3/3/2006
Questions and Answers: The “Aid effectiveness Package”

1. What is the “package” about?

In 2005, the European Union committed itself to radically improve the impact of its development cooperation through initiatives for more aid, delivered faster and more effectively, in order to meet the challenges of the Millennium Development Goals (MDGs). The purpose of the “aid effectiveness package” adopted by the Commission today is to translate these commitments into action. For this purpose an action plan containing nine concrete, time-bound deliverables is proposed.

2. What did we promise in 2005?

In the light of limited progress towards the Millennium Development Goals, in particular in sub-Saharan Africa, the EU undertook to reinforce its political lead in development. In June 2005, the European Council decided to increase the Official Development Aid provided by the Member States to an average of 0.56% of GNI by 2010 (which will deliver an extra of approx. €20 billion per year by 2010), and to 0.7% in 2015. In December 2005, the Commission, the European Parliament and the Council signed the first common Development Policy Statement, to increase of the efficiency of its aidthrough coordination and harmonisation between Member States. Also in December, The European Council agreed on an EU Strategy for Africa, to focus more on this continent, which should receive at least 50% of the aid increase.

3. Why do we need these proposals?

At the request of the Council, the Commission proposes ways on how aid can be made more predictable and more effective for recipients and how the substantial commitments on aid volumes by the European Union can be delivered effectively. An important element of these proposals is a common framework for strategic analysis and programming of aid between Member States and the Commission.

The partner countries currently have to deal with different procedures and criteria from donors. This diversity of regulations, added to structural weaknesses of the administrations of the less developed countries, affects the absorption capacity of the recipients.

4. Why does the Commission propose a common framework for the programming of aid with the Member States?

The Commission does not seek new competences. Development is and will remain a competence shared by the Member States and the Community, as it is foreseen in the current Treaties.

But if we want to keep our promises and make a real difference in the fight against poverty, aid must be more effective. This can be reached by better coordination of the needs analysis and funding allocations of the different donors. Based on earlier positive experience with the Commission’s external aid, the Council asked the Commission in November 2004 to develop such a common framework for the whole of the EU.

Key elements of the framework proposed today include:

The harmonisation of procedures between donors

The coordination of policies

Alignment with partner countries’ multi annual programming cycles

The synchronisation of the Member States and the Commission’s multi annual programming processes.

In its communication, the Commission proposes a joint programming exercise in two steps. In the first step, a common needs-analysis of the country could be made. And in a second step, a common response strategy could be defined and initiated.

For the time being, the Commission will apply the new framework and try to elaborate a common needs-analysis with the Member States. If a political momentum appears in a particular country, the drawing-up of a common EU response strategy would be envisaged. The new system will apply in different steps to the ACP countries and to a number of other developing countries for the new programming exercise.

5. Will the EU be able to meet its financial commitments for development?

In 2005, the EU made unprecedented commitments to scale-up its Official Development Aid (ODA) by 2010 of approx. €20 billion per year, a decisive contribution to meeting the Millennium Development Goals and to halving extreme poverty by 2015.

Today, the EU remains on track for its first intermediate target of 0.39% ODA/GNI set for 2006. According to forecasts, the EU could even reach an approximate average of 0.42% ODA/GNI. The EU remains well above the OECD average of 0.26% ODA/GNI.

However, to reach the intermediate target set for 2006, the EU must increase aid-flows in real terms (corrected by economic growth / inflation). Between 2003 and 2004 (latest data available) no real increase could be registered. The collective result of the EU in 2006 will depend on those EU 15 countries which were in 2004 still below the minimum individual threshold fixed at 0.33% ODA/GNI for 2006: Italy, Greece, Austria, Spain, Germany. The collective performance of the EU 10 countries is encouraging and stronger than estimated.

6. Which other activities does the Commission propose in its action plan?

The Donor Atlas: The Commission has revised and updated the Donor Atlas mapping EU assistance globally. Additional volumes with a focus on a particular region will facilitate more specific analysis of EU donor cooperation in a regional context. A first volume on Western Africa is already available.

Complementarity between EU donors: The Commission suggests drafting a strategy for a division of tasks among EU donors in a particular developing country or region. It should be assured that the assistance of different Member States add value to each other instead of e.g. resulting in overlap.

Increasing joint activities - a catalytic role for EU co-financing: The Commission will propose the elements of a co-financing mechanism with a view to develop co-financing activities with Member States by 2010.

Strengthening the EU vision: The Commission will promote shared analysis and debate on development through (a) a network of excellence of development research centres, (b) the organisation of annual “European Development Days” in the form of a summer-university, (c) vocational training programs of development practitioners

Joint Local Arrangements: The Commission suggests to promote flexible joint arrangements on aid harmonisation between EU donors on the level of pilot countries.

Compendia on EU Development Rules and Procedures: For the purpose of transparency, the Commission will produce compendia on programming, procurement, rules governing the relations with NGOs and rules on subsidies.

7. Which Documents were approved today?

The Communication “Delivering more, faster and better” (COM(2006)87). Conceived as an “overarching document”, it lists 9 strategic deliverables and deploys for each of them an operational working agenda for 2006-2007.

The Communication “Financing for Development and Aid Effectiveness” (COM(2006)85). It corresponds to one of the nine deliverables of the package and organises the monitoring of Member States’ performance both in terms of volume and quality of aid.

The Communication “Joint Programming Framework” (COM(2006)88). It corresponds to a second deliverable of the package and paves the way for a future joint Programming of European aid between the European Commission and Member States.

As such, the three documents presented form a “package on aid effectiveness” put forward to Council and Parliament.