EU aid tools
The Cotonou Agreement
The Cotonou Agreement is the most comprehensive partnership agreement between developing countries and the EU. Since 2000, it has been the framework for the EU's relations with 79 countries from Africa, the Caribbean and the Pacific (ACP). In March 2010, the European Commission and the African Caribbean Pacific group have concluded the second revision of the Cotonou Partnership Agreement following a first revision in 2001. ACP-EU cooperation has been adapted to new challenges , such as climate change, food security, regional integration, State fragility and aid effectiveness.
The 2010 consolidated version of the second revision of the Cotonou Agreement is now available . However, the document cannot be used as an official reference, as only the text of the Agreement amending the Partnership Agreement and published in the paper edition of the Official Journal of the European Union is deemed authentic.
The second revision adapts the partnership to changes which have taken place over the last decade, in particular:
· The growing importance of regional integration in ACP countries and in ACP-EU cooperation is reflected. Its role in fostering cooperation and peace and security, in promoting growth and in tackling cross-border challenges is emphasized. In Africa, the continental dimension is also recognized, and the African Union becomes a partner of the EU-ACP relationship.
· Security and fragility: no development can take place without a secure environment. The new agreement highlights the interdependence between security and development and tackles security threats jointly. Attention is paid to peace building and conflict prevention. A comprehensive approach combining diplomacy, security and development cooperation is developed for situations of State fragility.
· Our ACP partners face major challenges if they are to meet the Millennium Development Goals, food security, HIV-AIDS and sustainability of fisheries. The importance of each of these areas for sustainable development, growth and poverty reduction is underlined, and joint approaches for our cooperation are now agreed.
· For the first time, the EU and the ACP recognize the global challenge of climate change as a major subject for their partnership. The parties commit to raising the profile of climate change in their development cooperation, and to support ACP efforts in mitigating and adapting to the effects of climate change.
· The trade chapter of the Agreement reflects the new trade relationship and the expiry of preferences at the end of 2007. It reaffirms the role of the Economic Partnership Agreements to boost economic development and integration into the world economy. The revised Agreement highlights the challenges ACP countries are facing to integrate better into the world economy, in particular the effects of preference erosion. It therefore underlines the importance of trade adaptation strategies and aid for trade.
· More actors in the partnership: the EU has been promoting a broad and inclusive partnership with ACP partners. The new agreement clearly recognizes the role of national parliaments, local authorities, civil society and private sector.
· More impact, more value for money: This second revision is instrumental in putting in practice the internationally agreed aid effectiveness principles, in particular donor coordination. It will also untie EU aid to the ACP countries to reduce transaction costs. For the first time, the role of other EU policies for the development of ACP countries is recognized and the EU commits to enhance the coherence of those policies to this end.
The Cotonou Agreement and Local Government
The relations between the European Union (EU) and the African, Caribbean and Pacific (ACP) states are a particularly important aspect of the EU development cooperation policy and, more widely, of its external action.
From 1975 until 2000 these relations were governed by the regularly adapted and updated Lomé Convention . However, major upheavals on the international stage, socio-economic and political changes in the ACP countries, the spreading of poverty, resulting in instability and potential conflict, all highlighted the need for a re-thinking of cooperation.
The February 2000 expiration of the Lomé Convention provided an ideal opportunity for a thorough review of the future of ACP-EU relations. Against a background of an intensive public debate, based on a Commission Green paper (1996)* and a discussion paper**, negotiations started in September 1998 and were successfully concluded in early February 2000. The new ACP-EU agreement was signed on 23rd of June 2000 in Cotonou, Benin between the European Union and 77 countries from the ACP and was concluded for a twenty-year period from March 2000 to February 2020.
The Cotonou Agreement is a global and exemplary Agreement, introducing radical changes and ambitious objectives while preserving the ' acquis ' of 25 years of ACP-EU cooperation. The overall objective of the Agreement is to reduce and eventually eradicate poverty while contributing to sustainable development and to the gradual integration of ACP countries into the world economy. It is based on five interdependent pillars: an enhanced political dimension; increased participation; a more strategic approach to cooperation focusing on poverty reduction; new economic and trade partnerships; and improved financial cooperation.
Compared with the previous Lomé Conventions, the new framework for cooperation puts much more emphasis on the political dimensions of development and fosters a pluralistic approach to partnership. This, in turn, opens a range of new opportunities to support democratic decentralisation processes as well as the involvement of ACP local government actors. The new Cotonou Agreement indeed promotes: participatory development (Art 2); a multi-actors perspective (Art 6-58); political dialogue (Art 8-9); decentralisation (Art 33); social development (Art 25) and the institutionalisation of decentralised cooperation (Art 70-71).
Alongside the Agreement is a financial protocol. Covering each five-year period, this indicates the total resources that are available to the ACP through the European Development Fund (EDF) and channelled through two instruments:
· Grants to support long-term development (through the national and regional indicative programmes [NIP/RIP], and Intra-ACP fund)
· The Investment Facility.
The Cotonou Agreement provides for a revision clause which foresees that the Agreement is adapted every five years. The 1st revision of the Agreement in June 2005 further clarified the recognition of local government as a distinct and key actor and partner in development cooperation (Art 4) that is eligible for EDF funds (Art 58).
In this new context of development policy and practice, local government are entitled / encouraged to participate in the ACP-EU cooperation processes, such as in: programming (resource allocation); implementation of projects and programmes; evaluation and monitoring; capacity development; access to financial resources; participation in development cooperation, trade and political cooperation. In addition, it calls upon local government to play a key role in the fight against poverty, the effective delivery of social services within the framework of the sector wide approach (SWAP), the promotion of local economic development, and the consolidation of democratic values and practices.
Since 2000, the EC supports local governance in ACP countries in the fields of decentralisation and decentralised cooperation. The community support concentrates in particular on the institutional support for the improvement of the political, judicial and legal framework of the decentralisation process and on the process of capacity building of the central, regional and local levels.
In recognising local government as key development actors, the Agreement provides support in 5 main clusters:
· Institutional development and capacity building : support to the formulation and execution of decentralisation policies; building capacity of local authorities to elaborate and implement development policy and projects; budget support to local government.
· Decentralisation of services : support to the decentralisation of services in the health, education, sanitation or transport sector; building local authority capacity to deliver, manage and maintain services.
· Rural development : capacity building to improve rural government structures’ ability to promote participatory community planning and rural economic development.
· Decentralised cooperation : micro-projects supporting local economic development, urban development, community participation or support to decentralised stakeholders, including local authorities.
· Good governance : institutional support to local authorities, enforcement of decentralisation processes, territorial development.
With all these opportunities, one can say that time has come for local government to be integrated into ACP-EU cooperation processes, much alike what happened with other non-state actors few years ago. The political climate is ripe for such a move. Undoubtedly, there is still a long way to go before this integration will be smoothly and effectively institutionalised. Yet the first building blocks of a partnership with ACP local government have been put in place, including incipient mechanisms for dialogue as well as specific support programmes. Local government themselves are wakening up to the challenge of ‘fighting for their legitimate place’ in ACP-EU cooperation, including through appropriate forms of representation at national, regional and global level.
These opportunities should facilitate local government involvement in the formulation, implementation and review of ACP-EU cooperation strategies and programmes. However in practice, most local government associations have been absent in the negotiation process of the Cotonou Agreement and its recent revision. This is mainly due to their institutional weaknesses and because they lack the structures to defend their interests in the specific framework of ACP-EU cooperation.
On the other hand, local government are responsible for delivering public services at local level, to improve people’s quality of life and contribute to combating poverty. However, most local authorities and their associations do not have the capacity to play this crucial role, and this often impacts negatively on their legitimacy. Because of this and the relatively weak institutional structures of most local governments, local government has to date not engaged effectively in the ACP-EU development dialogue and the implementation of development cooperation measures.
Providing local government with the necessary capacity at ACP as well as at national/regional level, will ensure that local government can be a true partner alongside other state and non-state actors and make a significant contribution to the development agenda, including the reduction of poverty and key international development targets.
Therefore, if properly supported and capacitated, local government can make an important contribution to the key objectives of the Cotonou Agreement as well as other international development goals (such as MDGs). Their added-value mainly resides in their capacity to act as a ‘catalyst’ of local development processes.
The 2010 consolidated version of the 2nd revision of the Cotonou Agreement is available at:
For further information: http://ec.europa.eu/europeaid/where/acp/overvie...
ACP-EU_doc 6 / 040913
European Development Fund (EDF)
Created in 1957 by the Treaty of Rome, and first launched in 1959, the European Development Fund (EDF) is the main instrument for providing Community development aid in the African, Caribbean and Pacific (ACP) countries and the overseas countries and territories (OCTs).
What does it cover?
social and human development,
regional cooperation and integration.
The EDF consists of several instruments :
grants managed by the Commission,
risk capital and loans to the private sector, managed by the European Investment Bank under the Investment Facility,
the FLEX mechanism, aiming at remedying the adverse effects of instability of export earnings
Each EDF is concluded for a period of around five/six years. Since the conclusion of the first partnership convention in 1964, the EDF cycles have generally followed that of the partnership agreements/conventions.
First EDF: 1959-1964
Second EDF: 1964-1970 (Yaoundé I Convention)
Third EDF: 1970-1975 (Yaoundé II Convention)
Fourth EDF: 1975-1980 (Lomé I Convention)
Fifth EDF: 1980-1985 (Lomé II Convention)
Sixth EDF: 1985-1990 (Lomé III Convention)
Seventh EDF: 1990-1995 (Lomé IV Convention)
Eighth EDF: 1995-2000 (Lomé IV Convention and the revised Lomé IV)
Ninth EDF: 2000-2007 (Cotonou Agreement)
Tenth EDF: 2008-2013 (Cotonou Agreement)
Eleventh EDF: 2014-2020 (Cotonou Agreement)
How much money is available?
The 11th EDF has a budget of €31,589 million out of which €29 089 million has been allocated to the ACP countries. This amount for the ACP countries is divided as follows:
€24 365 million to the national and regional indicative programmes,
€3 590 million to intra-ACP and intra-regional cooperation,
€1 134 million to Investment Facility.
The EDF is an extra-budgetary fund , and therefore is funded by the Member States according to a specific contribution key, is subject to its own financial rules and is managed by a specific committee. However, the Commission has repeatedly asked for it to be included in the EU budget , to increase public control of this aid, as well as transparency and effectiveness.
Since 2000, aid is based on a system of rolling programming , which gives the beneficiary countries greater responsibility for determining objectives, strategies and operations and for programme management and selection. Grants are allocated on the basis of an assessment of requirements and performances, following criteria negotiated between the beneficiary countries and the Community.
While some funds of the 11th EDF have been set aside for unforeseen needs (e.g., related to humanitarian and emergency assistance or to FLEX compensations), most are being programmed in a multi-annual framework for 2014-2020. Specific programming guidelines have been elaborated for national and regional programming and for intra-ACP programming. The Commission has adopted country strategy papers, regional strategy papers and an intra-ACP strategy paper.
Multi-annual framework for 2014-2020:
List of Country Strategy Papers: http://ec.europa.eu/europeaid/where/acp/overvie...
List of Regional Strategy Papers: http://ec.europa.eu/europeaid/where/acp/overvie...
Who is eligible for funding?
The entities which are eligible for funding are:
all natural and legal persons from ACP States and EU Member States,
international organisations and all natural and legal persons eligible according to the rules of these organisations,
when the Fund finances an operation implemented as part of a regional initiative: all natural and legal persons from a country participating in such an initiative.
In case of call for proposals and tenders: each of them will specify in related documents the eligibility criteria for that specific call or tender.
For further information: http://ec.europa.eu/europeaid/how/finance/edf_e...
On 13th October 2011 the Commission presented its ‘Agenda for change’ and reform proposals for EU budget support, setting out a more strategic EU approach to reducing poverty, including a more targeted allocation of funding.
The European Union as a whole (Member States plus Commission-managed funds) is the most generous donor of official development aid worldwide. In 2010, it provided €53.8 billion - more than 50% of global aid. The European Commission is responsible for the management of €11 billion of aid per year, putting it in second place among donors globally.
Future EU development aid spending should target countries that are in the greatest need of external support and where it can really make a difference, including fragile states. Cooperation should take different forms for countries which are already experiencing sustained growth or which have sufficient resources of their own.
EU assistance should focus on two priority areas:
Human rights, democracy and other key elements of good governance, and
Inclusive and sustainable growth for human development.
The EU aims to help create growth in developing countries so they have the means to lift themselves out of poverty. Aid will therefore target particular areas:
· social protection, health, education and jobs
· the business environment, regional integration and world markets, and
· Sustainable agriculture and energy.
The EU should also try to further improve the effectiveness of the aid it delivers. This can be done by making sure that Member States and EU Commission jointly prepare their strategies and programmes and divide labour better amongst themselves.
Furthermore, the EU will explore innovative ways of financing development , like the blending of grants and loans. It should also improve the coherence of its internal and external policies: European action in many areas like environment, trade, climate action, etc affects development countries. Here, the overall impact of EU development policy can still be improved.
A significant share of EU aid is delivered in the form of budget support: financial transfers to government budgets in developing countries, coupled with policy dialogue, performance assessment and capacity building. The Commission proposes to make it more effective and efficient in delivering development results by strengthening the contractual partnerships with developing countries.
Background and next steps
In autumn 2010, the European Commission published two Green Papers, one on the future of development policy and the other on the instrument of budget support, in order to debate the way ahead with stakeholders and interested parties. Today's proposals draw on a thorough analysis of the subsequent feedback received from, among others, global partners, governments, NGOs and the private sector.
The proposals come in the form of two Communications:
· Increasing the impact of EU Development Policy: an Agenda for Change
· The future approach to EU budget support to third countries
The main principles of the 12-point Agenda for Change will be progressively reflected in the remainder of the current programming cycles and then in future EU programming. In spring 2012, the Commission will ask EU Development Ministers to endorse the Agenda for Change as well as the new EU budget support approach which seeks to make budget support more effective and efficient in delivering development results and proposes more EU coordination.
For further information: http://ec.europa.eu/europeaid/news/agenda_for_c...
At the beginning of 2007, for the first time, the African Union and the European Union have decided to develop a ‘Joint Strategy’ which reflects the needs and aspirations of the peoples of both Africa and Europe. The purpose of this joint strategy is to develop a common political vision for the future partnership between the EU and Africa, based on mutual respect, common interests and the principle of ownership. The joint Strategy should be adopted at the planned EU-Africa Summit in Lisbon, in late 2007. The new Strategic Partnership between the two continents will be developed in the framework of the positive development on the African continent since the first EU-Africa summit was held in Cairo in 2000 and in particular following the establishment of the African Union in 2002.
Various broad-based public debates were organised throughout the two continents that generated ideas and suggestions from a large diversity of state and non-state actors. The joint strategy that emerges from this process should therefore not just be a strategy for and by officials, but also one to which all stakeholders on both continents can relate, contribute and support in their own work.
For further information: http://www.africa-eu-partnership.org/
The strategy will bring the EU's relationship with the Pacific into line with the new EU development policy statement adopted by the EU institutions in December 2005 and with the revised Cotonou Agreement of 2005. It will also help put into practice the EU's commitments to aid effectiveness in the region.
The strategy consists of three components:
? stronger political relations on matters of common interest such as global political security, trade, economic and social development and the environment;
? more focused development action, with greater emphasis on regional cooperation to build up critical mass, enhance regional governance and facilitate mutual enrichment;
? more efficient aid delivery, including greater use of direct budget support and closer coordination with other partners, in particular Australia and New Zealand.
The thematic programme 'Non-State Actors and Local Authorities in Development' is a development policy instrument of the European Consensus on Development. It took the place of the NGO cofinancing and decentralised cooperation budget lines and has its legal basis in Article 14 of Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation (DCI).
It is an 'actor-oriented' programme offering cofinancing for the own activities of NSAs and LAs and support for capacity-building. The aim is to facilitate their involvement in policy formulation and their capacity to deliver basic services to the poorest sections of the population in developing countries and so help reduce poverty in a context of sustainable development.
The 2011-2013 strategy paper identifies three specific objectives that contribute to the overall objective:
· Objective 1 : Promotion of the principles of inclusivity and independence in partner countries so as to facilitate non-state actor and local authority participation in poverty reduction and sustainable development strategies.
· Objective 2 : Raising public awareness of development issues and promoting education for development in the EU and acceding countries, anchoring development policy in European societies, and mobilising greater public support for action against poverty and fairer relations between developed and developing countries.
· Objective 3 : Support for activities to strengthen coordination and communication activities of NSA and local authority networks in the EU and acceding countries.
Objective 1 interventions will target:
· Country situations not conducive to ensuring non-state actor and local authority involvement in the development process, including difficult partnerships, unstable situations, conflict and poor governance. This programme is an important tool which may help to get participatory approaches accepted and put into practice;
· People out of reach of basic services and resources and excluded from policy-making processes; and
· Multinational and/or multiregional interventions to tackle problems common to more than one region (desertification, migration, etc.) and initiatives to structure NSA and LA networks at regional or international levels.
For Objective 2 , which covers awareness-raising and development education, the focus will be on:
· The Millennium Development Goals, especially in parts of the world lagging behind, above all subSaharan Africa; and
· Areas of public interest where common development-related goals are important, such as migration, trade, fair trade, and so on.
Under Objective 3 , for cooperation activities in Europe, priority will be placed on:
· Institutional coordination between platforms of NSAs and LAs and the European institutions; and
· Capacity-building for European platforms and their members and a stepping-up of multi-stakeholder dialogue.
All non-profit non-state actors and local authorities originating from the EU and partner countries are potentially eligible for funding under this thematic programme, which will take account of the comparative value-added of different stakeholders.
Another feature of the programme is the devolved management to EU delegations where actions are taking place in one country; other programme activities are managed at Commission headquarters.
For further information: http://ec.europa.eu/europeaid/where/worldwide/c...
2013 Annual Action Programme for the NSA-LA programme
2011-2013 NSA-LA Strategy Paper
In March 2006, the European Commission adopted the Communication on the EU strategy for the Caribbean, which serves as the framework for EU - Caribbean relations at the political, economic and developmental level for the future and certainly for the lifetime of the Cotonou Agreement.
The communication builds on and integrates previous Commission documents, most notably the "MDG Package" and the "European Consensus", the European Union's new Development Policy.
The objective of the EU Communication on the Caribbean is to highlight how the challenges facing the Caribbean can be transformed into opportunities by focusing on the right "policy-mix". The EU's Caribbean strategy is articulated around a vision of the future based on a history of shared values, in parallel with full optimisation of the opportunities of the Cotonou Agreement. The EU's overarching development objective is to assist all the countries in the Caribbean region to achieve their long term development goals in a self sustaining manner.
On 15-16 December 2005 the European Council, gathering Heads of States and Governments, endorsed the ‘European Consensus on Development’. It is a joint statement by the Council, the European Parliament and the Commission. It provides, for the first time, a common vision that guides the action of the EU, both at its MemberStates and Community levels, in development co-operation. This common vision is the subject of the first part of the Statement; the second part sets out the European Community Development Policy to guide implementation of this vision at the Community level and further specifies priorities for concrete action at the Community level.
This “European Consensus” defines the new development policy of the European Union. The policy aims at reducing poverty in line with the Millennium Development Goals. The EU’s Development Policy will cover all developing countries, and for the first time in 50 years, this will be done within a single framework of principles for the 25 MemberStates and the Commission.