The European Commission presents its external budget for the next programming

The new budget will fund the EU priorities: the fight against poverty and promoting democracy, peace, stability and prosperity.

The range of instruments will support developing countries as well as countries in the European neighbourhood and those that are preparing accession into the EU. The Commission will seek to target its resources where they are most needed, where they will have the highest impact while ensuring more flexibility to be able to react swiftly to unforeseen events. This budget will also enable the EU to further reinforce its role on the global stage and promote its interests and values.

On the new European Neighbourhood and Pre-accession instruments Commissioner for Enlargement and European Neighbourhood Policy Štefan Füle commented: “These new instruments will allow us to respond even better in the future to our partner’s needs and ambitions. Through the new European Neighbourhood Instrument and the Instrument for Pre-accession Assistance, support to our neighbours will become faster and more flexible; allowing for increased differentiation and incentives for best performers. At the same time it will continue to ensure the success of the democratisation process and improve economic and social development in our immediate neighbourhood, and support the reform process in those countries preparing for EU membership. ”

The budget proposals will support the Commission’s new approach - the “Agenda for Change”- to focus EU aid in fewer sectors supporting democracy, human rights and good governance and creating inclusive and sustainable growth.

Under the new principle of “differentiation,” the EU will allocate a greater proportion of funds where aid can have the highest impact: in the regions and countries that are most in need, including in fragile states. Countries that can generate enough resources to ensure their own development will no longer receive bilateral grant aid and will instead benefit from new forms of partnership; they will continue to receive funds through thematic and regional programmes. This will be complemented by different innovative cooperation modalities such as the blending of grants and loans.

One of the major innovations and a key external policy tool is the new Partnership Instrument. It will aim to advance and promote EU interests and to address major global challenges. It will also allow the EU to pursue agendas beyond development cooperation with industrialised countries, emerging economies, and countries where the EU has significant interests.

Background
Today’s texts are the legal proposals to implement the Multiannual Financial Framework presented by the Commission on 29 June 2011, in the area of external action. The package covers the full range of external support under the EU budget and includes: A Joint Communication to the European Parliament and the Council: “Global Europe” and the legislative proposals for nine geographic and thematic instruments accompanied by a common implementing regulation

The total amount proposed for these nine instruments is €96,249.4 million over the period 2014-2020 (current prices).

- Pre-accession instrument (IPA): €14,110 million

- European Neighbourhood Instrument (ENI): €18,182 million

- Development Cooperation Instrument DCI): €23,295 million

- Partnership Instrument (PI): €1,131 million

- Instrument for Stability (IfS): €2,829 million

- European Instrument for Democracy & Human Rights (EIDHR):€1,578 million

- Instrument for Nuclear Safety Cooperation: €631 million

- Instrument for Greenland: €219 million

- European Development Fund (EDF, outside EU Budget): €34,276 million

The package will be transmitted to the European Parliament and the Council and is expected to be adopted in 2012. (For more details on the various instruments, see MEMO/11/878)

The differentiation approach
Differentiation will be applied first in countries covered by DCI and ENI. Under the DCI it is proposed that 17 Upper Middle Income Countries (Argentina, Brazil, Chile, China, Colombia, Costa Rica, Ecuador, Kazakhstan, Iran, Malaysia, Maldives, Mexico, Panama, Peru, Thailand, Venezuela and Uruguay) and 2 large Lower Middle Income Countries whose GDP is larger than 1% of global GDP (India, Indonesia) graduate to new partnerships that are not based on bilateral aid. Emerging economies such as China, Brazil and India, in particular, are currently regarded more as EU partners for addressing global challenges.

The Neighbourhood and Pre-Accession Instruments
In the context of the renewed approach to the European Neighbourhood Policy (ENP), the new ENI Instrument will provide streamlined support to the same 16 partner countries1 as the previous European Neighbourhood and Partnership Instrument (ENPI). In line with the principles of differentiation and “more for more”, the ENI will support the strengthening of relations with partner countries and bring tangible benefits to both the EU and its partners in areas such as democracy and human rights, the rule of law, good governance, sustainable economic and social development and progressive economic integration in the EU single market.

The EU will continue its support to enlargement countries2 through a renewed Instrument for Pre-accession Assistance (IPA), building on the positive experience from the current instrument. IPA will help these countries implement the comprehensive reform strategies needed to prepare for future membership, with emphasis on regional cooperation, implementation of EU laws and standards, capacity to manage the Union’s internal policies upon accession, and delivery of tangible socio-economic benefits in the beneficiary countries. More use will be made of innovative financing arrangements set up with international financial institutions, with EU funds acting as a catalyst for leveraging investment in infrastructure.

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