 
well  as  gender-based  violence.  Civic  and  democratic  spaces  have  shrunk,  limiting 
even further the involvement of civil society organisations and young people in policy 
making. 

The complexity of crises in  fragile contexts puts  to  the test the EU’s capacity to  react  and 
implement impactful responses, building on coherent short to medium- and longer-term actions 
directed towards stability and, where possible, investments. While the Union has confirmed its 
position  as  the  world’s  leading  donor,  international  public  funding  can  only  offer  a  partial 
contribution to cover the financing gap.  

Therefore, addressing the issue of financing  for development, including through  leveraging 
broader public and private funds and facilitating debt sustainability, is essential. Progress 
has been made through the Team Europe approach to bring in the private sector and other new 

21 

 
 
 
 
 
 
actors, such as export credit agencies, to deliver on the EU policy objectives. Tools need to be 
further  developed  to  attract  private  investors  to  advance  sustainable  development  globally. 
Greater cooperation with emerging markets and developing economies will be needed to both 
tackle inequalities and support EU interests worldwide.  

Humanitarian aid: crisis of funding, morale and legitimacy  

The  global  humanitarian  system  is  grappling  with  an  unprecedented  increase  in  the  scale, 
frequency and complexity of crises, combined with significant aid cuts from major donors and 
severe violations of International Humanitarian Law. The humanitarian community confronts 
a massive crisis of funding, morale, and legitimacy. 

Humanitarian needs are at an all-time high and continue rising. By the end of 2024, 325.3 
million people in the world need humanitarian assistance and protection, and global funding 
requirements for the humanitarian response have skyrocketed to nearly EUR 45 billion, more 
than double compared to 2019. 

On  the  one  hand,  the  rise  in  humanitarian  needs  is  driven  by  multiple  and  often 
overlapping factors, including the multiplication and escalation of conflicts, insecurity, the 
aggravating impact of climate change acting also as a threat multiplier, which results in more 
impactful  natural  disasters  and  exacerbates  displacements,  as  well  as  disease  outbreaks  and 
socioeconomic  inequality.  Food  insecurity  and  malnutrition,  limited  access  to  water  and 
sanitation and to other basic services are only some of the major humanitarian challenges today. 

On the other hand, the costs of humanitarian operations are on the rise, making it even more 
difficult for donors and aid organisations to fulfil the demands for humanitarian assistance. 

Systematic  violations  of  international  humanitarian  law,  including  the  restriction  of 
humanitarian access, security challenges and targeting of aid workers, hinder the protection of 
civilians, undermine long-term prospects for development and continue to drive the increase 
of humanitarian needs and cost of humanitarian assistance. 

In addition,  the decision of major donors to  cut humanitarian funding create severe gaps in 
global aid  efforts, as it forces humanitarian organisations to  scale-back or delay emergency 
operations, thus leaving millions of people without critical support. 

Therefore, there is an urgent need to reform to humanitarian system  and make it more 
efficient and cost-effective, accountable, resilient and in line with humanitarian principles of 
humanity  neutrality,  impartiality  and  independence,  including  by  promoting  joint  work  on 
supply  chains,  locally  led  responses,  anticipatory  action,  disaster  risk  management,  cash 
assistance  as  well  as  predictable  and  flexible  funding  to  respond  quickly  and  efficiently  to 
emergencies. 

In response to mounting pressures on the global humanitarian system, the UN Under-Secretary-
General  and  Emergency  Relief  Coordinator  (USG/ERC)  launched  on  10  March  2025  the 
‘Humanitarian Reset’ – an initiative aimed at overhauling the global humanitarian system.  

The  Humanitarian  Reset  is  closely  linked  to  the  UN80  initiative,  a  comprehensive  reform 
process launched by the UN Secretary-General António Guterres, to review the UN working 

22 

 
 
 
 
 
 
methods, mandate, and eventual programme realignment, in conjunction with the UN’s 80th 
anniversary.  

Leveraging EU engagement with High-Income Countries 

The full potential of engagement with High-Income Countries has not been entirely exploited, 
notably  in  view  of  promoting  and  defending  EU  interests  either  bilaterally  or  via 
multilateral alliances as soon as opportunities arise. Despite upstream investment, the EU has 
not  timely  capitalised  on  its  collective  strength  in  multilateral  fora  to  lead  on  key  areas  of 
strategic interest (e.g. UN Tech Envoy in 2022), leaving the field to other actors.  

3.  NECESSITY AND ADDED VALUE OF EU’S ACTION - WHY SHOULD THE EU ACT? 

EU’s  external  action  financing  seeks  to  partner  with  third  countries,  as  well  as  promote 
multilateral solutions to global challenges. It enables the EU to defend its interests, to promote 
its values and standards, to support the objectives of its internal policies, ensure its security and 
protect its citizens. EU’s external funding should focus more on strengthening the Union’s 
competitiveness and reducing dependencies, notably through securing critical supply chains. 
Moreover, it is in the EU’s own interest to preserve its role of a trusted global player. 

The  mid-term  evaluation  of  EU's  External  Financing  Instruments  for  the  2021  -  2027 
Multiannual Financial Framework74 (hereinafter ‘mid-term evaluation’) confirmed the added 
value that the External Financing Instruments bring to EU’s external relations, as they provide 
a more integrated and sizable offer to partner countries, improving their capacity to address 
shared  priorities  with  the  EU  and  contributing  to  sustainable  development.  Additionally, 
mainstreaming climate, biodiversity and gender in EU external action contributes to achieving 
the SDGs.  

As a party to most multilateral processes, the EU can engage with multilateral and regional 
partners  in  key  policy  areas.  Compared  to  its  Member  States  acting  separately,  the  EU, 
together with Member States, can achieve greater impact by coordinating common positions 
and speaking with a stronger voice. As a world’s leading proponent and defender of multilateral 
and  rule-based  global  governance  system,  the  EU  has  credibility  as  an  honest  broker  and 
defender  of  core  international  human  right  instruments.  This  leverage  in  multilateral  and 
regional  fora  also  enables  the  Union  to  project  globally  its  policies  and  values,  as  well  as 
influence  the  shaping  of  global  norms  and  regulatory  standards.  The  EU’s  financial 
commitment is an integral part of the overall engagement in several multilateral agreements 
(e.g. climate and biodiversity). 

Through  the  increased  use  of  budgetary  guarantees  and  blending  operations,  the  EU 
incentivises and pools together public and private investments, including to the benefit of 
countries  and  sectors  having  difficult  access  to  financial  markets.  Through  blending  and 
guarantees, between 2021 and 2023, the EU mobilised public and private investments worth 

74  Evaluation  of  the  European  Union's  External  Financing  Instruments  for  the  2014  -  2020  and  2021  -  2027  Multiannual 
Financial Frameworks; Register of Commission Documents - COM(2024)208 (europa.eu) 

23 

 
 
 
 
 
 
 
 
EUR 50 billion to accelerate progress towards the SDGs. EU non-action would widen the SDGs 
financing  investment  gap  and  further  deteriorate  the  situation  of  fragile  countries  while 
weakening the EU as a geopolitical and geoeconomic actor and as global player in multilateral 
fora. 

Finally,  the  EU  triggers  collaboration  among  development  financial institutions.  Macro-
financial assistance loans provide much needed financing for countries experiencing balance 
of payments crises, with favourable conditions. 

The EU added value is explained in further detail in annex 6. 

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? 

4.1.  General  objective:  more  strategic  and  responsive  external  financing 

instruments 

The objectives of  EU  external  action are multifaceted  and lie at  the crossroads of Treaties-
based  objectives,  international  commitments  and  political  priorities  that  guide  the  EU 
engagement with partner countries75, candidate and potential candidate countries. 

Importantly, the mid-term evaluation on the EU’s external financing instruments confirms 
that  the  current  instruments  are  largely  fit  for  purpose.  The  evaluation  corroborates  that 
NDICI-Global Europe is on track to deliver against the objectives it was expected to fulfil at 
the  time  of  its  adoption.  Moreover,  the  objectives  of  NDICI-Global  Europe  continue  to  be 
relevant, and the instrument effectively serves the roll-out the Global Gateway strategy. In a 
similar  vein,  the  mid-term  evaluation  shows  that  IPA  III  has  demonstrated  its  general 
effectiveness as a pre-accession instrument and is likewise on track to meet its objectives. The 
instrument is aligned with the enlargement methodology and mirrors EU policy developments, 
such as the focus on green, digital and economic priorities. 

Nonetheless, the changing geopolitical landscape and poly-crises in recent years have exposed 
some  architectural  weaknesses  in  the  design  of  the  external  financing  instruments.  As 
explained  in  chapter  2  on  problem  definition,  sub-optimal  policy  coherence/toolbox  and 
flexibility of the EU’s external financing instruments hamper the Union’s capacity to advance 
strategic interests and address fragility and crisis situations. 

The problem definition guides the general objective of the impact assessment: the EU should 
design external financing instruments that effectively advance the EU’s strategic interests 
while  being  responsive  to  fragility  and  crisis  situations.  As  mentioned  in  Chapter  1,  the 
Communication on ‘the road to the next multiannual financial framework’76 strives for external 
action financing that is better aligned with the EU’s strategic interests. Furthermore, the mid-
term evaluation confirms that, while current external financing instruments have improved in 

75 Political priorities are set in the political guidelines for the Commission 2024-2029 as well as the Strategic Agenda 2024-
2029 adopted by the European Council in June 2024. 
76 https://commission.europa.eu/document/download/6d47acb4-9206-4d0f-8f9b-
3b10cad7b1ed_en?filename=Communication%20on%20the%20road%20to%20the%20next%20MFF_en.pdf 

24 

 
 
 
 
 
 
 
terms of coherence and flexibility of EU external action, the context of multiple and protracted 
crises has overstretched this flexibility. 

To pursue its economic foreign policy agenda and to address fragility and crisis situations in 
an increasingly uncertain geopolitical environment, the EU should better balance flexibility 
and predictability in the design of its external financing instruments. The next chapter outlines 
the specific objectives of the impact assessment, which contribute to the general objective. The 
latter indicates the long-term goal while the specific objectives indicate the ways to achieve 
this goal.  

The specific objectives reflect the fact that the next external financing instrument should be 
enabling in nature. It needs to be able to serve various external action objectives and the EU’s 
strategic interests in more than 100 countries well into the next decade, in a world where the 
pace of change is unprecedented compared to the previous MFFs. The specific objectives have 
therefore  been  drafted  with  this  reality  in  mind  while  responding  to  the  problem  drivers 
(chapter 2).  

Moreover, considering the ringfenced problem definition and general objective, it also needs 
to  be  stressed  that  this  impact  assessment  does  not  suggest  a  complete  overhaul  of  policy 
objectives  of  the  next  external  financing  instruments.  The  focus  is  on  ensuring  the  right 
architecture at the levels of implementation, instrument and toolbox. 

The specific objectives guide the criteria to assess the effectiveness, efficiency and coherence 
of the policy options in chapters 6 to 7. 

4.2. 

Specific objectives 

Three broad specific objectives (SO), each with their sub-set of objectives, illustrate the general 
objective of the impact assessment described in 4.1. The below intervention logic explains in 
a  nutshell  the  relationship  between  the  problem  drivers,  general  objective  and  specific 
objectives, which is then followed by more detailed descriptions. 

25 

 
 
 
 
 
 
Intervention logic 

26 

 
 
 
 
 
 
4.2.1.  Provide  adaptability  and  stability  by  striking 

the  right  balance  between 

programmable and non-programmable actions 

The first specific objective is to provide adaptability and stability by striking the right balance 
between programmable and non-programmable actions in external financing instruments 
(SO 1). 

Programming is a process that sets the framework for a partnership with a country or region, 
through the identification of priority areas for cooperation and, where relevant, the allocation 
of  financial  resources.  By  nature,  external  action  encompasses  both  structural  and  crisis 
policies  and  tools.  Structural  policies,  such  as  international  partnerships,  pre-accession  and 
neighbourhood,  are  implemented  through  programmable  actions.  Crisis-responsive  policies 
and  tools  (humanitarian  aid,  macro-financial  assistance,  as  well  as  rapid  response  notably 
linked  to  peace,  security  and  resilience)  translate  in  non-programmable  actions.  A  good 
interplay between programmable and non-programmable actions is needed to provide capacity 
to adjust to new priorities, emerging needs and crisis situations (SO 1.1), while at the same 
time  ensuring  predictability  to  establish  mutually  beneficial  medium-  to  long-term 
partnerships with partner countries for strategic interests supporting the EU’s growth and 
competitiveness (SO 1.2). 

In  fragile  and  politically  complex  countries,  the  EU  should  have  adequate  flexibility  and 
capacity  to  adapt  and  respond  rapidly  and  effectively  to  situations  of  crisis,  instability  and 
conflict and support affected populations. An indicative amount of funding allocated to non-
programmable actions per region should cater for this need. Typically, such actions are carried 
out under humanitarian aid, rapid response actions and macro financial assistance. Longer term 
mutually beneficial partnerships and cooperation between EU and a partner country require 
predictability and therefore programmable actions as a basis. 

These  partnerships  require  multiannual  planning  with  shared  priorities  and,  where  relevant, 
indicative financial allocations, fostered in a dialogue with a partner country/region, to deliver 
on  the  EU’s  strategic  interests.  In  particular,  the  development  of  investments  under  Global 
Gateway  as  well  as  engagement  on  socio-economic,  migration  and  governance/security 
interests,  are  only  possible  with  a  medium-term  funding,  providing  a  sufficient  level  of 
predictability for both the EU and the partner country. Regional programming offers a high 
degree of flexibility, allowing to build mutually beneficial packages when opportunities arise 
in partner countries. 

Lastly, both programmable and non-programmable actions could be reinforced, when needed, 
by  a  reserve  available  to  all  components  of  the instrument  to  react  and  adjust  to  emerging 
challenges and priorities. 

4.2.2.  Increase responsiveness by simplifying the architecture of the instruments 

The  second  specific  objective  is  to  increase  responsiveness  via  an  integrated  approach  by 
further  simplifying  the  architecture  of  current  instruments  (SO  2).  As  noted  above,  the 
Communication on the road to the next MFF stressed the need for a more focused and simpler 
EU budget. Therefore, this impact assessment suggests merging the current external financing 
instruments,  NDICI-Global  Europe,  IPA  III,  various  Facilities  (Ukraine,  Western  Balkans, 
Moldova) and humanitarian aid funding into one instrument. 

27 

 
 
 
 
 
 
This approach would integrate under one instrument indicative allocations for regions – i) 
Enlargement and Neighbourhood East; ii) Middle East, North Africa and the Gulf; iii) Sub-
Saharan Africa; iv) Asia and the Pacific and v) Americas and the Caribbean – and for a global 
envelope (SO 2.1). This would remove the financial and operational  barriers  that may exist 
between the current standalone instruments, as described in chapter 2. 

A simplified broader instrument enhancing geographisation would strengthen the support at 
regional and country level to the extent possible, mobilising all the available policy tools. In 
turn,  a  global  envelope  would  serve  to  support  truly  global  initiatives,  addressing  global 
challenges and threats. 

A merged instrument could strengthen the humanitarian-development-peace policy nexus77 
and increase the resilience of partner countries (SO 2.2). The recurrent, protracted and complex 
nature  of  many  crises  calls  for  both  swift  reactions  and  capacity  to  develop  longer-term 
interventions  that  address  humanitarian  needs  as  well  as  development  and  peacebuilding 
challenges in a coherent way. Better synergy would ensure that humanitarian funding can focus 
on acute needs and partnerships funding can focus on long-term resilience, promoting peaceful 
and robust communities. The nexus approach is closely associated with the need for increased 
flexibility: when partner countries go through unexpected turmoil or natural disasters, more 
structural development cooperation should be able to be substituted with crisis tools, such as 
humanitarian  aid,  among  others.  On  the  other  hand,  there  are  situations  where  longer  term 
investments such as Global Gateway interventions can help stabilise fragile contexts. 

An  integrated  instrument  could  optimise  the  interplay  between  enlargement  and 
neighbourhood policies and allow to better respond to policy changes in partner countries (SO 
2.3). EU assistance could be recalibrated in cases where countries are backsliding on the EU 
accession process, through enabling their transition between pre-accession assistance and other 
types of financing. Integrating support to accession candidates and potential candidates into a 
simplified external action instrument would also avoid the creation of ad hoc instruments in 
response to emerging needs and priorities in the neighbourhood. 

The budgetary architecture should ensure Ukraine’s needs are covered while minimising 
the impact on the overall effectiveness of external financing. Ukraine will need the support 
of the EU and its allies to continue withstanding Russia’s war of aggression and weather its 
economic  fallout.  Ukraine’s  economy  has  continued  to  show  resilience,  but  risks  remain 
exceptionally high given the uncertainty of the intensity and duration of the war, including with 
respect to the continued damage to energy infrastructure. The architecture of external financing 
should combine strong and predictable support to Ukraine’s accession path and reconstruction 
efforts with the advancement of the EU’s broader external policy objectives (SO 2.4). 

77 Following the outcomes of the 2016 World Humanitarian Summit, the Humanitarian-Development-Peace nexus is intended 
to ensure strong cooperation, collaboration and coordination between humanitarian, development and peacebuilding efforts at 
the national level to ensure collective outcomes on the basis of joined-up, coherent, complementary and risk-informed analysis, 
planning and action https://www.undp.org/crisis/humanitarian-development-and-peace-nexus 

28 

 
 
 
 
 
 
 
4.2.3.  Advance policy coherence and EU’s strategic interests by creating and updating 

tools 

NDICI-Global  Europe  already  enables  the  EU  to  advance  its  strategic  interests  and  values. 
However, there is a need to further advance EU’s strategic interests and policy coherence 
through tools that are fit for purpose (SO 3). 

To this end, an enhanced coherence between external and internal policies is crucial (SO 
3.1),  starting  with  better  aligned  priorities.  For  this,  better  legal  consistency,  coherence, 
synergies and complementarity should be ensured in both the external and internal financing 
instruments,  notably  through  equivalent  provisions.  Articulation  with  the  European 
Competitiveness Fund will be crucial to take various work streams (e.g. critical raw materials 
and related value chains78, economic security and the Clean Industrial Deal) to the next level. 
The next external financing instrument should support the Union’s open strategic autonomy by 
facilitating  the  diversification  of  value  and  supply  chains,  ultimately  improving  local  value 
addition  in  partner  countries  and  strengthening  the  market  position  of  EU  companies  both 
within  the  Single  Market  and  globally,  in  coherence  with  the  Competitiveness  Fund  and 
synergies that both programmes create.   

To  effectively  strengthen  the  interconnections  between  internal  and  external  policies,  the 
external  financing  instrument  should  allow  to  build  customised,  mutually  beneficial 
packages with partner  countries in all regions (SO  3.2). The interplay between different 
policy objectives (e.g. trade, climate, energy, migration) is essential to build these packages, 
such as Comprehensive Partnerships and Clean Trade and Investment Partnerships. This work 
stream  should  be  strengthened  by  fostering  private  sector’s  access  to  public  and private 
funding  (SO  3.3)  through  enhanced  toolbox79.  Existing  tools  include  grants  and  more 
recently also guarantees and blending. As elaborated in the chapter on the problem definition 
and  problem  drivers,  the  private  sector  needs  to  play  an  enhanced  role  to  contribute  to  EU 
external action objectives. In its recent conclusions the Council also stressed that sustainable 
development goes hand in hand with an enabling business environment that incentivises private 
investment.80 While grants, guarantees and blending should be continued,  the Union should 
further integrate the private sector in the external financing instrument by allowing new tools 
such as guarantees to export credit agencies as well as the option to provide direct support to 
companies. Finally, safeguarding the Union’s strategic interests in the external action would 
benefit  from  entrusting  the  indirect  management  of  the  EU  funds,  whenever  possible,  to 
European organisations. 

Strengthening performance-based financing would help further align EU policy objectives 
and spending (SO 3.4). Following fifteen years of experience in budget support worldwide 
and the introduction of the new facilities in the enlargement region, support has already moved 
towards  delivery-based  models  making  disbursement  conditional  on  achieved  results.  For 
candidate  countries  and  potential  candidates,  maintaining  this  approach  would  allow  to 

78 Communication on ‘a secure and sustainable supply of critical raw materials in support of the twin transition’ https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=celex:52023DC0165 
79  Companies  who  responded  to  the  OPC  call  for  new,  innovative  mechanisms  to  be  included  in  the  toolbox, 
including more integrated European offer with better risk-sharing capabilities. 
80  https://data.consilium.europa.eu/doc/document/ST-9394-2025-INIT/en/pdf 

29 

 
 
 
 
 
 
 
 
continue  incentivising  key  socio-economic  reforms  and  accelerating  economic  convergence 
with the EU in view of accession. Policy-based loans should be introduced where relevant, and 
especially in the candidate countries, which strive for EU accession through reforms. 

5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? 

5.1.  What is the baseline from which options are assessed? 

The baseline scenario to assess the policy options for the next financing period is the  status 
quo, i.e. the 2021-2027 external financing instruments as described in the previous sections. 

5.1.1.  NDICI-Global Europe  

The  mid-term  evaluation  of  external  financing  instruments  concluded  that  NDICI-Global 
Europe has overall shown to be fit for purpose. It confirmed that its objectives, its geographic 
and  investment-oriented  approach  as  well  as  its  flexibility  features  (including  financial 
flexibility  and  the  emerging  challenges  and  priorities  cushion)  were  relevant  to  effectively 
implement  EU  external  action  priorities,  including  the  Global  Gateway  strategy  and  the 
Economic and Investment Plans for the Eastern Partnership and Southern neighbourhood. 

NDICI-Global Europe superseded several distinct external financing instruments of the 2014-
2020  MFF,  thus  achieving  a  major  simplification  of  external  funding  and  bringing  about 
effectiveness and efficiency gains. Nevertheless, the mid-term evaluation noted that NDICI-
Global  Europe  could  still  better  contribute  to  an  integrated  approach  balancing  EU 
interests, partnerships and values, further reconciling the EU’s internal/thematic policies and 
external action objectives. In particular, the evidence gathered for the independent study that 
backed the mid-term evaluation and the related findings pointed to certain gaps in the response 
capacity, hence the need for further adaptations.81 

As  regards  the  investment  component  in  NDICI-Global  Europe  aimed  at  leveraging  both 
public  and  private  investments,  the  European  Fund  for  Sustainable  Development  Plus 
(EFSD+), the mid-term evaluation noted that it has gradually demonstrated its catalytic effect 
to leverage additional finance for Global Gateway. Going forward, a stringent prioritisation 
was considered essential to focus on areas with the greatest transformative impact, catering for 
EU strategic interests and shared priorities with partners. 

The mid-term evaluation also stated that rigidities in the instrument, including the number of 
targets,  constrain  its  flexibility.  The  evaluation  emphasised  in  particular  that  while  the 
emerging  challenges  and  priorities  cushion  –  a  reserve  composed  of  unallocated  funds 
available to increase the budgets of any of the three NDICI-Global Europe pillars, namely the 
geographic programmes, thematic programmes and rapid response actions – had proven to be 
a valuable tool providing a prompt response to crises, unforeseen events and Union priorities, 
its use showed a mismatch between the available funds and the actual needs, concluding that a 
more strategic prioritisation was needed.  

81  Evaluation  of  the  European  Union's  external  financing  instruments  (2014-2020  and  2021-2027);  Independent  study  in 
support of the evaluation Volume I, Synthesis report, Publications Office of the European Union, p. 50 

30 

 
 
 
 
 
 
 
For the sake of clarity, some key principles and elements of the instrument are explained below. 
This will support the description of the policy options, assessing their impact as well as their 
comparison against the baseline in the next chapters. 

•  Programming of the instrument: The financial resources under the geographic and 
thematic  pillars  of  NDICI-Global  Europe  have  been  programmed  through  a 
comprehensive  process  resulting  in  a  set  of  country,  multi-country,  regional  and 
thematic  multiannual  programming  documents.  These  documents  define  the  priority 
areas, specific objectives, expected results, indicators and indicative allocations for the 
period  2021-2027  with  partner  countries  and  regions,  ensuring  a  high  degree  of 
predictability for the partnerships. A mid-term review of the programming was foreseen 
to  make  sure  programming  would  adapt  to  changes  on  the  ground,  and  financial 
allocations backing country programmes were set for 2021-2024 only, while the second 
tranche (2025-2027) was programmed as part of the mid-term review of programming. 
This approach aimed at balancing predictability and flexibility objectives. 

•  Spending targets: Under NDICI-Global Europe, a specific emphasis is put on certain 
priorities  through  spending  targets  that  provide  a  certain  level  of  predictability  for 
policy outcomes. 

-  At  least  93%  of  funding  shall  fulfil  the  criteria  for  Official  Development 

Assistance. 

-  At least 30% of funding should contribute to step-up efforts on climate objectives. 
In  addition,  in  her  State  of  the  Union  address  in  September  2021,  Commission 
President von der Leyen announced an additional EUR 4 billion for climate finance 
until 2027. 

- 

Indicatively  10%  of  funding  should  support  management  and  governance  of 
migration and forced displacement, as well as address the root causes of irregular 
migration  and  forced  displacement  when  they  directly  target  related  specific 
challenges. 

-  At least 20% of the Official Development Assistance spending should be dedicated 

to social inclusion and human development. 

-  At least 85% of new actions should have gender equality as principal or significant 
objective. At least 5% of these actions should have gender equality and women’s 
and girls’ rights and empowerment as a principal objective. 

-  NDICI-Global  Europe  should  contribute  to  the  ambition  of  providing  7.5%  of 
annual spending under the MFF to biodiversity objectives in the year 2024 and 
10% of annual spending under the MFF to biodiversity objectives in 2026 and 2027, 
while considering the existing overlaps between climate and biodiversity goals. 

•  Flexibility  components:  besides  certain  financial  and  operational  flexibilities  (e.g. 
carry-over  of  funds  to  the  following  year,  reuse  of  decommitted  funds,  room  of 
manoeuvre in programming and implementation), NDICI-Global Europe’s features an 
emerging challenges and priorities cushion, as explained above. In addition, the rapid 
response  actions  respond  swiftly,  in  particular  to  crisis  and  resilience  challenges, 
complementing the geographic programmes. 

31 

 
 
 
 
 
 
5.1.2.  IPA III 

IPA III has demonstrated its effectiveness as a pre-accession instrument and is delivering on 
its main objectives.  The  mid-term  evaluation  of  external  financing  instruments  showed that 
IPA  III  is  well-aligned  with  the  enlargement  policy  priorities,  with  a  programming 
framework allowing for a focused and strategic allocation of resources. The absence of pre-
allocated financial envelopes for each beneficiary country provides flexibility in programming, 
enabling the EU to respond to changing priorities and needs. 

IPA III has further created a performance-based approach, which makes beneficiaries more 
responsible for progress and allows for modulation of assistance. This approach is intended to 
create a virtuous cycle of reform, where beneficiaries are incentivised to make progress in key 
areas in order to receive increased assistance. However, the mid-term evaluation highlights that 
the  instrument's  flexibility  has  been  limited  by  the  fact  that  annual  planning  has,  through 
implementation, prevailed over strategic multi-annual programming. 

The mid-term evaluation states that IPA III is coherent with the NDICI-Global Europe policy-
oriented  approach  and  key  EU  internal  policies  as  well  as  EU  policies  for  the  region, 
demonstrating a strong foundation for supporting the beneficiary countries in their accession 
process. 

The  implementation  of  IPA  III  was  affected  by  the  EU's  response  to  Russia’s  war  of 
aggression against Ukraine. The bilateral programming for 2023 was postponed to 2024 in 
all six beneficiaries, with unconditional disbursements, which limited the strategic focus and 
performance-based programming of IPA III for that year. 

5.1.3.  Humanitarian aid 

Humanitarian assistance provided in accordance with the Regulation on humanitarian aid was 
not  part  of  the  above  evaluation  on  external  financing  instruments,  given  its  separate  legal 
basis.  A  comprehensive  evaluation  assessing  the  European  Commission’s  humanitarian  aid 
during  the  2017-2022  period  concluded  that  the  EU’s  humanitarian  aid  objectives  remain 
relevant in the face of a rapidly changing humanitarian landscape and increasing humanitarian 
needs.  EU’s  humanitarian  interventions  were  effective  overall  and  addressed  the  most 
pressing  needs,  although  effectiveness  varied  across  countries,  regions  and  sectors.  The 
European  Union’s  funding  was  considered  essential  by  its  humanitarian  partners  across 
different regions, including more geographically remote ones with limited EU presence. 

5.1.4.  Ukraine Facility 

Given the damage to the Ukrainian economy, society and infrastructure caused by Russia’s war 
of aggression, Ukraine requires significant support and institutional capacity. Under the 2021-
2027 budgetary structure, it was necessary to  set up a dedicated, exceptional,  medium-term 
single instrument  bringing together the bilateral  support provided by the  Union to  Ukraine, 
ensuring coordination and efficiency.  

The  Ukraine  Facility  provides  a  balance  between  flexibility  and  programmability  of  the 
Union’s  response  to  address  Ukraine’s  financing  gap  and  recovery,  reconstruction  and 
modernisation needs, while at the same time supporting the country’s reforms effort as part of 

32 

 
 
 
 
 
 
its accession path to the Union. It is a pivotal instrument in the European Union's strategy to 
address  the  multifaceted  challenges  confronting  Ukraine  in  the  wake  of  Russia's  war  of 
aggression. This dedicated support mechanism, offers up to EUR 50 billion in predictable 
financial  support.  It  aims  at  bolstering  Ukraine's  resilience,  fostering  its  recovery  and 
facilitating its path towards sustainable development and EU membership. 

Pillar  1,  totalling  EUR  38.27  billion,  comprises  both  grants  (EUR  5.27  billion)  and  loans 
(EUR 33 billion) aimed at addressing the financial needs of the Ukrainian State to maintain 
macro-financial stability while supporting reforms and investments aimed at the recovery, 
reconstruction  and  modernisation  of  Ukraine.  Funds  under  this  Pillar  are  subject  to  the 
successful  implementation  of  the  Ukraine  Plan,  with  quarterly  disbursements  based  on  the 
achievement  of  specific  results.  Financing  not  linked  to  cost  is  fully  embedded  in  the 
Regulation. 

Pillar  2  consists  of  a  'Ukraine  investment  framework',  equipped  with  EUR  9.3  billion 
(EUR 7.8 billion in loan guarantees underpinned by EUR 5.46 billion grants for provisioning 
and EUR 1.5 billion for blended finance grants), designed to attract and mobilise public and 
private investments for Ukraine's recovery and reconstruction. 

Pillar 3, amounting to EUR 4.76 billion, provides technical assistance and support measures 
to facilitate Ukraine's alignment with EU laws and regulations. 

5.1.5.  Reform and Growth Facility for the Western Balkans 

The Facility is the financial pillar of the Growth Plan for the Western Balkans. It covers 
the  period  from  2024  to  2027.  The  main  aim  of  the  Facility  is  to  support  Western  Balkan 
partners’ alignment with the EU’s values, laws, rules, standards, policies and practices, with a 
view to future EU membership. Combining financial and policy tools under a comprehensive 
approach, it also aims at supporting Western Balkan partners in their progressive integration 
into the EU Single Market and socio-economic convergence with the EU. 

The Facility complements IPA III, focused on enlargement related support. It is expected to 
demonstrate the benefits of  closer EU integration even before accession. Support  under the 
Facility is provided through: 

• 

• 

the  Western  Balkans  Investment  Framework,  in  the  form  of  grants  and  loans,  for 
investments underpinning the Reform Agendas, such as investments in infrastructure 
projects (EUR 3 billion); 

loans disbursed directly to Western Balkan partners’ budgets to accelerate growth based 
on key socio-economic reforms (EUR 2.6 billion)82. 

Similarly to the Ukraine Facility, the Reform  and Growth  Facility for the Western Balkans 
embeds financing not linked to cost. Each partner in the region prepared a Reform Agenda, 
setting  out  planned  reforms  to  achieve  the  Facility’s  objectives,  and  in  order  to  receive  the 
funds allocated to each of them, based on their level of ambition. 

82 The remainder is mainly required to provision the bilateral loans under the Facility. 

33 

 
 
 
 
 
 
 
5.1.6.  Reform and Growth Facility for the Republic of Moldova 

Following the model of the Growth Plan for the Western Balkans, the EU established a Growth 
Plan for the Republic of Moldova, which includes increased financial assistance, enhanced 
access to the Union single market and support for socio-economic and fundamental reforms. 
At the heart of the Growth Plan lies the Reform and Growth Facility, which will provide 
increased  financial  assistance  to  support  progress  on  socio-economic  and  fundamental 
reforms. It will disburse up to €1.9 billion in financial support, composed of up to EUR 1 500 
million in concessional loans and EUR  385 million of non-repayable financial support. The 
Facility,  including  the  provisioning  for  loans,  is  financed  primarily  from  the  bilateral 
allocations foreseen for Moldova in the NDICI-GE budget covering the period 2025-2027. 

In line with the performance-based approach followed in other Facilities, the disbursement of 
EU funding to Moldova is made conditional upon progress achieved in the implementation of 
reforms defined in the country’s Reform Agenda. The Reform Agenda sets out the key socio-
economic  and  fundamental  reforms  that  Moldova  intends  to  undertake  in  2025-2027  to 
accelerate its convergence with the EU. It covers all sectors that are vital to promote Moldova's 
economic growth and integrate it into the EU single market. Funds will be released twice a 
year,  based  on  requests  by  the  Government  of  Moldova  and  following  verification  by  the 
Commission that all relevant conditions have been met. 

The non-repayable support covers support provided by the Union for projects approved under 
the Neighbourhood  Investment  Platform  (NIP),  one of the  regional investment  platforms in 
place  under  NDICI-GE,  as  well  as  complementary  support.  This  complementary  support 
includes support to civil society organisations and technical assistance, which will facilitate the 
implementation of reforms and Moldova’s path to EU accession. In addition, the Facility is 
expected  to  mobilise  up  to  EUR  2  500  million  of  new  investments  from  the  international 
financial institutions and the private sector.  

5.2.  Description of the policy options 

The sub-optimal policy coherence and flexibility in  the EU’s external  action financing  to 
advance its strategic interests and to address fragility and crisis situations define the problem 
of this impact assessment. In this respect, the balance between flexibility and predictability 
is  the  fundamental  policy  parameter  that  governs  the  design  of  possible  policy  options. 
Evidence gathered in the independent study supporting the mid-term evaluation showed that 
while the current instruments equipped the EU to better play its role both as a development and 
geopolitical  actor,  the  context  at  global,  regional and  national  level  had  become  even  more 
challenging, reducing the scope for effective EU leverage. The report concluded that there was 
a need for more differentiated response strategies (underpinned notably by greater levels of 
flexibility) as well as enhanced capacities to exploit windows of opportunities as they arise83. 

In  today’s  world  of  shifting  international  context  and  megatrends  that  will  shape  the  next 
decades, the balance between flexibility and predictability is not theoretical, but a crucial policy 

83  Evaluation  of  the  European  Union's  external  financing  instruments  (2014-2020  and  2021-2027);  Independent  study  in 
support of the evaluation Volume I, Synthesis report, Publications Office of the European Union, p. 59 

34 

 
 
 
 
 
 
 
 
and  political  choice.  This  observation,  guides  the  choice  of  options  analysed  in  this  impact 
assessment.  They  are  limited  to  three,  so  as  to  inform  the  key  decisions  on  the  future 
instruments. Breaking them down into more detailed sub-options bears the risk of distracting 
the analysis from the fundamental policy choice.  

Far reaching financial predictability means that the amounts dedicated to individual countries 
are  known  for  the  duration  of  the  entire  MFF.  When  translated  into  operational  terms,  via 
detailed design of regional and country envelopes, this multiannuality gives a high degree of 
certainty of the EU involvement and aid. Such predictability gives a stable horizon for both the 
EU and the beneficiaries but leaves little room for manoeuvre. Flexibility, on the other hand, 
can  include  various  layers.  Financial  flexibility  can  be  ensured  through  the  use  of 
decommitments,  carry-overs,  transfers,  and  reserves  while  operational  flexibility  relates  to 
room  of  manoeuvre  in  programming  and  implementation.    Preserving  the  flexibilities  of 
NDICI-Global Europe including its general reserve (the cushion), financial flexibilities would 
need  to  be  a  guiding  principle  for  the  next  instrument,  regardless  of  the  option  chosen. 
However,  operational  flexibility  can  be  further  calibrated,  which  is  being  explained  in  the 
descriptions on options later in this chapter. 

The distinction between flexibility and predictability – in other words,  agility to respond to 
unforeseen  crises  and  seize  opportunities,  in  contrast  to  funding  which  can  be  anticipated, 
calculable and foreseeable by partners – is not always clearcut. Also unprogrammable funding 
requires a degree of planning. For example, humanitarian aid and macro-financial assistance 
need predictability regarding the amounts of funding available for crisis tools from the onset 
of the MFF. Moreover, programmable funding can be built in a flexible manner, for instance 
via large regional envelopes and keeping part of the funding unallocated.  

Given  the  political  importance  and  the  amounts  at  stake,  the  budgetary  architecture  for 
Ukraine  is  another  core  challenge  to  be  analysed.  The  issue  of  how  the  EU  navigates  the 
Ukraine  challenges,  including  the  extraordinary  budgetary  proportions,  has  wide  ranging 
impacts on the external funding under the future MFF. Different options can be assessed with 
regards  to  how  well  they  allow  to  strike  a  balance  between  providing  credible  support  to 
Ukraine and ensuring the external financing’s overall efficiency in pursuing strategic objectives 
in other geographic areas. 

To  guide  this  impact  assessment,  the  specific  objectives  listed  in  Chapter  4  constitute  the 
criteria grid against which the three following policy options are assessed: 

•  Option 1: A fully flexible external financing instrument based exclusively on strategic 
priorities defined annually, with no multiannual planning.  Ukraine-related support for 
pre-accession and reconstruction needs would be covered above MFF ceilings. 

•  Option 2: An external financing instrument based on indicative geographic and global 
envelopes  covering  programmable  and  non-programmable  funding  for  multiannual 
planning,  balancing  flexibility  and  predictability.  Ukraine  related  support  for  pre-
accession and reconstruction needs would be covered above the MFF ceilings. 

•  Option 3: An external financing instrument based on indicative geographic and global 
envelopes  covering  programmable  and  non-programmable  funding  for  multiannual 
planning,  balancing  flexibility  and  predictability.  Pre-accession  needs  for  Ukraine 

35 

 
 
 
 
 
 
would be covered by this instrument inside MFF ceilings while the reconstruction needs 
of Ukraine would be covered above the MFF ceilings. 

Finally,  the  design  of  all  three  policy  options  encompasses  cooperation  with  enlargement 
partners, with the neighbourhood East and South, as well as with Sub-Saharan Africa, Asia and 
the  Pacific,  and  the  Americas  and  the  Caribbean,  as  well  as  macro-financial  assistance  and 
humanitarian funding, with the assumption that they would be covered under the same external 
financing instrument. The 1996 Regulation on humanitarian aid would continue to provide the 
legal basis, principles and rules for delivery of such aid, while it would draw on the funding 
allocations of the post-2027 instrument. 

5.2.1  Option 1: a fully flexible external financing instrument  – Ukraine-related support 

for pre-accession and reconstruction needs above MFF ceilings 

Option  1  discusses  how  a  more  transactional  model  of  engagement  with  partner  countries 
would look like in the EU context while testing it against the specific objectives.  Option 1 
would ensure full flexibility to swiftly react and allocate funding on an ad hoc basis according 
to changing strategic interests and needs at any given time. The funding priorities in option 1 
would  be  exclusively  based  on  strategic  priorities  defined  annually,  with  no  multiannual 
planning  and  no  spending  targets.  The  MFF  would  frame  the  funding  available  for  a 
multiannual period.  

EU strategic interests and political priorities in the short-term would guide the allocation of the 
amounts  available  in  the  instrument  on  an  annual  basis,  implying  a  negotiation  with  the 
budgetary  authorities  on  these  priorities.  The  financial  flexibility  (see  above  under  5.2)  as 
provided  in  the  current  external  instruments  is  assumed  to  be  continued  under  option  1.  In 
addition,  this  option  would  provide  a  full  operational  flexibility.  Having  no  multiannual 
planning would translate into having no programmable earmarked financial allocations for EU 
interventions per partner country or region. Country packages would be identified only for a 
limited number of countries and for short-term, ad hoc priorities.  

Option 1 would not include spending targets as EU interests and political priorities would be 
the exclusive drivers to define interventions and allocate funding. 

5.2.2  Option  2:  an  instrument  based  on  regional  and  global  envelopes  with  indicative 
financial  allocations  covering  both  programmable  and  non-programmable 
components  – Ukraine-related support for pre-accession and reconstruction needs 
above MFF ceilings 

Under  option  2,  the  instrument  would  be  more  balanced  between  flexibility  and 
predictability in clear contrast with the fully flexible instrument in option 1. The instrument 
would  be  based  on  regional  pillars  and  one  global  pillar,  each  of  them  covering  both 
programmable and non-programmable interventions. It would thus be structured primarily 
by regions, with dedicated funding indicatively allocated to each region and to the global pillar. 
This option would allow the combination of programmable and non-programmable funding, 

36 

 
 
 
 
 
 
 
 
both adjustable to changing circumstances. Under this option the financial flexibility (see above 
under  5.2)  as  provided  in  the  current  external  instruments  would  also  be  assumed  to  be 
continued  while  operational  flexibility  under  the  programmable  components  is  increased 
compared  to  the  baseline  with  a  new  focus  on  reinforced  regional  programmes.  In  this 
approach, the programming would be done in a way that ensures built-in flexibility through 
regional programmes, and by a phased approach. This would cater for agile adaptation to needs.  

To ensure predictability, part of the geographic and global envelopes would be programmed 
at the start of the MFF. For the programmable parts, multiannual indicative programmes would 
be  adopted,  where  relevant,  for  regions,  countries  and  global  actions,  by  the  Commission 
following comitology procedure. 

Option 2 would include an adjusted Official Development Assistance target (compared to the 
baseline). 

Ukraine’s  accession  path  via  programmable  allocations  and  unforeseeable  reconstruction 
needs would be covered above MFF ceilings. Given the size of the disruption posed by the 
situation  in  Ukraine,  such  a  mode  of  financing  would  also  ensure  that  there  is  no  outsized 
impact  on  the  overall  financial  allocations  under  the  next  instrument,  thus  protecting  the 
integrity  and  stability  of  the  EU's  overall  financial  planning.  Sourcing  the  entirety  of 
Ukraine’s funding above MFF ceilings would allow the EU to better respond to unpredictable 
challenges  and  needs  and  their  significant  budgetary  implications,  as  they  appear  in  a  still 
highly  uncertain  context,  without  hampering  the  financing  instrument  in  providing  swift 
support in case of unforeseen needs in other geographic areas. 

5.2.3  Option  3:  an  instrument  based  on  regional  and  global  envelopes  with  indicative 
financial  allocations  covering  both  programmable  and  non-programmable 
components – Ukraine pre-accession needs covered by this instrument inside MFF 
ceilings and Ukraine reconstruction needs above MFF ceilings 

This option would be identical to option 2, except that Ukraine’s programmable allocations 
aimed at supporting its accession to the EU’s path would be inside the MFF ceilings. This 
option would ensure an equal treatment in terms of budgetary approach of all candidate and 
potential candidate countries. 

6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? 

The aim of this chapter is to qualitatively assess the economic, social and environmental 
impact of the three options presented in chapter 5. 

The starting point of this chapter is the general objective of the impact assessment, i.e. to 
design external financing instruments that effectively advance the EU’s strategic interests while 
being responsive to fragility and crisis situations. The specific objectives presented in chapter 
4 are used as a yardstick when assessing the economic, social and environmental impact. 

37 

 
 
 
 
 
 
 
 
Limitations 

Considering the more than 130 partner countries (including the candidate countries) and the 
full spectrum of SDGs that the EU external financing instruments may support, the economic, 
social and environmental impact is considered at a high level of aggregation. The impact on 
the EU is considered when relevant. 

As explained, the policy framework for EU external action with its specific areas and various 
forms of action – ranging from investments in partner countries’ infrastructure to support the 
green  and  digital  transition  to  assistance  to  health  and  education  systems,  to  name  a  few  – 
provides  the  context,  guiding  the  economic,  social  and  environmental  objectives  to  which 
external  instruments  are  expected  to  contribute.  This  policy  framework,  the  broader  EU 
political  priorities  as  well  as  commitments  subscribed  by  the  EU  or  defined  in  agreements 
between  the  EU  and  third  countries  at  bilateral,  regional  and  multilateral  level  guide  the 
objective-setting of the external financing instruments and their implementation. 

Therefore,  the  three  options  chosen  are  not  analysed  through  the  prism  of  specific  policies 
driving the EU external action nor is it attempted to measure the impact of EU contributions in 
specific areas. This would not be feasible nor meaningful in an MFF-related impact assessment, 
given that the external financing instrument is an enabling vehicle for the EU to support various 
policies. This is why it is important to stress the limits of what this impact assessment may 
deliver, when it comes to projections regarding performance at intervention level or at a more 
‘macro’ level. 

Option 1: a fully flexible external financing instrument  –  Ukraine-related support for 
pre-accession and reconstruction needs above MFF ceilings 

Economic impact 

Option  1  allows  for  swift  reaction  and  allocation  of  funding  based  on  constantly  evolving 
strategic interests, which can lead to a use of resources that better responds to fast changing 
needs and opportunities (meets Specific Objective 1.1).  

It has the potential to foster innovation and adaptability in response to changing economic and 
geopolitical conditions, including emerging priorities under economic foreign policy. It would 
also allow to swiftly mitigate unintended economic consequences of the EU’s environmental 
legislation in partner countries (meets Specific Objective 3.1). 

However, the lack of predictability in funding allocation may lead to uncertainty for partner 
countries and implementing partners (e.g. development finance institutions), which can hinder 
economic  development  but  also  fails  to  deliver  stability  and  support  the  implementation  of 
long-term reforms (fails to meet Specific Objective 1.2). In the same vein, option 1 may come 
with a reduced ability to attract private sector investment, as the lack of predictability makes it 
more challenging for investors to engage in the long run (fails to meet Specific Objective 2.1 
and 3.3.). This would affect the EU’s capacity to project its longer-term strategic interests. In 
these respects, option 1 would have a limited capacity to support long-term partnerships, the 
new  Clean  Trade  and  Investment  Partnerships  and  any  similar  long-term  partnerships, 
including in the context of Global Gateway (fails to fully meet Specific Objective 3.2). 

38 

 
 
 
 
 
 
While option 1 would in principle allow a swift roll-out and utilisation of the updated toolbox, 
it would not create an enabling condition for new tools such as guarantees for Export Credit 
Agencies or direct support to the EU companies, which require medium- to long-term horizon. 
Without certainty of the EU’s steady involvement in a partner country through de-risking and 
contribution to an enabling business environment, private sector’s ability to take risk would 
not be supported in an optimal manner (fails to meet Specific Objective 3.3). 

Furthermore,  due  to  frequently  changing  funding  priorities,  there  is  a  risk  of  inefficient 
allocation of resources, which could come with negative economic impact to the EU but also 
to  partner  countries.  Under  this  option,  key  long-term  objectives  would  risk  systematic 
subordination  to  short-term  needs  and  could  negatively  impact  the  EU’s  ability  to  fulfil  its 
financial obligations as stipulated by multilateral commitments. Finally, the need for annual 
adjustments and negotiations could increase complexity and administrative costs for the EU. 

Social impact  

Option 1 allows for swift reaction to humanitarian and other basic needs, which can lead to 
more  effective  responses  to  crises  and  support  to  vulnerable  populations  (meets  Specific 
Objective 1.1). 

However, it would overlook preparedness and resilience dimension – a lesson learnt from the 
COVID-19 crisis and a growing EU priority that requires long-term planning and investment. 
Moreover,  option 1  would  not  achieve  humanitarian  and  development  objectives  through 
multilateral organisations that depend on donors’ medium- to long-term commitment. 

The lack of long-term partnerships and predictable funding may weaken social outcomes in 
partner  countries,  such  as  poverty  reduction,  education,  health  and  other  long-term 
development objectives (fails to meet Specific Objectives 2.1 and 2.2). It may not foster social 
change  in  partner  countries  to  the  tune  of  their  international  commitments,  thus  altering 
consistency between internal and external policies (fails to meet Specific Objective 3.1). 

Environmental impact 

Option 1 allows for swift reaction to emerging environmental challenges, which can sometimes 
lead to more effective responses (meets Specific Objective 1.1). This could materialise through 
quick responses to environmental crises and urgent support to affected communities. 

However, these benefits are expected to be limited as most environmental challenges such as 
climate change and biodiversity loss are global, long-term  challenges requiring multiannual 
planning  and  provision  of  resources,  e.g.  in  line  with  the  New  Collective  Quantified  Goal 
agreed by the European Commission and EU Member States in 2024. 

In  addition,  the  lack  of  long-term  partnerships,  predictable  funding  allocation  and  thematic 
priorities may drastically impact the predictability of EU’s environmental, climate-related and 
circular  economy  funding,  which  requires  important  infrastructure  and  technological 
investments. This would undermine the EU’s ability to fulfil its financial obligations under the 
Paris  Agreement  and  for  the  implementation  of the  Kunming-Montreal  Global  Biodiversity 
Framework.  Furthermore, it may weaken environmental  outcomes in  partner countries  (e.g. 
establishment of natural protection areas). The prioritisation of flexibility may compromise the 

39 

 
 
 
 
 
 
EU’s  ability  to  meet  its  climate  objectives  should  candidate  countries  not  receive  adequate 
corresponding support. In this respect, Option 1 has a reduced ability to support sustainable 
development,  climate  change  mitigation  and  adaptation  initiatives  as  well  as  biodiversity 
initiatives (fails to meet Specific Objective 2.1 and 2.2), undermining the coherence between 
internal and external policies (fails to meet Specific Objective 3.1). 

Further remarks 

Option 1 would respond to the continued pressure for increased adaptability of the EU external 
financing  instruments  in  a  challenging  geopolitical  context.  However,  even  if  financial  and 
operational  barriers  between  the  current  standalone  instruments  were  considerably  reduced 
under one instrument, option 1 would fall short in providing an integrated approach for regions.  

In addition, considering that the respondents of the Open Public Consultation deem it important 
that the EU continues to support multiple policy objectives, the ‘short-termism’ at the core of 
option 1 would not create an enabling environment to engage in the full range of economic, 
social and environmental priorities to the extent needed. In fact, due to its focus on crises and 
opportunities,  option  1  would  mainly  serve  short-term  economic,  social  and  environmental 
objectives, to the detriment of longer-term development interventions that are also necessary 
to sustain the coherence between internal  and external  action. This means that it would fall 
short of the potential of one instrument to provide not only short-term but also medium- to 
long-term interventions to advance sustainable development in the EU’s candidate and partner 
countries.  This  would  hamper  the  EU’s  objectives  of  economic,  social  and  environmental 
development in these countries and could also undermine long-term development and security 
of the EU itself. 

Option 2: an instrument based on regional and global envelopes with indicative financial 
allocations  covering  both  programmable  and  non-programmable  components  –  
Ukraine-related support for pre-accession and reconstruction needs above MFF ceilings 

Economic impact 

Option 2 ensures predictability in funding allocation, conducive to more effective partnership-
building and investment horizon, providing partner countries and implementing partners with 
a  degree  of  stability  (meets  Specific  Objective  1.2).  At  the  same  time,  the  combination  of 
programmable and non-programmable funding at the regional or global level allows to flexibly 
respond  to  emerging  economic  foreign  policy  opportunities  and  crises (meets  Specific 
Objective 1.1). 

Furthermore,  option  2  can  better  attract  private  sector  investment  as  the  predictability-
flexibility  balance  would  facilitate  developing  de-risking  modalities  such as  guarantees  and 
support to the EU companies, thus making it easier for companies and investors to plan ahead 
and invest in long-term projects (meets Specific Objective 3.3). The EU’s capacity to cover 
financial risk would result in a greater leverage effect and subsequent positive economic impact 
in  EU’s  partner  countries  and  the  EU  alike.  Similarly,  option  2  would  enable  to  provide 
guarantees through export credit agencies.  

Option 2 would improve the interplay between internal and external policies. A more coherent 
approach at  regional level  would allow the EU to better respond to  opportunities in  partner 

40 

 
 
 
 
 
 
countries and build alliances in a multi-polar world. Therefore, option 2 would meet the EU’s 
expectation  of  mutual  benefits  and  alignment  with  its  strategic  interests,  such  as  regulatory 
convergence, promotion of mutually beneficial partnerships, implementation of key reforms to 
improve  stability  in  partner  countries,  competitiveness,  economic  security  and  secure  value 
chains  for  digital  and  emerging  technologies,  clean  energy,  clean  tech  and  critical  raw 
materials. Option 2 and its regional approach would enable an efficient use of the toolbox that 
would  help  scaling-up  of  the  Global  Gateway  offer  and  to  launch  of  Clean  Trade  and 
Investment Partnerships (meets Specific Objectives 3.2 and 3.3). 

The  use  of  indicative  financial  allocations  for  regions  can  lead  to  more  effective  use  of 
resources,    (meets  Specific  Objective  2.1),  thus  potentially  reducing  complexity  and  even 
administrative  costs. Finally,  a  broader  instrument  may  decrease  administrative  costs  in  the 
form  of  single  support  measure  and  technical  assistance  under  one  package  (that  may 
incorporate various components from investments to migration management). 

Social impact 

Option 2 allows predictable and stable partnerships with partner countries, which can lead to 
more effective social outcomes, such as poverty reduction and quality education, including for 
vulnerable  populations  (meets  Specific  Objective  1.2).  The  use  of  indicative  financial 
allocations  for  regions  and  countries  can  lead  to  a  more  integrated  approach  to  social 
development. In particular, the humanitarian-development-peace nexus would be significantly 
facilitated under option 2 (meets Specific Objective 2.2). 

The longer-term perspective under option 2 also encourages investment in key social services, 
with  important  impacts  in  terms  of  addressing  some  demographic  challenges  and  lack  of 
employment opportunities especially for the youth. This, in turn, has wider effects on societal 
cohesiveness and migration. 

When it comes to Global Gateway and its 360°-approach84 to ensure local value added in the 
value chains, option 2 and its multiannual perspective for sustainable and high-quality projects 
would benefit local communities. 

Finally, the use of indicative financial allocations for regions and countries can enable greater 
coherence  between  external  and  internal  policies,  as  the  EU  strives  to  embed  its  role  as  a 
responsible  global  leader  promoting  decent  work  and  social  inclusion  worldwide  under  the 
European Pillar of Social Rights Action Plan (meets Specific Objective 3.1). This coherence 
may, in turn, facilitate social development in partner countries. 

84 Global Gateway investments adhere to principles of (1) democratic values and high standards; (2) good governance and 
transparency; (3) equal partnerships, (4) green and clean, (5) security-focused, and (6) catalysing private sector investment. 
While respecting these principles, the Global Gateway 360-degree approach is about creating an enabling environment for 
sustainable and quality investments, which promotes high social, environmental and governance standards (ESG), supports 
climate neutrality and the green and digital transition and enhances respect for human rights, the rule of law, non-discrimination 
and  promoting  decent  work,  education,  gender,  youth,  social  rights  and  the  reduction  of  inequalities.  It  requires  macro-
economic stability and fiscal policies aimed at creating an enabling environment for private sector investment (cfr. the “Collect 
More Spend Better” agenda around Domestic Resource Mobilisation and Public Finance Management and actions supporting 
access to finance for SMEs). 

41 

 
 
 
 
 
 
 
Environmental impact 

Option 2 ensures predictable and stable funding for environmental challenges, such as climate 
change and biodiversity loss, which can lead to more effective responses given that mitigating 
climate change, halting  biodiversity  loss and building a circular economy require important 
infrastructure  and  technological  investments  (meets  Specific  Objective  1.2).  The  use  of 
indicative financial allocations for regions and countries under one instrument can lead to a 
more  integrated  approach  to  environmental  development  (meets  Specific  Objective  2.1  and 
2.2). This tailor-made approach allows the EU to continue delivering on the commitments of 
developed  countries  to  support  developing  countries  in  the  implementation  of  major 
multilateral environmental agreements concluded in the recent years. 

As environmental problems know no borders, a stable and region/country-specific approach 
brings also environmental benefits to the EU (meets Specific Objective 3.1). 

However, if the option is only guided by EU strategic interests, it may become overly focused 
on  economic  development  and  prosperity.  This  may  lead  to  trade-offs  brought  by  twin 
transition and neglect of environmental concerns. Even if such scenario did not materialise, the 
EU  should  tackle  upfront  any  such  perception  risk.  Possible  negative  perceptions  can  be 
mitigated by ensuring the highest environmental, social and governance standards, for instance 
in  projects  associated  with  the  extraction  of  critical  raw  materials,  as  well  as  by  effective 
communication. 

Further remarks 

Option 2 would ensure vertical adaptive capacity, due to its in-built flexibility at the regional 
level.  This  means  that  while  part  of  the  funding  would  be  programmed  for  long-term 
investment  priorities,  a  part  would  be  non-programmable,  leaving  room  to  react  to  crisis 
situations through humanitarian aid, macro-financial assistance, and rapid response. Moreover, 
the  programmable  part  would  be  adaptable  to  the  opportunities  related  to  investment  and 
creation  of  strategic  partnerships  in  the  region,  thus  providing  flexibility  in  the  planning  of 
long-term development projects. A carefully deliberated balance between programmable and 
non-programmable  funds  is  needed  also  for  the  synergies  and  interlinkages  with  internal 
priorities, as some of them will require a long-term investment horizon (e.g. green and digital 
transition,  competitiveness),  while  others  may  also  benefit  from  swift  reactions  (e.g. 
migration). 

Simultaneously, combining structural and crisis tools under the same regional envelope under 
one instrument would allow for a better alignment of priorities and more synergic approach to 
partner countries’ economic, social and environmental development, with strong potential for 
positive sustainability impact. This aligns with the outcome of the Open Public Consultation 
where respondents stressed that the future external financing instrument should serve multiple 
policy objectives85. 

85 Policy objectives included in the OPC were green transition, digital transition, migration and asylum, peace and security, 
human rights, democracy and the rule of law, public diplomacy and fight against disinformation, preparation for EU accession, 
engagement in fragile contexts. 

42 

 
 
 
 
 
 
 
Finally, separating Ukraine, through a separate funding source above the MFF ceiling, from 
the  other  Union  candidates  might  cause  some  issues  regarding  the  enlargement  policy’s 
consistency  and  raise  concerns  of  unequal  treatment  of  enlargement  partners  (fails  to  meet 
Specific  Objective  3.4).  However,  responding  to  the  economic  fallout  of  Russia’s  war  of 
aggression is closely linked to Ukraine’s socio-economic convergence with the EU. Despite 
Ukraine’s  economy  demonstrating  resilience,  uncertainty  remains  high,  with  risks  to  the 
budget,  as  the  conflict  continues  to  severely  impact  Ukraine’s  people,  economy,  and 
infrastructure.  A  single  funding  source  above  MFF  ceilings  may  allow  to  better  support 
overlapping objectives: Ukraine’s path towards meeting the economic accession requirements 
and post-war economic recovery and reconstruction (meets Specific Objective 2.4). 

Option 3: an instrument based on regional and global envelopes with indicative financial 
allocations covering both programmable and non-programmable components – Ukraine 
pre-accession  needs  covered  by  this  instrument  inside  MFF  ceilings  and  Ukraine 
reconstruction needs above MFF ceilings 

The difference between option 2 and option 3 is that the latter would build on programmable 
accession funding for Ukraine under the external instrument, inside MFF ceilings, and source 
financial  resources  for  reconstruction  needs  above  MFF  ceilings.  Therefore,  the  above-
mentioned economic, social, and environmental features of option 2 in terms of predictability 
and policy coherence under a single external financing instrument also apply to option 3. 

Economic impact 

By catering for both pre-accession support (covered under the instrument) and reconstruction 
support (financed over and above the MFF ceilings but channelled through the instrument), 
option  3  would  allow  to  combine  predictability  of  pre-accession  support  to  Ukraine  and 
credible  funding  for  post-war  reconstruction.  Option  3  further  promotes  equal  treatment  of 
enlargement  partners  along  their  merit-based  accession  paths  (meets  Specific  Objective 
3.4). Consequently, this approach would ensure fair conditional support to all candidates and 
potential candidates while covering Ukraine’s funding needs and economic recovery (meets 
Specific Objective 2.4). 

However,  sourcing  EU  support  to  Ukraine  from  two  different  budget  sources  raises  the 
difficulty  of  drawing  a  distinction  between  pre-accession  and  reconstruction  financing  for 
Ukraine. This distinction can be particularly challenging to make with regard to the economic 
accession criteria (fails to meet Specific Objective 2.4).  

Social impact 

Ukraine remains at an early stage of accession preparation in the field of social policy86, also 
suffering from the social consequences of Russia’s war of aggression. Ensuring targeted and 
predictable pre-accession support through option 3 for greater convergence and alignment with 
the  EU  could  visibly  support  accession-related  progress  on  social  matters  (meets  Specific 
Objective 3.4). 

86 2024 Communication on EU enlargement policy, COM(2024) 690 final 

43 

 
 
 
 
 
 
 
On the other hand, a single funding source for Ukraine such as under option 2 may allow to 
better  address  priority  overlaps  from  a  social  policy  perspective  and  to  accommodate 
continuing  uncertainties.  In  many  cases,  supporting  Ukraine’s  progress  on  social  policy 
implementation is linked to reconstruction efforts, given the need to address the destruction of 
housing and social infrastructure. As a fallout from Russia’s war of aggression, the country 
presents a critical need for investments, at local and regional level, in infrastructure to provide 
proper social services and healthcare. Conversely, option 3 would not allow for such synergies 
(fails to meet Specific Objective 2.4). 

Environmental impact 

An  advantage  of  option  3  is  that  it  more  visibly  focuses  funding  on  alignment  with  EU 
environmental standards. Option 3 would also allow for increased predictability to the benefit 
of the EU’s environmental and climate-related objectives in Ukraine. 

On  the  other  end,  Russia’s  war  of  aggression  has  caused  and  risks  to  continue  causing 
significant environmental damage in Ukraine. In this volatile context, two different funding 
sources  would  hamper  the  EU's  ability  to  adjust  its  strategies  to  mitigate  and  adapt  to  the 
adverse effects of climate change in the very specific context of a war-torn country (fails to 
meet Specific Objective 2.4). 

Further remarks 

Option  3  would  allow  to  align  the  architecture  of  external  financing  with  the  streamlined 
approach of pre-accession funding under one instrument. 

7.  HOW DO THE OPTIONS COMPARE? 

This chapter compares the three options to the baseline, which is the current external financing 
architecture covering NDICI-Global Europe, IPA III, Facilities, funding for humanitarian aid 
and macro-financial assistance. The specific objectives, introduced in chapter 4, are used as a 
yardstick  when  comparing  the  options  to  the  baseline.  This  comparison  is  made  from  the 
effectiveness and coherence point of view, i.e. to what extent the baseline and the options would 
reach the specific objectives designed to tackle the problem drivers (introduced in chapter 2). 

The  assessment  is  qualitative  and  does  not  include  a  cost-benefit  nor  a  cost-effectiveness 
analysis87. However, efficiency is qualitatively evaluated in the predictability-flexibility axis. 

To conclude this chapter, the impact assessment illustrates the capacity of different options to 
deliver  on  EU  external  policies  priorities,  with  a  focus  on  creating  strategic  partnerships, 
ensuring stability, supporting the implementation of the Global Gateway, addressing fragility 
and crisis situations, as well as EU engagement in Global Funds. 

87 The reasons for these limitations are explained in Annex 3. 

44 

 
 
 
 
 
 
 
 
 
Finally,  the  comparison  table  at  the  end  of  this  chapter  provides  a  visualisation  of  the 
comparison  between  the  baseline  and  the  options.  The  options’  relation  to  the  baseline  is 
marked as (++), (+), neutral, (-) and (--). The different degree of plusses (++) (+) indicates that 
the options fare better than the baseline when using the specific objectives as a yardstick, while 
the different degree of minuses (-) (--) indicates the opposite, i.e. deterioration88. 

Provide adaptability and stability by striking the right balance between programmable 
and non-programmable actions - Specific objective 1 

Baseline 

NDICI-Global Europe revolves around three pillars that contribute to the overall effectiveness 
and  flexibility  of  the  instrument:  a  geographic  pillar  and  a  thematic  pillar  that  are  both 
programmable,  providing  a  multiannual  financing  prospect  for  partner  countries  and  on 
thematic priorities, along with a (non-programmable) third pillar for rapid response actions, 
notably  to  react  to  emerging  and  existing  crises.  NDICI-Global  Europe’s  flexibility  is  also 
demonstrated by its broad and enabling nature, which has allowed to successfully roll out the 
Global Gateway strategy. A key feature is the ‘emerging challenges and priorities cushion’. In 
the first years of implementation, the cushion proved to be a strategic tool, responding to crises, 
unforeseen  events  and  Union  priorities,  notably  by  supporting  partner  countries  facing  the 
COVID-19  pandemic,  Ukraine  following  Russia’s  war  of  aggression,  and  migration-related 
challenges. 

How do the options compare? 

Against  this  backdrop,  and  when  looking  at  their  potential  to  create  long-term  partnerships 
while adapting to new situations, all three options come with strengths and weaknesses. 

When compared to the baseline, option 1 would provide a maximum capacity to adjust to new 
priorities,  emerging  crises  and  humanitarian  needs  as  its  prioritisation  would  be  based  on 
annual decision-making. The independent study underpinning the mid-term evaluation noted 
that even though the current instruments increased responsiveness to crises, the flexibility of 
the  regulatory  framework  has  been  stretched  to  the  limit  and  certain  financial  resources 
depleted89. One finding from the mid-term evaluation was that multi-year programming does 
not always facilitate alignment to rapidly shifting policy context on both partner countries and 
EU  side.  In  addition,  a  large  majority  of  respondents  to  the  Open  Public  Consultation  also 
considered that the  EU  external  financing  is not  sufficiently  flexible to  respond in  a timely 
manner to crises at EU’s borders and beyond. These would plead in favour of a fully flexible 
instrument under option 1. 

However, skipping programming would hamper long-term strategic planning both for the EU 
and  for  its  partners.  In  this  respect,  option  1  would  downgrade  the  baseline  as  regards 
predictability. As mentioned in chapter 2, respondents of the Open Public Consultation are of 
the opinion that flexibility should complement predictability. 

88 Categorisation as follows: significant upgrade (++), upgrade (+), downgrade (-), significant downgrade (--) 
89  Evaluation  of  the  European  Union's  external  financing  instruments  (2014-2020  and  2021-2027);  Independent  study  in 
support of the evaluation Volume I, Synthesis report, Publications Office of the European Union, p. 65 

45 

 
 
 
 
 
 
 
 
When compared to the baseline, options 2 and 3 would be neutral in terms of predictability, 
with  programmable  components  under  each  geographic  pillar  and  under  the  global  pillar, 
allowing  to  establish  long-term  partnerships  and  address  longer-term  challenges.  When  it 
comes to flexibility and adaptability, options 2 and 3 represent an improvement as the non-
programmable part within each geographic region and the global pillar would leave more room 
to  react  to  crisis  situations  through  humanitarian  aid,  macro-financial  assistance  and  rapid 
response. Option 2 is more flexible than option 3 because all Ukraine related funds are placed 
over and above the MFF. 

Increase  responsiveness  by  simplifying  the  architecture  of  the  instruments  -  Specific 
objective 2 

Baseline 

The  set-up  of  NDICI-Global  Europe  merged  11  previous  instruments,  thus  radically 
simplifying the financing framework and improving the coherence of the EU’s external action. 
However,  IPA  III stayed separate  as a dedicated instrument  to  support accession processes, 
unforeseen needs called for the introduction of new facilities, and humanitarian aid remained 
aside. 

How do the options compare? 

All  three  options  would  further  simplify  the  financing  architecture  by  bringing  funding  for 
enlargement, neighbourhood, international partnerships, humanitarian aid and macro-financial 
assistance  under  one  roof.  As  compared  to  the  baseline,  this  would  result  into  greater 
responsiveness of EU funding as well as more coherence between regions. 

Options 2 and 3 would compare better to the baseline as their dual short and medium/long-term 
focus would facilitate coherence between different tools and would significantly facilitate the 
humanitarian-development-peace nexus  as medium-term  policy tools  (programmable funds) 
and  crisis  policy  tools  (non-programmable  funds)  would  be  combined  for  each  region  for 
synergetic effect. 

Regarding the budgetary architecture for Ukraine, option 2 foresees a single dedicated funding 
stream through which the Union could address flexibly the interlinkages between Ukraine’s 
accession  path  and  post-war  reconstruction.  In  the  current  uncertain  context,  isolating 
Ukraine’s funding would further allow to limit potential impacts on the overall pre-accession 
assistance envelope, thereby improving support predictability for other enlargement partners. 

Advance policy coherence and the EU’s strategic interests by creating and updating tools 
- Specific objective 3 

Baseline 

NDICI-Global Europe provides an enabling framework to pursue coherence between internal 
and external  policies and includes a wide array  of tools while allowing the development  of 
mutually beneficial partnerships. With EFSD+, the current  instrument  already promotes the 
use of the EU funds for leverage and catalytic effect. Spending targets for climate and migration 

46 

 
 
 
 
 
 
 
improve coherence with internal policies, along with the commitment to contribute to the MFF 
target for biodiversity. 

How do the options compare? 

All three options would increase coherence compared to the baseline. This is because all three 
options pool NDICI-Global Europe, IPA III, Facilities, and funding for humanitarian aid under 
one instrument. In addition, updated tools (such as macro-financial assistance and policy-based 
financial  assistance  to  partner  countries)  extend  the  toolbox  to  build  mutually  beneficial 
packages. Updated toolbox would include a wide array of tools, including guarantees and loans 
as well as support to the EU companies, matching short-term opportunities that arise, which 
would lead to better leverage and catalytic effect. 

Options 2 and 3 would compare better to the baseline when assessing them against the yardstick 
of policy coherence and strategic interests. Given that options 2 and 3 include both medium-
term  and  crisis  tools,  the  greater  predictability  offered  to  partners  would  be  beneficial  to 
implement  longer-term  reforms.  It  would  also  favour  the  EU  private  sector  and  facilitate 
engagement with the latter, allowing for the best possible use of the updated toolbox. In turn, 
this  would  boost  both  the  EU’s  competitiveness  and  partner  countries’  sustainable 
development. 

The independent study supporting the mid-term evaluation noted in its conclusions the need to 
improve  coherence  and  synergies  between  development  and  accession  objectives,  broader 
foreign  policy objectives and  advancement of EU interests  and values90.  From the internal-
external policy coherence point of view, all three options represent an improvement from the 
baseline,  as  they  would  include  equivalent  coherence  provisions  with  the  Competitiveness 
Fund and other relevant internal funds while ensuring better alignment. Options 2 and 3 would 
however fare better. Indeed, while option 1 would allow for more flexibility and adaptability 
and increased coherence between different tools within the same region  or between regions 
within  the  instrument,  it  would  lack  a  long-term  strategic  planning  which  is  essential  for 
aligning internal and external policies. 

In  particular,  options  2  and  3  would  support  more  ambitious  climate  action  in  EU  partner 
countries to address the risk of carbon leakage, and thereby foster the competitiveness of EU 
businesses. They would help establish new markets for EU cleantech companies and support 
the  EU’s  own  green  industrialisation  agenda  and  policy  initiatives  such  as  the  new  Clean 
Industrial Deal. Options 2 and 3 would also allow to mainstream EU priorities in the EU budget 
action, including a more coherent implementation of the Do No Significant Harm principle, 
with a strengthened focus of resilience by design91. Options 2 and 3 with the inclusion of a 
longer-term  approach  would,  through  the  strengthening  of  candidate  countries'  capacity  to 
address climate challenges, support an enlarged EU in meeting its own climate targets. 

The  independent  study  to  the  mid-term  evaluation  noted  that  the  implementation  of  the 
geographisation  principle  promoted  by  NDICI-Global  Europe  had  contributed  to  better 

90  Evaluation  of  the  European  Union's  external  financing  instruments  (2014-2020  and  2021-2027);  Independent  study  in 
support of the evaluation Volume I, Synthesis report, Publications Office of the European Union, p. 61 
91  The  Do  No  Significant  Harm  principle  is  considered  in  more  detail  in  a  separate,  horizontal  impact  assessment  on 
performance. 

47 

 
 
 
 
 
 
 
coherence of EU external financing with EU policy priorities at country level92. Given that the 
Commission Communication on the road to the next multiannual financial framework noted 
the need to better align EU policy objectives with spending priorities to strengthen the impact 
of  EU  action,  options  2  and  3  would  better  realise  such  objectives.  They  would  further 
implement the policy first approach, with an appropriate balance between short term responses 
and long-term strategic planning. 

Efficiency 

The  baseline  offers  a  high  degree  of  certainty  for  outcomes  through  multiannual  country 
programming and a high number of spending targets. A degree of flexibility is ensured through 
the  cushion  and  the  rapid  response  pillar,  as  well  as  regional  programmes.  However,  the 
rigidness  of  multiannual  programming  at  country  level  and  spending  targets  hamper  the 
instrument’s agility. In addition, sub-optimal interplay between policies may lead to further 
rigidities and thus inefficiencies. As regards targets, the independent study for the mid-term 
evaluation noted that while they reflect certain EU priorities, they complexify programming. 
Feedback  from  the  Open  Public  Consultation  in  the setting  of the mid-term  evaluation  also 
pointed to the limitations of targets as a policy monitoring tool93. 

Option 1 provides opportunity for swift reprioritisation which, at the outset, indicates efficiency 
gains  in  the  use  of  funds.  However,  option  1’s  potential  costs  related  to  reduced  (policy) 
predictability, annual reallocation of resources, as well as increased complexity of decision-
making and its  associated administrative costs are likely  to  outweigh  the expected benefits. 
Furthermore,  as  option  1  provides  no  or  only  limited  multiannual  investment  for  partner 
countries, it may simply make the EU’s offer less interesting to partner countries. All things 
considered, the overall balance is likely to be negative, indicating that option 1 may not provide 
significant  added value compared to  the baseline, even though  it considerably  increases the 
flexibility of the external financing architecture. 

The  benefits  of  options  2  and  3  related  to  predictable  and  stable  partnerships,  improved 
humanitarian-development-peace  nexus,  strengthened  coherence  and  interplay  between 
external  and  internal  policies,  increased  catalytic  effect  through  updated  tools  as  well  as 
regional flexibility in responding to economic foreign policy opportunities and crises offer a 
better frame to manage the costs and benefits ratio of the EU’s external action. Options 2 and 
3 may thus provide added value when compared to the baseline. 

Regarding  the  budgetary  architecture  for  Ukraine,  option  2  provides  the  possibility  to  put 
forward a comprehensive and coherent support framework for the country and to avoid creating 
separate funding streams with overlapping objectives, with potential efficiency gains. 

Capacity to deliver on external action priorities 

In terms of capacity to deliver the key policy objectives, options 2 and 3 appear as the best 
options when compared to the baseline: 

92 Idem., p. 12 
93  Evaluation  of  the  European  Union's  external  financing  instruments  (2014-2020  and  2021-2027);  Independent  study  in 
support of the evaluation Volume I, Synthesis report, Publications Office of the European Union, p. 17 

48 

 
 
 
 
 
 
 
•  For  enlargement  partners,  options  2  and  3  provide  predictability  concerning  pre-
accession  support  while  equipping  the  Union  with  the  flexibility  to  react  to  new 
challenges and priorities. Option 1 would not provide enough medium- and long-term 
perspective  to  credibly  accompany  candidates  and  potential  candidates  on  their 
accession paths towards membership. 

•  The  predictability  provided  by  options  2  and  3  would  also  be  key  for  other  closer 
neighbours and strategic partners with whom the EU aims at building strategic relations 
based  on  an  integrated  offer.  The  potential  of  making  full  use  of  the  EU  toolbox  to 
support  reforms,  stability  and  prosperity  would  be  substantially  limited  under  the 
extreme flexibility foreseen in option 1. 

•  Given  that  Global  Gateway  is  an  offer  taking  a  comprehensive  approach  tailored  to 
partners’  needs,  creating  an  enabling  environment  for  sustainable  and  quality 
investments,  which  promotes  high  social,  environmental  and  governance  standards, 
options 2 and 3 are better suited to achieve its objectives. In addition, with the flexibility 
added to programmable funding, options 2 and 3 would allow to build more integrated 
investment  packages  to  support  greater  sustainable  resilience,  while  strengthening 
partnerships that are important for Europe’s own strategic autonomy and its green and 
digital transitions. 

•  For very fragile countries, option 1 would suitably provide crisis tools complemented 
by humanitarian assistance to cover immediate needs. However, this option would lose 
sight  of  the  medium  to  long-term  objectives  for  an  integrated  and  country-adapted 
approach,  based  on  knowledge  of  the  local  contexts  and  a  long-term  vision  for 
resilience-building and supporting institution building when conditions allow. Going 
beyond the provision of basic needs and laying the groundwork for greater stability and 
resilience  would  be  hampered  by  the  absence  of  a  multiannual  perspective.  This 
integrated approach would benefit from the model under options 2 and 3 to yield better 
outcomes, given the capacity of programmable funds to engage beyond humanitarian 
aid  and  crisis  response.  In  the  same  vein,  pursuing  engagement  in  extremely  fragile 
countries - including those with open conflicts, or complex settings, where partnering 
with the country’s de facto authorities is not possible – requires flexible EU financing 
that addresses all drivers of fragility. 

•  While  issues  related  to  migration  and  forced  displacement  are  not  limited  to  fragile 
countries, a comprehensive approach to migration also requires stronger engagement 
with countries of origin and transit. The next instrument will have to further support 
comprehensive  partnerships,  which  would  need  to  be  underpinned  by  a  balanced 
financing model in options 2 and 3. 

•  Regarding multilateral engagement, notably in support of global funds, options 2 and 3 
appear  as  the  best  options  to  balance  flexibility  and  predictability  (including  for 
partners), thus fostering a higher return on investment while pushing for an effective 
reform agenda within the United Nations and other multilateral fora. 

49 

 
 
 
 
 
 
Comparison table 

Specific objectives94 

Baseline 

Option 1 

Option 2 

Option 3 

Effectiveness 

A fully flexible instrument 

SO1 

SO1.1 

Strike the right balance between programmable and non-programmable 

Ensure predictability by 
establishing  mutually 
beneficial  medium-  to 
long-term  partnerships 
with partner countries 

Good  level  of  predictability 
for partner countries through 
regional 
country 
and 
Multiannual 
Indicative 
Programmes 

No  predictability  for  partner 
countries  as  priorities  would 
be decided annually, without 
multiannual  planning.  It  is 
that  a  majority  of 
likely 
countries  would  not  receive 
any funding, to the detriment 
of  medium 
long-term 
partnerships.  

to 

be 

Under  this  option,  also  the 
approach 
Team  Europe 
considerably 
would 
less 
with 
weakened, 
predictability  leading  to  a 
more  difficult  coordination 
of  EU  and  Member  States’ 
cooperation. 

(--) 

balancing 
Instrument 
flexibility 
and 
predictability  –  Ukraine 
covered  over  and  above 
MFF ceilings 

balancing 
Instrument 
flexibility 
and 
predictability  –  Ukraine 
partially  covered  by  the 
instrument 
inside  MFF 
ceilings 

predictability 
countries 

for 
Partial 
partner 
with 
minimum amounts in country 
envelopes.  

predictability 
countries 

for 
Partial 
partner 
with 
minimum amounts in country 
envelopes.  

programming 
Regional 
would  also  bring  financial 
predictability.  In  case  of 
positive  developments  in  a 
country,  the  EU  would  be 
ready  to  step  in  via  regional 
envelopes. 

programming 
Regional 
would  also  bring  financial 
predictability.  In  case  of 
positive  developments  in  a 
country,  the  EU  would  be 
ready  to  step  in  via  regional 
envelopes. 

When  it  comes  to  the  Team 
Europe approach, this option 
would  allow  for  meaningful 
coordination. 

When  it  comes  to  the  Team 
Europe approach, this option 
would  allow  for  meaningful 
coordination. 

94 Specific objectives constitute the yardstick when options are compared to the baseline. 

50 

 
 
 
 
 
 
 
 
 
 
 
 
(neutral) 

(neutral) 

SO1.2 

capacity 

Ensure 
to 
adjust to new priorities, 
emerging  crises  and 
humanitarian needs 

priorities. 

Limited capacity to adjust to 
new 
Possible 
mainly  via  the  mobilisation 
of the cushion and mid-term 
review  of  programmable 
allocations. 

Maximum capacity to adjust 
and 
to 
new 
emerging 
and 
humanitarian  needs  ensured 
through annual prioritisation. 

priorities 
crises 

(++) 

and 

Partial  capacity  to  adjust  to 
emerging 
new  priorities, 
crises 
humanitarian 
needs  ensured  through  the 
non-programmable 
components  and  the  cushion 
as  well  as  the  indicative 
allocations of funds for each 
pillar  that  will  allow  for 
flexibility 
of 
in 
unforeseen needs. Placing of 
support 
Ukraine-related 
above  MFF  ceilings  is  an 
important flexibility feature. 

case 

and 

Partial  capacity  to  adjust  to 
emerging 
new  priorities, 
crises 
humanitarian 
needs  ensured  through  the 
non-programmable 
components  and  the  cushion 
as  well  as  the  indicative 
allocations of funds for each 
pillar  that  will  allow  for 
flexibility 
of 
in 
unforeseen needs. 

case 

(neutral) 

SO2 

SO2.1 

Simplification of instruments 

integrated 
Ensure 
approach 
through 
allocations  indicatively 
allocated 
for  regions 
and  a  global  envelope 
under one instrument 

Limited  integrated  approach 
as funding scattered between 
3 instruments 

The  merged 
instrument 
would  allow  a  coherent 
approach worldwide.  

(+) 

(+) 

The  merged 
instrument 
would  allow  a  coherent 
approach  worldwide.  The 
interplay  between  the  short-
term 
and  medium-term 
components  of  each  region 
increase  coherence 
would 
between  tools  under  each 
region. 

The  merged 
instrument 
would  allow  a  coherent 
approach  worldwide.  The 
interplay  between  the  short-
term 
and  medium-term 
components  of  each  region 
increase  coherence 
would 
between  tools  under  each 
region. 

 (++) 

 (++) 

SO2.2 

Improve  humanitarian-
development-peace 
policy nexus 

Nexus  approach  under  all 
in  particular 
pillars,  and 
“resilience” 
through 
rapid 
the 
component  of 

the 

Nexus  approach  would  be 
strengthened 
the 
integration  of  humanitarian, 
development  and  security 

by 

Nexus  approach  would  be 
strengthened 
the 
integration  of  humanitarian, 
development  and  security 

by 

Nexus  approach  would  be 
strengthened 
the 
integration  of  humanitarian, 
development  and  security 

by 

51 

 
 
 
 
 
 
response  pillar.  Coherence 
with  humanitarian  aid 
is 
ensured only through Article 
5 in NDICI-Global Europe. 

under 

tools 
instrument. 

the 

same 

(+) 

the 
tools  under  each  of 
different regional and global 
pillars of the instrument. 

the 
tools  under  each  of 
different regional and global 
pillars of the instrument. 

(++)  

(++) 

SO2.3 

interplay 
Improve 
enlargement 
between 
and 
neighbourhood 
policies (e.g. in case of 
backsliding  or  policy 
changes 
these 
countries) 

in 

interplay 

since 
No 
enlargement 
the 
neighbourhood have separate 
basic acts.  

and 

The  merged 
would allow an interplay.  

instrument 

(++) 

SO2.4 

Ensure  that  there  is  a 
specific 
for 
funding  the  needs  in 
Ukraine 

leeway 

Support under NDICI-Global 
Europe  is  not  sufficient  to 
address this SO. Therefore, a 
dedicated 
instrument  was 
created over and above MFF 
ceilings.  This  allowed  the 
Union  to  address  Ukraine’s 
acute  financing  needs,  while 
protecting  the  integrity  and 
stability  of  the  EU's  overall 
financial planning. 

also 

ensure 
and 

All  Ukraine-related  support 
being  over  and  above  MFF 
ceilings  would  increase  the 
EU’s spending capacity. This 
that 
would 
programmable 
non-
programmable  components 
from  which  other  regions 
would  benefit  from  remain 
stable  and  predictable,  not 
subject  to  disruptions,  thus 
protecting  the  integrity  and 
stability  of  the  EU's  overall 
financial planning. 

The  merged 
instrument 
would  allow  an  interplay. 
One separate funding stream 
for 
above  MFF  ceilings 
Ukraine  would  allow  for  a 
of 
higher 
and 
responsiveness 
the 
flexibility 
also 
country’s 
other 
without 
enlargement 
or 
geographies. 

within 
envelope, 
affecting 

partners 

degree 

the 

The  merged 
instrument 
would  allow  an  interplay. 
Distinguishing  Ukraine  pre-
accession and  reconstruction 
limits 
funding’s 
responsiveness to unforeseen 
developments  affecting  both 
pre-accession 
and 
reconstruction  efforts,  with 
possible  negative  spillover 
effects  on  funding  for  other 
partners.   

(++) 

(+) 

also 

increase 

ensure 
and 

Ukraine-related 
support 
being  above  MFF  ceilings 
the  EU’s 
would 
capacity.  This 
spending 
that 
would 
programmable 
non-
programmable  components 
from  which  other  regions 
would  benefit  from  stable 
and  predictable  funding,  not 
subject  to  disruptions,  thus 
protecting  the  integrity  and 
stability  of  the  EU's  overall 
financial  planning.  A  single, 
dedicated, funding stream for 
Ukraine above MFF ceilings 

All  Ukraine’s  reconstruction 
related  support  being  above 
MFF ceilings would increase 
the  EU’s  spending  capacity, 
while  providing  predictable 
pre-accession 
support 
through  the  instrument.  This 
that 
would 
programmable 
non-
programmable  components 
from  other  regions  would 
stable  and 
benefit 
predictable 
not 
subject  to  disruptions,  thus 
protecting  the  integrity  and 

funding, 

ensure 

from 

and 

52 

 
 
 
 
 
 
 
 
 
 
 
 
 
(++) 

stability  of  the  EU's  overall 
financial planning.  

(+) 

would allow to put forward a 
framework 
comprehensive 
pre-accession 
addressing 
objectives, 
reconstruction 
objectives,  as  well  as  their 
interlinkages, in line with the 
Ukraine Facility approach. 

(++) 

Create and modify tools to advance policy coherence and the EU’s strategic interests (e.g. competitiveness) 

customised, 
Build 
mutually 
beneficial 
packages  with  partner 
countries in all regions 

NDICI-Global  Europe  as  an 
enabling  framework  allows 
mutually beneficial packages 
but lacks some tools such as 
direct loans.  

encompass 

a 
Would 
comprehensive 
to 
build  mutually  beneficial 
packages. 

toolbox 

interplay 
Strengthened 
between 
policies  would 
facilitate  building  mutually 
beneficial packages.  

interplay 
Strengthened 
between 
policies  would 
facilitate  building  mutually 
beneficial packages.  

(++) 

(++) 

(++) 

Ensure 
coherence 
between  external  and 
internal 
policies 
including  via  Global 
Gateway 

The  need  for  coherence  is 
acknowledged in Article 5 of 
NDICI-Global  Europe. 
In 
practice, coherence limited to 
the  use  of  spending  targets, 
with 
of 
the 
migration. 

exception 

with 

Enhanced coherence through 
coherence 
equivalent 
provisions 
the 
Competitiveness  Fund  and 
other  relevant  internal  funds 
while 
better 
ensuring 
alignment of implementation 
modalities. 

with 

Enhanced coherence through 
coherence 
equivalent 
provisions 
the 
Competitiveness  Fund  and 
other  relevant  internal  funds 
while 
better 
ensuring 
alignment of implementation 
modalities. 

with 

Enhanced coherence through 
coherence 
equivalent 
provisions 
the 
Competitiveness  Fund  and 
other  relevant  internal  funds 
while 
better 
ensuring 
alignment of implementation 
modalities. 

(+) 

(+)  

(+)  

Foster  private  sector’s 
access  to  public  and 
private funding through 
enhanced toolbox 

effect 
is 
Catalytic 
incorporated 
in  NDICI-
Global Europe via the use of 
guarantees 

Would  include  a  wide  array 
of tools, including guarantees 
and  loans,  matching  short-
term opportunities that arise, 
which  would  lead  to  better 

Would  include  a  wide  array 
of tools, including guarantees 
and  loans,  matching  short-
term opportunities that arise, 
which  would  lead  to  better 

Would  include  a  wide  array 
of tools, including guarantees 
and  loans,  matching  short-
term opportunities that arise, 
which  would  lead  to  better 

53 

SO3 

SO3.2 

SO3.1 

SO3.3 

 
 
 
 
 
 
 
 
 
 
leverage and catalytic effect. 
However, the associated lack 
of 
predictability  would 
hamper the engagement with 
the private sector. 

(neutral) 

leverage and catalytic effect. 
Associated 
predictability 
ensures investment horizon. 

leverage and catalytic effect. 
Associated 
predictability 
ensures investment horizon. 

(++) 

(++) 

Efficiency 

Outcomes 

Certainty 
outcomes 
for 
through  multiannual  country 
programming  but  the  sub-
interplay  between 
optimal 
policies  may 
to 
inefficiencies.  

lead 

The lack of predictability and 
the 
ad  hoc  nature  of 
to 
lead 
engagement  may 
Outcomes 
inefficiencies. 
may  suffer  due 
to  weak 
planning and leverage. 

(-) 

Coherence 

Internal-external 

Internal-external  coherence 
ensured 
in  article  5  but 
working  methods  sometimes 
do  not 
through. 
follow 
Spending  targets  for  climate 
and  migration 
improve 
coherence,  along  with  the 
commitment to contribute to 
for 
the  MFF 
biodiversity. 

target 

allow 

according 

quick 
Would 
adaptations 
to 
annual  changes  in  internal 
priorities  but  no  spending 
targets  or  mainstreaming 
(e.g.  climate,  biodiversity, 
could  hamper 
migration) 
long-term 
achieving 
EU’s 
objectives. 
commitment 
long-term 
multilateral  goals  would  not 
be served in an optimal way. 

to 

for 

outcomes 
Certainty 
ensured 
through  mutually 
beneficial  packages,  linking 
the 
internal  and  external 
tools.  Programming  at  the 
regional 
allows 
level 
adaptations,  hence  greater 
efficiency.  

for 

outcomes 
Certainty 
ensured 
through  mutually 
beneficial  packages,  linking 
the 
internal  and  external 
tools.  Programming  at  the 
regional 
allows 
level 
adaptations,  hence  greater 
efficiency.  

(++) 

(++) 

Enhanced coherence through 
cross-references  with 
the 
Competitiveness  Fund  and 
other  relevant  internal  funds 
better 
ensuring 
while 
alignment of implementation 
modalities.  Updated  toolbox 
the  EU’s  strategic 
serves 
e.g. 
interests, 
competitiveness. 

Enhanced coherence through 
cross-references  with 
the 
Competitiveness  Fund  and 
other  relevant  internal  funds 
better 
ensuring 
while 
alignment of implementation 
modalities.  Updated  toolbox 
the  EU’s  strategic 
serves 
e.g. 
interests, 
competitiveness. 

(++) 

(++) 

(+) 

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
Economic, 
social 
environmental 
sustainability 

and 

All 17 SDGs 

Aligned  with  Agenda  2030 
and its SDGs  

Weak predictability hampers 
the 
objective-setting, 
monitoring and evaluation of 
SDGs  but  strong  flexibility 
allows 
crisis 
addressing 
situations swiftly 

(+) 

themes  under 

Regional  predictability  on 
the 
policy 
programmable 
parts 
facilitates  objective-setting, 
monitoring and evaluation of 
SDGs  while  flexibility  to 
address  crisis  situations  is 
guaranteed 
through  non-
programmable funds. 

themes  under 

Regional  predictability  on 
policy 
the 
programmable 
parts 
facilitates  objective-setting, 
monitoring and evaluation of 
SDGs  while  flexibility  to 
address  crisis  situations  is 
guaranteed 
through  non-
programmable funds. 

(++) 

(++) 

55 

 
 
 
 
 
 
8.  PREFERRED OPTION 

Based on the analysis of impacts and comparison, option 2 emerges as the preferred choice to 
be retained for the proposal. 

When  assessing  effectiveness,  coherence  and  efficiency  of  the  three  options  against  the 
baseline,  by  using  the  specific  objectives  of  the  impact  assessment  as  the  yardstick  of  the 
comparison, options 2 and 3 stand out due to their flexibility-predictability equilibrium that 
best supports these objectives. It thus provides a step ahead in policy coherence and flexibility. 
While pressure is on the latter, the option 2 better reconciles different political objectives by 
retaining an important degree of predictability. In terms of expected impact, both options 2 and 
3  are  more  likely  than  option  1  to  support  the  promotion  of  EU  strategic  interests  and  the 
sustainable development of partner countries. Options 2 and 3 would also likely better address 
the interlinkages between the different SDGs, balancing the three dimensions of sustainable 
development (economic, social, and environmental). 

Options 2 and 3 provide a simplification from the REFIT point of view. They consolidate the 
current  funding  architecture  by  integrating  several  instruments  (NDICI-Global  Europe,  IPA 
III,  Facilities), one funding source  (humanitarian aid) and the legal  basis for one  additional 
tool,  macro-financial  assistance,  under  one  umbrella  organised  by  region,  with  a 
complementary  global  pillar.  This  streamlines  the  funding  process,  reducing  financial  and 
operational  barriers  that  exist  in  standalone  instruments.  Simplification  thus  contributes  to 
clearer processes and management of resources. 

The inclusion of both medium to long-term support and crisis tools under one instrument also 
enables  options 2  and  3  to  adapt  to  changing  circumstances  while  maintaining  a  focus  on 
development  goals,  anticipating  impacts  of  critical  megatrends  and  mutually  beneficial 
interests.  This  adaptability  is  crucial  for  addressing  both  planned  and  unexpected  needs 
efficiently and in a future-proof way, which is a key aspect of regulatory fitness. 

Compared to option 1, options 2 and 3 - with their dual structure of programmable and non-
programmable funding - allow for both predictability in funding and flexibility to respond to 
unexpected  developments  (including  crises).  This  contributes  to  an  efficient  allocation  of 
resources  and,  when  coupled  with  conducive  working  methods,  will  reduce  administrative 
burdens by avoiding the need for constant adjustments of programmable frameworks. It should 
lead to  reductions in  complexity and administrative costs while also  providing stakeholders 
with long-term planning. 

Finally, options 2 and 3 enhance coherence between internal and external policies on one hand 
and between external policies on the other. The geographisation principle, including the use of 
regional envelopes facilitates alignment with the EU's strategic goals (e.g. via Global Gateway, 
Comprehensive  Partnerships,  Clean  Trade  and  Investment  Partnerships,  other  similar 
partnerships).  This  alignment  also  allows  for  more  coordinated  efforts  in  addressing  social, 
economic, and environmental challenges, thus ensuring that policies are mutually reinforcing 
rather than working in silos or at unintended cross purposes. In this respect, options 2 and 3 
have the capacity to better integrate policy objectives like competitiveness, economic security, 
resilient value chains, and environmental sustainability, given that these goals are strategically 
pursued together and that also the relevant internal funds include equivalent coherence clauses. 

56 

 
 
 
 
 
 
The  enabling  and  coordinated  approach  supports  the  EU's  strategic  interests  effectively, 
supporting long-term goals without fragmentation of regulations and modalities. 

As  compared  to  option  3,  option  2  would  ensure  continuity  with  the  Ukraine  Facility’s 
approach,  address  short-,  medium-  and  long-term  needs  comprehensively,  and  cover  the 
interlinkages  between  Ukraine’s  accession  path  and  post-war  reconstruction.  Furthermore, 
option 2 would allow to strike a balance between providing credible support to Ukraine in an 
uncertain  context  while  protecting  the  external  instrument’s  ability  to  deliver  on  needs  and 
priorities in other geographical areas.  

To summarise, from a REFIT perspective, option 2 provides benefits by simplifying regulatory 
frameworks, enhancing the efficiency and adaptability of resource allocation and by fostering 
policy coherence, thereby supporting  the EU's  strategic interests, long-term  goals  and crisis 
response  effectively  and  efficiently.  In  other  words,  in  response  to  the  problem  definition, 
option 2 can best help to design an external financing instrument that effectively advances the 
EU’s strategic interests while being responsive to fragility and crisis situations. 

9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

This  initiative will be monitored  and  evaluated  through the performance  framework for the 
post-2027  budget,  which  is  examined  in  a  separate  impact  assessment.  The  performance 
framework should provide for an implementation report during the implementation phase of 
the  programme,  as  well  as  a  retrospective  evaluation  to  be  carried  out  in  accordance  with 
Article 34(3) of Regulation (EU, Euratom) 2024/2509. The evaluation will be conducted in 
accordance  with  the  Commission's  Better  Regulation  Guidelines  and  will  be  based  on 
indicators relevant to the objectives of the programme. 

This impact assessment focusses on the architecture of the next external financing instrument, 
following the February 2025 Communication on the next MFF. The instrument itself will be 
enabling  in  nature,  and  is  expected  to  cater  for  in  an  increasingly  flexible  manner  various 
external  action  objectives  that  are  listed  in  the  annex  of  the  future  regulation.  The  specific 
objectives  of  the  impact  assessment  will  therefore  not  constitute  the  base  for  operational 
objectives  and  indicators.  The  indicators  of  the  future  instrument  will  focus  on  societal 
objectives  as  has  been  the  case  until  now  under  NDICI-Global  Europe  and  IPA  III.  These 
indicators are specified in the future Performance Regulation. 

The future monitoring and evaluation arrangements, including the Performance Regulationwill 
partly  build  upon  the  existing  Global  Europe  Performance  Monitoring  System  and  IPA  III 
Results Framework and the lessons learnt. Experience in the framework of the implementation 
of  the  Ukraine,  Western  Balkans  and  Moldova  Facilities,  as  well  as  of  the  Recovery  and 
Resilience Facility95, will be highly beneficial when it comes to both reform and investment 
performance measurement.

95 Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery 
and Resilience Facility 

57 

 
 
 
 
 
 
 
ANNEX 1: PROCEDURAL INFORMATION 

1.  LEAD DG, DECIDE PLANNING/CWP REFERENCES 

Lead services: DG for International Partnerships (INTPA) and DG Enlargement and Eastern 
Neighbourhood (ENEST) 

DECIDE reference: There is no Decide planning reference.  

2.  ORGANISATION AND TIMING 

The  preparation  of  the  impact  assessment  was  supported  by  an  Inter-Service  Group  (ISG) 
which  met  at  the  various  stages  of  the  process.  The  ISG  was  composed  of  the  following 
services: AGRI, BUDG, CLIMA, CNECT, EEAS, ECFIN, ECHO, FPI, HOME, HR, JUST, 
JRC, LS, MARE, MENA, MOVE, SG, TRADE.  

3.  CONSULTATION OF THE RSB 

This impact assessment was scrutinised by the Regulatory Scrutiny Board (RSB) in a hearing 
which took place on 4 June 2025, following an upstream meeting on 4 April 2025. The RSB 
provided an opinion without a qualification, referring to the specific approach related to the 
MFF process.  

The table below summarises the main points of the opinion of the Regulatory Scrutiny Board 
(RSB), indicating how its recommendations have been integrated into the evaluation. 

 Recommendations in the RSB opinion 

The  intervention  logic  is  not  consistent 
with  the  issues  raised  in  the  report.  The 
scope 
the 
implementation  architecture  rather  than 
the policy substance. 

report 

covers 

the 

of 

Integration of the RSB’s 
recommendations into the evaluation 
report 
The revised SWD explains more in detail the 
various components of the intervention logic. 
The intervention logic does not cover policy 
substance  as  such,  given  the  broad  and 
enabling  nature  of  the  external  financing 
instruments,  both  in  terms  of  scope  (policy 
areas covered) and in terms of geographical 
remit  (wide  range  of  partner  countries 
covered). The focus of the intervention logic 
is on the architecture. However, the chapter 
on problem definition includes sub-chapters 
on policy-specific challenges. 

58 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The report should analyse [...] notably which 
parts  of  [the  current  funding  landscape] 
should  be  discontinued  or  reoriented.  The 
intervention logic should be revised to better 
account for the issues facing external action 
funding. 

The  intervention  logic  is  influenced  by  and 
builds  on  the  Political  Guidelines  for  the 
2024-2029  Commission  and  the  February 
2025 communication on the next MFF. The 
revised  SWD 
the 
further 
connection  between  the  general  objective 
and  the  specific  objectives,  as  well  as  the 
architecture of the options.   

develops 

the  specific  objectives  and 

The revision of the intervention logic should 
better  reflect  the  sub-objectives  outlined 
the 
under 
formulation  of  additional  policy  options 
should  be  adjusted  to  align  with  them,  the 
specific and the general objective. 

is  not 

the  problem 
The  evidence  base  of 
description 
comprehensively 
developed  and  relies  too  heavily  on 
conclusions  from  previous  evaluations 
that  are  not  sufficiently  substantiated  by 
robust  evidence.  The  link  between  the 
problem  definition,  objectives  and  the 
options is neither clear nor complete. 

external 

financing 

following 

The  problem  definition  is  supported  by 
problem  drivers.  The  specific  objectives 
have been developed as a mirror image to the 
problem  drivers, 
the  Better 
Regulation  guidance.  Considering  that  the 
balance between flexibility and predictability 
is the main choice to be made in view of the 
future 
instrument, 
formulating  additional  policy  options  was 
not  considered  meaningful  nor  helpful. 
Additional  options,  and  especially  sub-
options, would have led to more fragmented 
and  scattered  assessment,  deviating  policy 
makers’  attention  from  the  main  issue.  The 
reasoning  related  to  the  choice  of  options, 
and 
and 
of 
predictability, are however further illustrated 
in the revised SWD. 

dimensions 

flexibility 

The 
related  mid-term  evaluation  was 
conducted  at  a  very  early  stage  of  the 
implementation  of  the  current  instruments, 
with the first operational results related to the 
financial execution only available as of 2024. 
study 
However, 
underpinning  this  evaluation,  evidence  was 
based  on  surveys,  hundreds  of  interviews, 
document reviews and case studies as well as 
targeted  stakeholders’  consultations  and  an 
open public consultation.  

independent 

the 

in 

To strengthen the evidence base, the revised 
SWD  further  details  the  results  from  the 
Open  Public  Consultation  and  points  to  the 
experience  coming  from  the  operational 

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
practise  over  the  past  years.  The  evidence 
base  has  also  been  strengthened  by  policy 
reviews, academic articles and stakeholders’ 
policy documents. 

The options offer limited choice to policy 
makers  and  are  not  aligned  with  and  do 
not address all of the problems. The report 
does  not  assess  whether  the  trade-offs 
between  flexibility  and  predictability  on 
the  one  hand,  and  complexity  and 
simplicity of the funding landscape on the 
other  hand,  provide  sufficient  analytical 
dimensions to adequately identify options 
and fully assess their impacts. 

The  options  are  limited  to  three,  so  as  to 
inform  the  key  decisions  on  the  future 
instruments. Breaking them down into more 
detailed  sub-options  risked  distracting  the 
analysis from the fundamental policy choice 
without  bringing  any  added  value.  The 
the  specific 
tested  against 
options  are 
objectives of the impact assessment, guiding 
the  policy  maker  on  the  balance  between 
flexibility and predictability. 

The  full  range  of  measures  and  policy 
options needed to tackle identified problems 
and  achieve 
the  objectives  should  be 
developed. 

The 
the 
report  does  not  analyse 
unintended  consequences  that  can  result 
from  the  intervention,  and  in  particular  if 
they  can  be  adverse  and  entail  costs  for 
various stakeholders 

The options chosen are not analysed through 
the prism of specific policies driving the EU 
external  action.  Also,  the  SWD  does  not 
attempt  to  measure  the  impact  of  EU 
contributions  in  specific  policy  areas.  This 
would  not  be  feasible  in  an  MFF-related 
impact  assessment,  given  that  the  external 
funding instrument is an enabling vehicle for 
the EU to support various policies. 

Annex  3  provides  an  indicative  list  of  the 
preferred  option’s  (option  2)  possible  costs 
and  benefits.  The  annex  builds  on  the 
problem  definition  and  objective-setting  of 
the  impact  assessment.  The  assessment  of 
costs  and  benefits  does  not  extend  beyond 
this  scope.  It  does  not  mean,  however,  that 
the preferred option would not have impacts 
beyond  the  objective-setting  of  the  impact 
assessment  as  far  as  costs  and  benefits  are 
concerned. 

The  report  does  not  sufficiently  describe 
the governance mechanisms 

Governance mechanisms are not in the focus 
of  the  problem  definition  and  the  general 
objective of the impact assessment. 

The  report  does  not  specify  how  the 
Global Europe instrument fits with wider 
objectives of other parts of the next MFF, 

Policy coherence is addressed in the problem 
definition, 
specific 
objectives  and 
the  assessment  of 
economic, social and environmental impacts. 

problem 

drivers, 

in 

60 

 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
particularly  on  the  link  between  internal 
and external policies 

Specific objective 3 has been revised in SWD 
to  further  clarify  the  synergy  with  the 
Competitiveness Fund. 

The  report  is  unclear  what  monitoring 
and evaluations arrangements will be put 
in  place  to  measure  the  achievement  of 
objectives and EU budget impact 

The  new  external  financing  instrument  will 
be  monitored  and  evaluated  through  the 
Performance  Framework  for  the  post-2027 
budget,  which  is  examined  in  a  separate 
impact assessment. 

on 

February 

focusses 
the 

The impact assessment on external financing 
architecture, 
instrument 
following 
2025 
Communication  on  the  next  MFF.  The 
instrument  itself  will  be  enabling  in  nature 
and is expected to cater for in an increasingly 
flexible  manner  various  external  action 
objectives that are listed in the annex of the 
financing 
regulation  on 
instrument.  The  specific  objectives  of  the 
impact  assessment  will 
therefore  not 
constitute the base for operational objectives 
and  indicators.  The  indicators  of  the  future 
instrument  will  focus  on  societal  objectives 
as has been the case until now under NDICI-
Global Europe and IPA III. These indicators 
are  specified 
the  new  Performance 
Framework. 

external 

the 

in 

4.  EVIDENCE, SOURCES AND QUALITY 

The evidence for the impact assessment is based on three main sources:  

- 

the  independent  study  conducted  for  the  mid-term  evaluation  of  the  2021-2027 
financing instruments. In this external study, evidence was gathered, among others, via 
surveys, interviews, document reviews and case studies as well as targeted stakeholder 
consultations  at  headquarters  level  and  an  open  public  consultation  published  on  the 
Have Your Say website.  

- 

the open public consultation (with an end date on 7 May 2025) on the next external 
financing instruments. 

-  The final recommendations of the European Citizens’ Panel on a new European Budget 

fit for our ambitions 

61 

 
 
 
 
 
 
 
 
 
 
 
 
In the context of the independent study i) a review of documentation and analytical data was 
conducted, ii) close to 350 key stakeholders were interviewed, iii) in the OPC, 235 responses 
from  58  countries  were  received  (incl.  43  separately  uploaded  contributions),  iv)  targeted 
consultations with different stakeholder groups were held and v) 67 written EUD contributions 
and 172 responses through two survey exercises were also received. This mix of qualitative 
and  quantitative  methods,  using  both  primary  and  secondary  sources,  provided  a 
comprehensive evidence base. 

The  independent  study  used  a  mixed-methods  approach.  It  relied  on  a  theory  of  change 
focussing on the transition from the previous EFIs to the current ones and four main evaluation 
questions: i) on responsiveness to EU and partner countries’ policy priorities; ii) on efficiency 
and flexibility in programming and delivery (i.e., the processes by which the instruments are 
deployed);  iii)  on  interlinkages  and  EU  added  value;  and  iv)  on  EU’s  leverage  to  achieve 
expected  results.  Multiple  sources  were  systematically  used  to  triangulate  the  information 
collected. 

The  results  of  the  open  public  consultation  for  this  impact  assessment  are  explained  in  a 
separate synopsis report (see annex 2). 

ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT) 

1.  Introduction 

The  Commission  conducted  an  open  public  consultation  to  gather  evidence  for  this  impact 
assessment.  The  open  public  consultation  was  open  from  12  February  to  7  May  2025.  The 
consultation  received  730  responses  from  participants  across  82  countries.  Replies  were 
submitted  by  a  diverse  range  of  stakeholders,  including  EU  citizens,  non-governmental 
organisations, public authorities, business associations and academic institutions. Overall, this 
synopsis report provides a broad overview of the feedback received, offering insights into how 
the EU can adapt its external action financing to pursue its strategic objectives while better 
meeting global challenges. It is worth noting that the survey has no claim to representativeness. 
The views presented in this synopsis report are not the views of the European Commission but 
of stakeholders that participated in this open public consultation.  

2.  Overview of closed-ended questions 

As shown in the following chart, 69.3% of respondents agreed to a large extent that EU external 
funding should help contribute to EU policy objectives for human rights, democracy, and the 
rule  of  law.  Other  areas  that  have  received  significant  support  are,  in  this  order,  the  green 
transition, peace and security, and engagement in fragile contexts. 

62 

 
 
 
 
 
 
 
 
 
 
For the second question on the objectives of EU external funding, 59.4% of replies agreed to a 
large  extent  that  EU  funds  should  contribute  to  further  developing  partnerships  with  third 
countries, notably in Africa, Asia, and Latin America, as well as accelerating the achievement 
of  the  SDGs,  including  through  the  Global  Gateway  strategy.  Providing  humanitarian 
assistance abroad stands as the second preferred option, with half of respondents expressing 
that EU funds should contribute to this objective. 

Moving to the third question, the statement to which most respondents agreed to a large extent 
tackles  the  need  to  strengthen  the  synergy  between  EU  external  funding  and  EU 
internal/national  funding in  the EU’s external  border regions. By  adding  the percentages of 
those  who  expressed  their  agreement  (to  a  large  extent  and  somewhat),  the  statement  that 

63 

 
 
 
 
 
 
 
 
 
 
gathered  more  support  recognises  the  importance  for  the  EU  to  encourage  private  sector 
investments to increase the total funding for development and humanitarian assistance. 

3.  Overview of open-ended questions  

Replies to open-ended questions 

Regarding the open questions where participants could add other priorities as well as further 
comments,  there  was  a  strong  call  for  enhancing  EU  economic  diplomacy  by  supporting 
European  businesses  in  third  markets  and  prioritising  sustainable  development  models. 
Respondents also stressed conflict prevention, peacebuilding, and resilience in fragile contexts 
as  essential  components  of  EU  external  action,  advocating  for  streamlined  administrative 
processes, in particular for non-governmental organisations as well as promoting greater public 
awareness to ensure impactful and accountable international cooperation. 

The  respondents  emphasised  the  importance  of  involving  local  communities,  civil  society 
organisations and small businesses as well as bottom-up approaches in EU-funded projects to 
ensure that initiatives align with the needs and expertise of partner countries at an appropriate 
level. Additionally, protecting and promoting human rights, gender equality, and democracy 
were highlighted as crucial measures  to  support  governance and rule of law, particularly in 
politically challenging environments. Enhancing transparency of external funding mechanisms 
was also mentioned. 

Respondents noted the need to enhance institutional capacity building, which would promote 
better  governance  and  sustainable  development.  There  was  a  call  for  enhancing  the  role  of 
partner  countries  in  EU-funded  projects  and  improving  infrastructure,  particularly  for 
sustainable transportation and water management. 

64 

 
 
 
 
 
 
 
 
 
Participants  stressed  the  importance  of  preserving  dedicated  funding  for  civil  society 
organisations, human rights, and democracy, and highlighted concerns over merging financing 
instruments, which could dilute their effectiveness. There was also a strong call for thematic 
funding  that  would  address  issues  like  inequalities  and  climate  change  while  ensuring  that 
guarantees  and  blending  should  not  divert  attention  from  priority  issues,  nor  increase  the 
indebtedness  of  partner  countries.  The  replies  urged  that  the  increased  EU  investment  in 
external  action  should  be  better  communicated  to  further  gain  public  support.  The  call  for 
strengthened partnerships also extended to cultural and academic exchanges.  

4.  Overview of the issues raised in the position papers per theme 

i. 

Contribution of external funding to support EU strategic interests 

•  Some respondents highlighted that a well-funded external action budget is a means for 
the EU to assert its global leadership. As regards the EU’s strategic interests, others 
pointed out that proper financing of EU external action is also crucial to achieve a more 
secure and prosperous Europe. In some responses, the need to increase investment in 
conflict  prevention  and  peacebuilding  was  particularly  stressed  as  a  strategic  and 
economic necessity also for the EU. 

•  A few respondents recalled that while linking external action with EU competitivity is 
important, it should be done through mutually beneficial partnerships in areas such as 
critical  raw  materials.  Also,  the  political  interests  of  the  EU  should  be  properly 
calibrated with those of partner countries in a meaningful dialogue. 

•  Many respondents emphasised that external funding should not be driven solely by EU 
geopolitical  strategies  and  interests  but  should  also  align  with  national  development 
plans  and  local  aspirations  in  third  countries.  Many  also  stressed  the  importance  of 
supporting  civil  society  organisations,  even  in  countries  that  are  not  perceived  as 
strategic for the EU. 

ii. 

Simplification of external financing instruments 

•  Several  respondents  expressed  concerns  on  a  possible  merge  of  various  external 
financing instruments which in their view would blur the mandates and the distinctions 
of  each  instrument  and  force  priorities  to  compete  as  well  as  reduce  predictability. 
Many  respondents  thus  urged  to  maintain  dedicated  instruments,  including  for  pre-
accession  and  Ukraine’s  reconstruction.  The  importance  of  preserving  a  separate 
instrument and budget line for humanitarian assistance as well as keeping international 
partnerships  under  a dedicated instruments  was also  highlighted. In this context, the 

65 

 
 
 
 
 
 
 
 
 
 
 
 
risks related to the prioritisation of short-term objectives at the expense of long-term 
impacts were emphasised by many. 

•  Respondents also pointed the simplification that already took place under the current 
MFF  and  that,  in  the  next  MFF,  only  some  targeted  improvements  would  be  more 
appropriate instead of a further merge.  

•  A  widespread  consideration  was  that  merging  humanitarian,  development  and 
peacebuilding  interventions  risks  reducing  predictability  and  undermining  the  EUs 
credibility as a reliable partner in fragile and conflict-affected settings. 

•  At  the  same  time,  certain  respondents  supported  a  simpler  architecture  for  external 
action, with a policy-based budget, promoting a financial toolbox covering all funding 
solutions  that European  businesses need, from grants  to  equity to  debt  and advisory 
services. 

•  Many also pointed to the need for a more integrated approach in the EU external action. 
Respondents also recognised that there was a need to establish stronger links to connect 
humanitarian, development and peacebuilding operations in situations of emergency, 
conflicts,  protracted  crisis  or  fragility.  This  was  seen  as  forming  a  basis  for  the  EU 
engagement in these settings, in particular to uphold humanitarian-development-peace 
nexus. 

•  One respondent noted that if funding was merged via a further simplification, it would 
be essential to establish specific earmarking for humanitarian, development and pre-
accession funding and provide for the principles under which reallocations can be made. 

•  Several  respondents  were  of  the  opinion  that  funding  for  Ukraine  should  be  kept 
separate and be additional to the EU’s commitments as regards official development 
aid to the rest of the world.  

iii. 

Flexibility and predictability of the funding of EU external action 

•  The need for increased flexibility to respond to emerging priorities and crises in partner 
countries was highlighted in many responses and position papers. Flexibility was also 
seen  as  important  in  aligning  development  efforts  within  the  humanitarian-
development-peace nexus and with development effectiveness mechanisms, ensuring 
that funding responds to the evolving needs of partner countries. 

66 

 
 
 
 
 
 
  
 
 
  
 
 
  
 
 
•  Several respondents pointed to the need for both predictability and flexibility to ensure 
that  funding  reaches  those  most  in  need  while  maintaining  the  ability  to  respond  to 
emerging  crises.  In  the  replies,  it  was  also  widely  stressed  that  flexibility  needed  to 
complement rather than replace predictability. 

•  Many respondents said that predictable funding and long-term programming is essential 
to support sustainable development and related policy areas in partner countries. These 
respondents  pointed  out  that  predictability  provides  the  stability  needed  for 
implementing  partners  to  plan  and  execute  programmes  with  a  multi-sectoral 
coordination. Some replies further noted that predictability ensures long-term systemic 
reforms, notably to tackle underlying drivers of conflict and insecurity.  

•  A few respondents also underscored that investments with a longer perspective were 
needed  to  create  resilient  systems  in  critical  areas  such  as  health,  social  protection, 
nutrition and food systems. 

•  Predictable  long-term  funding  was  also  seen  as  an  investment  to  support  the  EU 

Preparedness strategy.  

iv. 

Funding modalities 

•  Many respondents emphasised the need for a balanced approach and complementarity 
between funding modalities to maximise impact. The open architecture of the European 
Fund for Sustainable Development Plus needed to be improved, also to ensure that it 
meets the geostrategic needs for the EU. 

•  A respondent pointed to the need to engage deeper in frontier markets as their stability 
was  seen  of  essence  to  the  neighbourhood  countries  and  Europe.  In  this  regard, 
guarantee  instruments  that  adequately  cover  the  risks  of  development  finance 
institutions are essential. 

•  Some  respondents  suggested  involving  Export  Credit  Agencies  to  encourage  EU 

private sector involvement. 

•  One  respondent  suggested  the  possibility  to  use  debt  swaps  in  fragile  and  conflict-

affected states. 

•  Some respondents called for simplified and more flexible funding schemes (including 
simplified calls for proposals), especially  to  encourage the involvement of local  and 
regional governments and other grassroots and community-based actors. 

67 

 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
v. 

Spending targets/ODA and earmarking 

•  Many  respondents  endorsed  spending  targets  in  varying  degrees  for  official 
development  aid  (ODA),  human  development  and  education,  inequalities,  climate, 
biodiversity,  gender,  migration  and  for  funding  to  be  distributed  via  civil  society 
organisations.  

•  While some suggested earmarking as a tool to secure funding for specific policy areas, 

a few respondents warned against its excessive use.  

•  Many contributors shared the view that 50% of the EU’s bilateral official development 
aid should be allocated to least developed countries (LDCs) and fragile and conflict-
affected states in the next MFF. 

• 

Increasing the engagement with civil society organisations was a request made by many 
contributors, notably by supporting funding channels through them. Therefore, some 
participants suggested earmarking 15% of resources for civil society across the future 
instrument. 

vi. 

Global Gateway 

•  Some participants identified the need to bring Global Gateway closer to EU companies, 
including  SMEs,  and  increase  their  understanding  of  how  companies  can  use  the 
instrument.  A  respondent  suggested  establishing  an  EU  Business  Consortium 
Mechanism  to  promote  Global  Gateway  investment  projects,  create  European 
consortiums and competitive full-scale offerings under a Team Europe approach.  

•  Supporting  fair  competition  for  European  industries  globally,  addressing  trade-
distorting  policies  was  mentioned.  In  this  regard,  ensuring  access  to  critical  raw 
materials and technologies for electric vehicles and battery production was noted. 

•  The replies stressed the need to invest adequately in R&I and higher education, in line 
with  Global  Gateway  priorities  to  strengthen  European  competitiveness.  On  the 
partnerships for R&I financed from other European funds, a respondent noted that these 
could be considered as Team Europe initiatives, implemented under Global Gateway, 
with the aim to support the green and digital transition in partner counties.  

•  Most contributions shared the view that the Global Gateway initiative should ensure 
that funding continues to be allocated to conflict-affected and fragile contexts. Some 

68 

 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
pointed out that Global Gateway strategy should ensure the continuity of the current 
commitment to human development. 

• 

In the context of Global Gateway, there were respondents who thought it was critical 
to scale up grant mechanisms, resisting shifts towards loans, guarantees, and private 
sector-led investments.  

•  Some respondents pointed out that implementing Global Gateway would benefit from 
partnering with local and regional governments due to their capacity to localise global 
challenges,  to  raise  citizens’  awareness,  and  to  create  an  enabling  environment  for 
investment.  Moreover,  fostering  cooperation  with  local  and  regional  governments 
would be a step towards implementing the Global Gateway’s 360-degree approach. 

•  The  continuation  of  the  Team  Europe  approach  in  international  cooperation  was 
perceived  by  some  respondents  as  crucial  to  maximise  effectiveness  because  it 
contributes to the reduction of administrative burden. 

vii. 

Fragility 

•  Some respondents wanted to see conflict prevention and peacebuilding as objectives in 
all  external  financing  instruments  of  the  EU.  They  pointed  out  that  this  would 
demonstrate both the commitment of the EU to these principles and its commitment to 
being a reliable partner in times of fragility and conflict.   

•  Some highlighted the need to meaningfully engage with civil society in the design and 
implementation  of  external  action  programming  to  ensure  effectiveness  in  fragile 
contexts. Several voices raised the need to support civil society organisations through 
scaled-up  “people  first”  partnership  models  which  help  meet  the  challenges 
encountered in fragile and conflict settings.  

•  Some replies noted that emergency bridge funds and adaptable programme frameworks 
were essential, especially in fragile contexts to act effectively, also enabling the civil 
society organisations to act.  

•  According to some contributions, it was necessary to recognise the unique role of local 
and regional governments in fragile contexts, maintaining, for instance, open channels 
of communication in a highly polarised political climate and contributing to community 
resilience. 

69 

 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
5.  Stakeholder differentiation 

i. 

Trade unions 

•  Trade  unions  believe  the  EU  should  promote  good  democratic  governance  by 
enhancing  the  promotion  of  social  dialogue.  This  would  entail  building  inclusive 
stakeholder engagement with trade unions supporting capacity building efforts of social 
partners. 

•  They ask the EU to put social fairness and decent work and the core of the next MFF. 
As they see it, the  current  narrative of  a necessary improved  competitiveness  of the 
economy and business development must be brought together with a social narrative. 
Moreover, the green and digital transitions must ensure that transformations are socially 
just.   

•  Trade unions consider that the next MFF must ensure adequately funded external action 
to meet the 0.7% of GNI target for ODA by 2030. They state that the use of EU ODA 
must remain focused on the reduction of poverty and inequalities, promotion of decent 
work and promoting SDGs in partner countries. They also want to see gender equality, 
environmental justice, human rights and democratic values mainstreamed.  

ii. 

Businesses 

•  Companies that participated in the OPC acknowledge the importance of competitive 
European financing to support European companies’ competitiveness in third markets. 
They defend that Global Gateway’s instruments should support the EU’s efforts to meet 
the challenges related to the current uncertain geopolitical landscape. 

•  Adding  new  innovative  mechanisms  to  the  toolbox  is  a  request  made  by  several 
companies. These mechanisms should amplify the scope of Global Gateway projects to 
allow for smaller volume projects with a high impact. 

•  Companies welcome the ambition of the EU to move towards a more focused, simpler 
and more impactful budget. Reducing the administrative burden and developing a more 
integrated European offer with better risk-sharing capabilities between all players are 
two ways to reach this objective. 

•  Some companies think that the next MFF should seek more coherence and a long-term 
vision  so  that  projects  generate  lasting  impacts.  They  ask  Team  Europe  to  fully 
reconsider the conditions, to accelerate and ease access to blending facilities for projects 

70 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
driven by European companies in order to create a more competitive and compelling 
Team Europe offer in terms of scale, flexibility and speed. 

•  Some companies also agree that the use of public-private partnerships should be further 
encouraged, with more technical assistance to support local authorities. They also ask 
to  maintain  a  standalone  framework  programme  for  research,  development  and 
innovation, and put a focus on fostering innovation that has an industrial application. 

iii. 

Development finance institutions 

•  Development  finance  institutions  ask  the  EU  to  maintain  different  instruments  for 
different mandates and objectives. As they see it, the future architecture should keep at 
least 3 separate instruments to address short-term/humanitarian needs, the longer-term 
development/investment agenda and the EU accession one. They believe that a single 
instrument  will  reduce  the  potential  of  EU’s  impact  globally  and  may  bring  more 
bureaucracy.  

•  Reducing  bureaucracy  and  harmonising  procedures  is  another  claim  made  by  these 
institutions.  For  them,  the  continuation  of  a  Team  Europe  approach  in  international 
cooperation is key to maximise effectiveness since this approach also contributes to the 
reduction  of  the  administrative  burden.  Moreover,  they  believe  that  the  EU  should 
leverage the full potential of financial regulations, enabling reliance on Member States’ 
systems and practices for budget implementation, allowing cross-recognition of audits 
and  accounting  practices,  and  simplifying  contracting  templates  and  conditions  to 
ensure uniform application globally.    

•  Some contributors detect a need to build on implementing partners’ track-record with 
private  companies  and  institutional  investors,  as  well  as  their  local  presence,  to 
maximise impact and crowd in further external investments. 

•  A  greater  margin  of  flexibility  should  be  built  into  all  EU  agreements  with 
implementing  partners,  allowing  for  quick  reactions  to  unexpected  events  and 
emergencies. This is especially relevant in fragile contexts, where a more integrated 
and  flexible  programming  and  financial  decision-making  across  all  available 
instruments must be ensured. 

•  Some development institutions express that EU political interest should not overshadow 
mutually agreed objectives with partner countries. Contributors welcome the European 
Commission’s ambition for a simpler, more focused and responsive long-term budget 
that reflects its strategic priorities. However, it is essential that the next generation of 

71 

 
 
 
 
 
 
 
  
 
 
  
 
 
instruments continues to reflect a rights-based approach, the promotion of rule of law, 
good governance and inclusive development, without contradicting partner countries’ 
national development plans.  

•  A more streamlined and integrated approach to international cooperation and external 
action  is  critical,  according  to  some  contributions.  The  combination  of  grants  for 
technical cooperation, blending and guarantees should continue to be used in a balanced 
manner, adequately with the local context and to the sector targeted.   

iv. 

Multilateral organisations 

•  Multilateral  organisations  think  the  EU  should  continue  to  build  on  multilateral 
cooperation and the protection of human rights. In this sense, it is essential to protect 
the financial envelope for external action to remain prosperous, safe and economically 
competitive, recommitting to the 0.7% ODA target, in line with the EU’s multilateral 
and global commitments. 

•  The  next  MFF  can  balance  adaptability  with  structured,  result-focused  programmes 
supported by high-frequency monitoring and crisis cushions. Multilateral organisations 
affirm  that  localising  the  SDGs  agenda,  investing  in  conflict  prevention,  livelihoods 
and basic development is as important for Europe’s security as defence spending and 
significantly less costly. The next MFF is also an opportunity to explore innovative and 
context-specific ways to remain engaged in support of local communities and through 
locally-led CSOs.  

•  To enhance the effectiveness of its external action, multilateral organisations propose 
the EU leveraging its partnerships with key stakeholders, including civil society, the 
private sector, international financial institutions and the UN system. With the private 
sector, the EU could consider developing more blended finance instruments to mobilise 
private capital for sustainable development.  

•  On migration, they ask the EU to maintain and prioritise funding dedicated to bridging 
the  humanitarian-peace-development  nexus  and  addressing  forced  displacement, 
ensuring  adequate  resources  to  support  displaced  individuals  and  the  communities 
hosting them. Investing in climate diplomacy and in educational and training systems 
are also key messages.  

72 

 
 
 
 
 
 
  
  
 
 
 
  
 
 
 
v. 

Public authorities 

•  Local and regional governments (LRGs) ask to be considered as essential stakeholders 
to  deliver  the  EU’s  value-based  offer.  Through  decentralised  cooperation,  European 
LRGs  have the  capacity to  localise global challenges and citizens’ awareness.  From 
their view, the EU needs to further elaborate and provide entry points on how LRGs 
can concretely be a part of the equation to ensure effective territorial development and 
policy coherence.  

• 

In  contexts  where  the  dialogue  is  fragmented  at  the  national  level,  LRGs  remain  in 
charge of humanitarian relief, emergency and disaster risk reduction. That is why they 
propose creating a dedicated programming  for LRGs and their European partners to 
provide ongoing support to populations in urgent need.  

•  LRGs also consider essential to maintain distinct financial channels for urgent crises 

and ongoing geographical and thematic programmes.  

•  They would like the EU to  ensure structured participation  for LRGs by  consistently 
establishing  dedicated  focal  points  in  EU  Delegations  and  developing  innovative 
funding mechanisms which simplify current schemes to be more flexible and accessible 
to LRGs. 

vi. 

NGOs 

• 

If the EU wants to be a credible and reliable partner in the world, NGOs claim that the 
EU  needs  to  deliver  on  its  commitments  by  applying  a  principled  and  inclusive 
approach  to  its  programming.  A  do-no-harm  and  human  security  approach  that 
prioritises  the  dignity,  rights  and  resilience  of  individuals  and  communities  is  also 
essential  to  ensure  that  EU-funded  initiatives  effectively  address  poverty  and 
inequality.  

•  Funding  support  for  Ukraine  should  be  additional  and  kept  separate  from  the  EU 

external action heading, as it should not substitute support to other partners. 

•  According  to  NGOs,  the  EU  must  reject  the  use  of  ODA  for  restrictive  migration 
policies and border management, in line with OECD DAC rules. Additionally, the EU 
should  equally  refrain  from  attaching  migration  management  conditionalities  to  its 
international relations agreements and abide by the International Asylum and Human 
Rights conventions.  

73 

 
 
 
 
 
 
 
 
  
  
 
 
 
 
  
  
•  On democracy and human rights, some NGOs consider relevant to embed democracy 
at the centre of Global Gateway and invest at least 20% of the geographic pillar and at 
least 50% of the thematic pillar to support democracy, human rights and civil society. 
They also propose creating a budget line for democratic openings abroad. 

•  Several NGOs point out that Global Gateway investments should include peacebuilding 

initiatives and prioritise human rights.  

•  On climate, the next MFF should pay particular attention to directing climate adaptation 
finance toward climate-vulnerable, conflict-affected countries because of the low share 
of adaptation finance they currently receive, and the particular challenges posed by the 
interplay between climate, conflict and fragility.  

•  NGOs would like the EU to strengthen safeguards for international cooperation through 
application of stricter “do no harm” criteria, social and human rights safeguards and 
mandatory  environmental  and  climate  impact  assessment  across  all  Team  Europe 
Initiatives and Global Gateway programmes.  

•  NGOs ask to prioritise grant-based financing for biodiversity while leveraging Global 
Gateway to attract private investment in conservation and nature restoration. According 
to  them,  this  will  help  scale  impactful  solutions  for  nature  and  communities  while 
building the technical capacity to de-risk investment in biodiversity and nature-based 
solutions. 

•  When it comes to food security, NGOs propose providing earmarked funding for food 
and  nutrition  security,  prioritising  agroecological  principles,  nutrition  outcome  and 
gender equality in food systems. 

ANNEX 3: WHO IS AFFECTED AND HOW? 

1.  PRACTICAL IMPLICATIONS OF THE INITIATIVE 

The annual report on the implementation of the European Union’s external action instruments96 
outlines  the  key  aspects  of  the  EU’s  financial  support  for  international  partnerships, 
humanitarian aid, foreign policy and enlargement. The accompanying staff working document, 
and  the  results  annexes  of  the  annual  report  give  an  overview  of  different  categories  of 

96 https://international-partnerships.ec.europa.eu/publications-library/2024-annual-report-implementation-european-unions-
external-action-instruments-2023_en 

74 

 
 
 
 
 
 
  
  
  
  
  
 
 
beneficiaries97, based on the indicators of the Global Europe Results Framework98 as well as 
the IPA III results framework99.  

Notably, the report reflects the important support provided by the EU to address the global and 
regional consequences of Russia’s war of aggression against Ukraine, to tackle various other 
global  challenges,  and  to  implement  the  Global  Gateway  strategy.  The  annual  report  also 
indicates how the external financing instruments support the EU’s efforts to implement global 
commitments, notably the United Nations 2030 Agenda and Sustainable Development Goals 
and the Paris Agreement on Climate Change. It presents examples of EU-funded interventions 
in Europe and across the globe that illustrate the EU’s continuing efforts to deliver results.  

As the enabling nature and objectives of the preferred option (either 2 or 3) are comparable to 
those of NDICI-Global Europe and IPA III, the table provides an important indication of the 
possible beneficiaries under the new instrument. Considering the updated toolbox and given 
that the preferred option would allow extending cooperation to the Export Credit Agencies as 
well as direct  support to the EU companies, the  preferred option (either  2 or 3) is  likely  to 
involve more private sector actors, compared to the baseline. 

2.  SUMMARY OF COSTS AND BENEFITS 

This annex provides an indicative list of the preferred option’s possible costs and benefits. The 
annex builds on the problem definition and objective-setting of the impact assessment. This 
means  that  the  focus  is  on  the  preferred  option’s  capacity  to  advance  the  Union’s  strategic 
interests while addressing fragility and crisis situations, and associated costs and benefits. The 
assessment of costs and benefits does not extend beyond this scope. It does not mean, however, 
that the preferred option would not have impacts beyond the objective-setting of this impact 
assessment as far as costs and benefits are concerned.  

This is a qualitative reading of costs and benefits, focussing on intangible factors. The list is 
not based on a quantitative analysis as such analysis would require monetisation of both direct 
costs and direct  benefits.  While the direct  benefits  are quantified to  a certain  degree , these 
benefits have not been monetised. Therefore, the current external financing instruments do not 
provide a stable evidence base for drawing hypotheses to be tested quantitatively in the context 
of the preferred option.  

In addition, when assessing the costs and benefits of the preferred option, it must be taken into 
consideration that the EU support to a partner country can only be seen as a contributing factor 
towards any societal results achieved. For example, the key treaty objective to reduce and in 

97 See in particular the Staff Working document accompanying the annual report and its annex on results: 
https://op.europa.eu/en/publication-detail/-/publication/bfc002cc-bdca-11ef-91ed-01aa75ed71a1 
98 https://capacity4dev.europa.eu/resources/results-indicators/global-europe-results-framework_en 
99 https://commission.europa.eu/strategy-and-policy/eu-budget/performance-and-reporting/programme-performance-
statements/instrument-pre-accession-assistance-ipa-iii-performance_en 

75 

 
 
 
 
 
 
 
 
the long-term eradicate poverty in partner countries provides a highly ambitious agenda. Many 
factors, both internal and external, affect the development of partner countries. An important 
number  of  official  aid  providers  play  an  active  role,  together  with  an  increasing  number  of 
private donors. In addition, it is for the partner countries’ governments to adopt and implement 
the necessary reforms and policies that are the driving force behind achievements. Furthermore, 
the nature of the EU’s external action, i.e. the high number of both objectives and beneficiary 
countries, hampers making quantitative aggregations and generalisations.  

In light of the general objective of this impact assessment, which is ring-fenced to the EU’s 
capacity  to  promote  its  strategic  interests  and  address  fragility  and  crisis  situations,  the 
preferred option’s non-monetised costs and benefits are illustrated in the below table.  For the 
sake of meaningful analysis, the costs and benefits are compared to the baseline. 

I. Overview of costs and benefits – Preferred Option 

Baseline 

Description of costs 

Type of costs 

Comparison 
to the baseline 

Geographisation under NDICI-GE entailed learning and therefore costs to 
the EU as it required a greater involvement of EU delegations. Increased 
geographisation (i.e. regional focus) and the integration of different tools, 
both  programmable  and  non-programmable  under  the  preferred  option 
entails  another,  new  change  which  requires  further  learning  as  well  as 
possible organisational adjustments and may thus come with costs.  

Administrative 
costs 

0 

If success of the preferred option is measured in part or in full through the 
yardstick  of  strategic  interests  and  mutually  beneficial  packages  that 
respond to country-level opportunities, this may risk leading to a perception 
that  the  EU  is  neglecting  environmental  and  social  concerns  in  the  EU’s 
partner countries unless such perception risk is mitigated through effective 
communication. 

and 

- 

Political 
reputational 
costs 

Description of benefits 

Comparison to the baseline 

The  use  of  indicative  financial  allocations  for  regions  can  lead  to  more 
effective use of resources, via flexible planning, thus potentially reducing 
complexity and even administrative costs.   

Predictability  inherent  to  the  preferred  option  facilitates  building  an 
investment  horizon,  thus  contributing  to  long-term  partnerships  and 
economic opportunities.  

Preferred option provides the ability to attract private sector investment as 
the  predictability-flexibility  axis  inherent  to  the  instrument  can  make  it 
easier  to  develop  EFSD+  de-risking  modalities  and  for  companies  and 
investors to plan ahead and invest in long-term projects. The EU’s capacity 
to  cover  financial  risk  would  result  in  a  greater  leverage  effect  and 

++ 

++ 

+ 

76 

 
 
 
 
 
 
 
subsequent positive economic impact in the EU’s partner countries and the 
EU alike.   

The humanitarian-development-peace nexus would be improved 

EU’s  expectation  of  reciprocity  and  promotion  of  its  strategic  interests  – 
such as competitiveness and securing robust value chains for clean energy, 
clean tech and critical raw materials, would be served  

Capacity to react to crises would be improved via increased flexibility 

Regional  approach  would  enable  an  efficient  use  of  the  comprehensive 
toolbox,  including  for  the  scaling  up  of  the  Global  Gateway  offer  and 
engaging in the new Clean Trade and Investment Partnerships  

++ 

++ 

++ 

++ 

EU companies would benefit from an updated and comprehensive toolbox   ++ 

EU  taxpayers  would  benefit  from  a  possibly  lower  administrative  costs 
under single instrument in a form of single support measure and technical 
assistance  under  a  mutually  beneficial  package  (that  may  incorporate 
various components from investments to migration management)  

++ 

Increased ability to channel funds towards key political priorities in external 
action via increased flexibility  

++ 

A  more  integrated  and  comprehensive  approach  and  packages  per 
country/region, enabling better correlation between the type of engagement 
in a specific country  

++ 

3.  RELEVANT SUSTAINABLE DEVELOPMENT GOALS 

The economic, social and environmental impacts of the preferred option have been assessed at 
a high level of aggregation in chapter 6. This section of annex 3 provides further analysis at the 
level of relevant SDGs. The potential positive SDG impacts have been assessed in the light of 
the  problem  definition  and  objectives  of  this  impact  assessment.  Considering  the  enabling 
nature  of  the  preferred  option,  the  positive  SDG  impact  may  however  extend  beyond  the 
objective-setting of the impact assessment. 

Positive SDG impacts of the preferred option 2 

The  preferred  option  would  combine  structural  and  crisis  tools  in  the  same  regional 
envelopes  under  one  instrument.  In  principle,  this  would  allow  for  a  better  alignment  of 
priorities  and  more  synergic  approach  to  partner  countries’  economic,  social  and 
environmental development, with strong potential for positive SDG impacts. 

This alignment of priorities is closely associated with the humanitarian-development-peace 
nexus, which would be significantly facilitated under the preferred option as it could further 
the transition from short-term to long-term interventions, which is important in the context 
of protracted crises. This aspect is relevant for the achievement of several SDGs, including 

77 

 
 
 
 
 
 
 
 
to  ensure equitable access  to  water and sanitation (SDG 6) and to prevent  epidemics and 
strengthen  health  systems  (SDG  3).  In  addition,  and  through  its  synergic  approach,  the 
preferred  option  has  the  potential  to  step  up  progress  on  poverty  reduction  (SDG  1), 
sustainable  food  systems  and  access  to  food  in  vulnerable  situations  (SDG  2)  while 
addressing multidimensional inequalities (SDG 10). 

When  aligned  with  Global  Gateway,  the  predictability-flexibility  axis  inherent  to  the 
preferred  option  would  provide  certainty  for  companies  –  including  through  de-risking 
modalities.  While  such  modalities  already  exist  to  a  certain  extent,  predictability  for 
companies could be further improved, for instance by allowing a wider use of equity, loans 
and  guarantees.  Considering  the  partner  countries’  calls  for  increased  concessional 
financing, the EU’s capacity and readiness to accept and take risk would result in a greater 
leverage  effect  and  subsequent  positive  SDG  impact  in  the  EU’s  partner  countries  – 
especially if EU support continues to be delivered by respecting the highest environmental, 
social  and  governance  standards  with  due  attention  to  transparency.  In  this  respect,  the 
preferred  option  would  have  a  positive  impact  on  SDG  17  for  its  potential  to  mobilise 
additional financial resources for partner countries.  

Global  Gateway’s unique 360-degree  approach to develop  an  enabling ecosystem  around 
investments,  including  skills  and  conducive  regulatory  environment,  would  significantly 
benefit from the multiannual planning safeguarded by the preferred option (especially when 
compared  to  option  1).  In  return,  by  leveraging  the  power  of  a  Team  Europe  approach 
through Global Gateway, the preferred option could facilitate effective delivery of solutions 
to green, digital, transport, health, education and innovation challenges, thus contributing to 
partner countries’ economic, social and environmental development through multiple SDGs, 
including strengthening resilience of supply chains by promoting inclusive and sustainable 
industrialisation (SDG 9) and decent work and economic growth in partner countries (SDG 
8).  

The predictability of the preferred option, when topped up with a revamped toolbox, would 
serve not only the partner countries’ economic, social and environmental development but 
also  the  EU’s  expectation  of  reciprocity  and  promotion  of  its  strategic  interests,  such  as 
competitiveness and securing robust value chains for clean energy, clean tech and associated 
critical  raw  materials.  The  approach  would  contribute  to  the  achievement  of  SDGs  7 
(affordable and clean energy), 8 (decent work and economic growth), 9 (industry, innovation 
and infrastructure), and 13 (climate action) in the EU. This interplay between internal and 
external  policies  could  be  further  strengthened  if  the  external  dimension,  especially  the 
diversification of value chains with partner countries, were reciprocally incorporated in the 
anticipated  Competitiveness  Fund  and  if  the  modalities  and  their  related  rules  were 
harmonised in internal and external financing instruments. 

When duly anchored with the rationale of Global Gateway to ensure local value added in the 
value  chains,  the  preferred  option  and  its  multiannual  perspective  in  the  investments  for 
sustainable and high-quality projects would come with benefits for local  communities. In 
this regard, and when reinforced with mainstreaming of objectives at appropriate level, the 
preferred  option  could  maintain  a  strong  focus  on  human  development,  supporting 
achievement of gender equality and empowerment of all women and girls (SDG 5) as well 
as  extending  equal  access  to  quality  education  (SDG  4).  Mainstreaming  would  ensure 

78 

 
 
 
 
 
 
certainty  for  SDG  outcomes  when  a  robust  monitoring  system  is  put  in  place  with 
internationally comparable indicators.  

The Team Europe approach is now an integral part of the EU external action, central to the 
EU’s international partnerships, be it under Global Gateway, in fragile contexts or through 
multilateral engagement. Given the aim to further develop the Team Europe approach, the 
preferred option would improve policy coherence by allowing the EU and Member States to 
operate in  a more joined-up fashion, especially  by ensuring a better cooperation between 
public and private actors. If resources are deployed coherently and with the right amount of 
predictability, the preferred option would allow the EU and its Member States to increase 
the scale, impact and visibility of the EU external action, thus further contributing to SDG 
17 on partnerships. 

In  principle,  the  preferred  option  enables  supporting  and  contributing  to  all  17  Sustainable 
Development Goals. The future results framework should build on the Global Europe Results 
Framework  (GERF)  and  continue  to  be  aligned  with  the  SDGs.  This  would  allow  to  make 
progress towards a common approach to measuring and communicating the SDG results of the 
EU and its Member States.  

Finally, the current reporting considers the transversal and interlinked nature of SDGs, as one 
single commitment is often connected to several SDGs. Therefore, it is mandatory to report on 
one  single  main  SDG  and,  where  applicable,  up  to  nine  other  SDGs  to  which  a  project 
contributes significantly. With this system, the sum of financial flows related to the main SDG 
will always equal the total amount of financial flows, yet it is possible to report several SDGs 
for one project by using the ‘significant’ SDG field. As a result, a better understanding of the 
interlinkages between SDGs can be obtained. This practice should be continued. 

4. 

IMPACTS OF THE PREFERRED OPTION ON HUMAN RIGHTS100 

One of the Treaty-based general objectives of the EU’ external action (Article 3(5) and Articles 
8 and 21 TEU) is to support and promote democracy, the rule of law and respect for human 
rights. The preferred options would uphold this principle, through dialogue and cooperation 
with partner countries and regions. It aims to apply a human rights-based approach guided by 
the principles of ‘leaving no one behind’, equality and non-discrimination on any grounds. The 
rights-based approach encompasses all human rights, whether civil and political or economic, 
social and cultural in order to integrate human rights principles to all activities supported by 
the EU external action.  

100 Given that this impact assessment underpins an initiative with an external dimension, reference is made to human rights, 
instead of fundamental rights 

79 

 
 
 
 
 
 
 
 
 
 
ANNEX 4: ANALYTICAL METHODS 

This impact assessment is qualitative, and it is based on multi-criteria analysis. The specific 
objectives of the impact assessment (chapter 4) constitute the criteria against which the baseline 
and three options have been assessed, while comparing the options to the baseline (chapter 7). 
Similarly, the specific objectives have been used as a yardstick when assessing the economic, 
social and environmental impacts of the options. 

80 

 
 
 
 
 
 
 
 
 
ANNEX 5: COMPETITIVENESS CHECK 

Price 
competitiveness 

and 

cost 

Positive 

Negative 

Comments 

Not 
applicable/c
annot say 

Cost of input 

x  

Cost of capital, access to 
risk capital 

x 

Cost of labour 

Compliance costs 

Cost of output 

The  instrument  contributes  to  diversified  value 
chains  (examples  include  clean  tech,  renewable 
energy,  critical  raw  materials,  through  Global 
Gateway  and  Clean  Trade  and 
Investment 
Partnerships) 

Cost of capital is reduced through guarantees, grants 
and  blending,  including  by  the  inclusion  of  export 
credit  agencies  as  implementing  partners  for  EU 
guarantees.  These  make  funding  available  for 
situations  where  funding  is  usually  not  accessible 
(challenging market conditions). 

in 

instrument  would 
the  future 
Requirements 
generally  refer  to  existing  standards  that  the  EU 
companies would have to comply with in any case 

No additional compliance costs for EU companies 

No impact on cost of output 

x 

x 

x 

Capacity to innovate 

Positive 

Negative 

Comments 

Not 
applicable/c
annot say 

Capacity to produce and 
bring R&D to the market 

x 

Capacity 
innovation 

for  product 

x 

Capacity 
innovation 

for  process 

x 

Future  instrument  enables  supporting  e.g.  digital, 
health  and  energy 
innovations  (e.g.  vaccines 
development  in  Africa  under  NDICI-GE)  while 
promoting  European  standards  in  global  markets. 
This  is  however  not  the  main  objective  of  the 
instrument. 

Future instrument may support the development of 
product 
in  partner  countries,  with 
potential benefits to the EU. This is however not the 
main objective of the instrument. 

innovation 

Future instrument may support the development of 
industrial  processes  in  partner  countries,  with 
potential benefits to the EU. This is however not the 
main objective of the instrument. 

International 
competitiveness 

Positive 

Negative 

Not 
applicable/c
annot say 

Market  shares  (single 
market) 

x 

Through access to inputs (like renewable energy and 
CRM)  and  better  connectivity,  the  instrument  will 

81 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market  shares  (external 
markets) 

x 

facilitate  EU  companies  to  be  competitive  in  the 
single market 

Presence in the external market through investments 
and improved regulatory environment may facilitate 
better  market  access  for  companies  from  EU  MS. 
Global  Gateway  projects  may  be  implemented  by 
companies from EU MS. 

SME competitiveness 

Positive  

Negative 

Comments 

Not 
applicable  / 
cannot say 

x 

The  impact  is  potentially  positive.  While  nothing 
impedes  EU  SMEs  to  participate  in  the  EU 
interventions, the future instrument does not include 
specific  provisions  for  SMEs.  Presence  in  the 
external market through investments and improved 
regulatory environment may facilitate better market 
access for companies from EU MS. Global Gateway 
projects  may  be  implemented  by  companies  from 
EU MS. 

As part of a new economic foreign policy, the future external financing instrument will 
play  an  important  role  in  improving  the  EU’s  competitiveness  and  complement  the 
interventions financed by the future Competitiveness Fund.  

Global  Gateway  will  continue  to  be  further  embedded  in  the  next  external  financing 
instrument  to  boost  sustainable  development  in  the  Union’s  partner  countries  while 
creating  new  opportunities  for  the  EU’s  private  sector,  thus  boosting  the  Union’s 
competitiveness. Compared to traditional development cooperation, Global Gateway has 
two additional goals with a direct positive impact on the EU private sector (i) strengthening 
EU  economic  resilience  by  building  strategic  autonomy  in  key  sectors  and  developing 
more resilient value chains between the EU and our partner countries (e.g. green hydrogen, 
CRM, semi-conductors, batteries); and (ii) enhancing  the EU’s geostrategic position by 
maintaining  EU  competitiveness  in  globally  contested  sectors/markets  (e.g.  digital, 
railway).  

Under the new instrument, Global Gateway investment packages will be developed across 
the globe in key areas intertwining Europe’s economic interests with those of its partners. 
This  will  be  key  to  improve  the  EU’s  ability  to  diversify  supply  and  value  chains  and 
reduce dependencies. It will allow EU’s partners to develop their societies and economies, 
but also create opportunities for the EU Member States’ private sector to invest and remain 
competitive, whilst ensuring the highest environmental and labour standards, as well as 
sound financial management. 

The instrument will further support the economic convergence with the EU of candidate 
countries  and  potential  candidates.  Funding  through  the  new  instrument  will  accelerate 

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
their early and gradual integration into the Single market, thereby allowing companies to 
integrate in European value chains, and enhancing both investment and trade. As such, the 
enlargement process, to be supported through the new instrument, is an integral part of the 
Union’s competitiveness agenda. 

The impact on SMEs 

The  impact  of  the  next  external  financing  instrument  on  the  EU’s  SMEs  is  potentially 
positive.  

A discussion paper101 provided by the European Entrepreneurs, the Digital SME Alliance, 
Liguris, MIM Solutions and Trade Promotion Europe for the Global Gateway Business 
Advisory Board in 2024 drew attention to both the pros and cons of the Global Gateway 
strategy regarding the involvement of EU SMEs. While the discussion paper considered 
that Global Gateway is helpful in encouraging SMEs to enter new markets as well as for 
creating  partnerships,  the  paper  pointed  out  the  difficulties  related  to  complexity  of 
processes and access to information, SMEs’ own resource constraints, competition with 
larger companies as well as lack of legal certainty and poor institutional environment in 
certain partner countries. 

The updated toolbox of the preferred option tackles these challenges. This will be further 
supported by Global Gateway’s 360-degree approach that will put an increased focus on 
improving the regulatory environment and skills in partner countries, which would in turn 
improve the operational environment for SMEs.  

However,  while  nothing  impedes  EU  SMEs  to  participate  in  the  EU  interventions,  the 
future external financing instrument does not include provisions targeted specifically for 
or at EU SMEs. Considering the multiannual character and many policy objectives that the 
external financing instruments are expected to serve, the new instrument will be enabling 
in nature as far as SMES are concerned. 

101 https://www.european-entrepreneurs.org/wp-content/uploads/2024/04/GG-April-2024-Plenary_SME-
paper_290424.pdf  

83 

 
 
 
 
 
 
 
 
 
ANNEX 6: EU ADDED VALUE 

By  building  on  the  chapter  3  of  the  impact  assessment,  this  annex  provides  additional 
information on the EU added value created through external financing instruments, policy 
by policy. 

1.  Enlargement: an investment in peace, security, stability and prosperity 

The importance and added value of EU enlargement has been amply documented, and EU 
enlargement remains a “geostrategic imperative, an investment in peace, security, stability 
and prosperity”. 

The EU’s support to candidate countries and potential candidates has generated an added 
value through its substantial financial resources, long-term commitment, convening power, 
and  ability  to  pool  and  complement  resources  at  large  scale.  Thanks  to  this  support, 
countries  that  acceded  the  EU  have  experienced  accelerated  growth  and  significant 
changes in their societies and economies. 

Today, this added value is relevant more than ever in light of the geopolitical challenges 
and  the  limited  socio-economic  convergence,  fuelled  also  by  the  constraints  in  the 
administrative capacities of the candidate countries and potential candidates. In addition to 
alignment with the EU acquis, the EU should support the acceleration of the rate of the 
upwards convergence of enlargement partners from the current levels of between 30% and 
50% of the EU average.  

Gradual integration in the Single Market has become an important element in preparing 
enlargement partners ahead of the accession and this requires EU support. Enlargement 
partners  will  not  meet  the  accession  requirements  without  adequate  dedicated  pre-
accession assistance. The new facilities for Ukraine and the Western Balkans, as well as 
the  proposed  facility  for  Moldova,  which  combine  grants  with  loans  linked  to  certain 
conditionalities, showcase the leverage stemming from the EU budget. 

The  EU  needs  to  maintain  the  momentum  of  European  integration,  especially  after  the 
membership applications of Ukraine, Moldova and Georgia. The EU is best placed to have 
a  holistic  and  integrated  approach  on  incentivising  reform  efforts,  which  can  bring 
candidate countries and potential candidates closer to the EU. This includes reforms for 
unlocking the potential of the Single Market, guaranteeing the integrity and security of the 
Schengen  area,  responding  to  crises  and  migration  challenges,  strengthening  the  fight 
against  organised  crime  and  corruption,  fostering  regional  integration  and  resilience, 
transforming societies and economies, promoting environmental sustainability, supporting 
human-centric digital transitions and building administrative capacities of our partners for 
implementing  the  EU  acquis.  This  will  subsequently  benefit  the  whole  EU,  its  future 
growth even more so as an enlarged EU will gain more influence in today’s multi-polar 
world. 

Action at Member States’ level cannot prepare an enlarged Union starting with its single 
market. None of the Member States, even those highly active in the region through their 
own agencies, would be able to mobilise the level of financing required for supporting the 

84 

 
 
 
 
 
 
accession path, ensuring the scale of support, forging multi-level partnerships, unveiling 
the  synergies  and  leveraging  the  whole  EU  toolbox  as  well  as  complementarities  with 
internal/thematic policies. 

2.  Neighbourhood East and South: differentiated and tailor-made support for a 

strengthened Neighbourhood 

Through the European Neighbourhood Policy, the EU combines financial, technical and 
human resources to engage in a mutually beneficial comprehensive cooperation with its 
partners based on common values and dialogue. This approach enables the EU to act with 
a  stronger  voice  in  regional  matters.  A  strengthened  Neighbourhood  partnership  is  a 
strategic imperative for the EU’s growth and influence.  

The  added  value  of  the  EU’s  support  in  the  Neighbourhood  stems  from  its  scale, 
consistency,  predictability  and  capacity  to  coordinate  diverse  policies  allowing  for  a 
comprehensive  approach,  pooling  greater  resources  and  tapping  into  the  whole  EU 
toolbox. The EU can provide a coordinated and sustainable response of the neighbouring 
states to regional challenges like effective migration management, fight against organised 
and serious crime offline as well as online, terrorism and radicalisation as well as conflict 
prevention.  

The  added  value  of  the  EU  in  the  Neighbourhood  region  derives  from  the  established 
framework  of  the  European  Neighbourhood  Policy  (ENP).  The  EU  has  the  necessary 
weight to support the efforts of the Neighbourhood partner countries, providing financial 
assistance and directly supporting reforms aiming at better governance towards sustainable 
growth. Moreover, both Neighbourhood regions are subject to regional spillovers. The EU 
can  support  addressing  some  common  challenges,  while  at  the  same  time  offering 
differentiated  a  tailor-made  support.  Notwithstanding  the  crucial  role  of  the  Member 
States, in particular under the Team Europe approach, the goals of the ENP could not be 
achieved by Member States alone at bilateral level.  

3.  Focus on Middle East, North Africa and the Gulf 

Thirty  years  after  the  launch  of  the  Barcelona  process,  the  Southern  Neighbourhood 
continues to represent an essential partner for the EU, given its geographical, cultural and 
economic  proximity  to  the  EU.  The  EU’s  interest  in  a  stable  and  prosperous  Southern 
Neighbourhood remains at the top of the agenda and, for most of the countries in the region, 
the EU remains their most important partner, in particular in terms of trade and economic 
cooperation. 

At the same time, the Gulf countries have a huge interest and leverage in the region, but 
the  EU  will  need  to  put  all  its  weight  to  strengthen  their  engagement.  Our  expertise, 
investment  capacity  and  the  possibility  to  develop  closer  relations  are  key  factors  of 
interest for the Gulf countries. The EU could build on them to develop mutually beneficial 
partnerships. 

With the withdrawal of the US from the region, the EU has a window of opportunity to 
strengthen its role in the Middle East, North Africa and Gulf. Creating a bridge between 
the regions and finding common ground with partners to our mutual benefit will require 

85 

 
 
 
 
 
 
making  tailored  offers  that  make  use  of  the  entire  EU  toolbox.  These  ‘packages’  will 
require  a  multifaceted  and  integrated  approach  that  acknowledges  the  untapped 
opportunities  for  mutual  economic  gain  and  the  interdependencies  among  the  regional 
challenges. 

4.  International partnerships: a tailored approach based on shared interests to 

advance sustainable development 

The EU and its Member States are the leading provider of Official Development Assistance 
globally,  accounting  for  42%  of  the  total  in  2023,  or  EUR  95.9  billion.  Compared  to 
Member States’ bilateral  development  cooperation,  action at  EU level  brings  the added 
value  of  size  and  leverage.  In  addition,  by  combining  financial  strength  with  that  of 
Member  States,  development  banks  and  development  finance  institutions  in  a  Team 
Europe  approach  also  reduces  duplication  and  enhances  coherence.  The  EU  provides 
coordinated and tailor-made assistance on the ground, thanks to its economic power and 
diplomatic presence, as well as a wide array of tools. 

The EU’s partnerships at country, regional or multilateral level are of key importance to 
foster cooperation in areas of common interest, contributing to sustainable development, 
security  –  including  economic  security  –  and  resilience.  In  addition,  multiannual 
programming  allows  the  EU  to  set  priorities  and  objectives  for  a  long-term  period  to 
address the challenges based on partner countries and EU interests, while only a minority 
of  donors  and  Member  States  are  able  to  commit  to  medium  and  long-term  funding. 
Flexibly adapting multiannual priorities will be equally important.  

Building partnerships is particularly important to ensure that the EU supports ambitious 
climate, biodiversity, environmental, and disaster risk reduction actions globally. If partner 
countries  fail  to  take  effective  climate  mitigation  and  adaptation  actions,  and  do  not 
transition to more circular and resource efficient economies, this will affect both partner 
countries and the EU, including through repercussions on the EU’s own domestic energy 
and  climate  policies,  food  security,  worsening  climate  conditions  in  Europe,  and 
exacerbating conflict threats and displacement in partner countries with direct effects for 
the EU. In 2023 alone, natural disasters were estimated to have caused USD 280 billion in 
damages. The EU is highly vulnerable to these impacts – as Europe is warming at a faster 
rate than the global average. Efforts to limit climate change will help protect EU public 
and  private  investments  and  assets  both  in  the  EU  and  internationally,  including 
infrastructure,  assets,  supply  chains,  and  energy  security.  Supporting  ambitious  climate 
action in EU partner countries will help address the risk of carbon leakage and thereby 
ensuring the competitiveness of EU businesses. It will also help establish new markets for 
EU  cleantech  companies  and  support  the  EU’s  own  green  industrialisation  agenda  and 
policy initiatives such as the new Clean Industrial Deal. 

EU external financing instruments have a clear added value in implementing the external 
dimension of the EU migration policy. Only few Member States have bilateral cooperation 
funds  that  include  migration  cooperation,  and  EU  funds  are  best  placed  to  support  the 
various aspects of the external migration policy, such as partnerships on anti-smuggling or 
legal  migration  that  combine  Member  State  and  EU  contributions.  The  EU  external 
funding can be mobilised rapidly and for all aspects of migration management, including 

86 

 
 
 
 
 
 
mutually beneficial Talent Partnerships with partner countries to stimulate labour mobility 
and skills development, as well as return, readmission and reintegration.  

The EU is also better placed to intervene in complex contexts, as only few Member States 
have  the  capacity  to  operate  a  crisis  response  or  peace-building  facility  comparable  in 
scope.  The  EU  should  support  affected  populations  in  fragile  states  and  conflict  areas, 
adapt  to  their  evolving  settings  and  address  the  multi-faceted  drivers  of  fragility, 
vulnerabilities  and  instability,  including  access  to  basic  services,  ensuring  tailor-made 
Humanitarian-Development-Peace  nexus  approaches.  It  is  also  critical  to  maintain 
engagement in fragile contexts for crises prevention and respond quickly and assertively 
to both emerging and protracted crisis situations. 

5.  Humanitarian  aid:  the  EU’s  commitment  to  address  global  humanitarian 

needs 

Together  with  Member  States,  the  EU  is  one  of  the  leading  humanitarian  aid  donors 
globally. Action at the EU level is needed to address, as much as possible, the gap between 
growing  humanitarian  needs  and  limited  resources  available,  showing  solidarity  with 
people in need. As the EU supports humanitarian action in more than 110 countries, non-
action would mean loss of human life and increased human suffering. Member States often 
look to the EU as a donor to provide assistance in crises where they are not able to intervene 
in a national capacity. 

The EU’s added value relies on the efficiency and effectiveness of operations, thanks to 
swift implementation through a broad network of over 200 humanitarian partners and close 
coordination  with  civil  protection  instruments,  including  for  disaster  prevention, 
adaptation and mitigation of the effects of climate change.  

The  volume  and  flexibility  of  mobilising  financial  resources,  including  drawing  on 
budgetary reserves, are pivotal to ensure a prompt and relevant response to humanitarian 
crises. In addition, the EU has a strong humanitarian emergency response capacity, which 
helps  filling operational  gaps by deploying expertise (e.g. health  expertise for Ebola or 
Mpox outbreaks) and providing common logistics services (e.g. Humanitarian Air Bridge). 
It  also  has  pre-positioned  stockpiles  to  humanitarian  actors,  for  instance  in  support  of 
Ukraine’s demining process and winter preparedness and in support of people affected by 
conflicts  in  Middle  East,  where  the  EU  helped  humanitarian  partners  and  the  Member 
States to transport medicines, medical supplies, shelter, water and sanitation products, and 
educational items.  

The EU’s humanitarian presence in the field allows for granularity in the context analysis, 
supports  and  co-shapes  the  humanitarian  response  with  partner  organisations  and  other 
donors – notably Member States, even in the most politically complex contexts.  

The EU has also established itself as a leader in humanitarian policy and advocacy, able to 
speak and negotiate in different United Nations and other multilateral fora and contexts, to 
ensure compliance with international humanitarian law and humanitarian principles, and 
reduce  restrictions  of  humanitarian  access,  which  continues  to  drive  the  increase  of 
humanitarian needs and cost of humanitarian assistance. 

87 

 
 
 
 
 
 
It  also  plays  a  pioneering  role  in  areas  such  as  innovative  financing,  working  also  in 
partnership  with  Multilateral  Development  Banks  and  private  sector  to  address 
humanitarian needs in protracted crisis and fragile contexts and to explore new ways of 
working  and  bring  in  new  finance.  It  also  helps  deliver  on  the  twin  green  and  digital 
transitions in humanitarian assistance worldwide, for example through humanitarian action 
that  takes  into  account  risks  and  include  preparedness  measures  to  respond  to  possible 
future crises. EU action also aims at reducing the environmental footprint of humanitarian 
aid by mainstreaming environmental considerations across projects and programmes.  

The EU acts as an emergency responder and in major crises, as well as in forgotten crises 
at global scale. Its position and response to a particular crisis often act as an incentive for 
other donors to respond. It plays an important coordinating role, covering the full range of 
humanitarian work from pledging conferences to advocacy.

88