European cooperation

The European Approaches to Development Cooperation

The development programmes of the European Union address some 150 partner countries, whereby cooperation with the African, Caribbean and Pacific states (ACP states) enjoys a special status. The Community has a wide range of instruments at its disposal, from Financial and Technical Cooperation, to food aid, humanitarian aid in cases of emergency and natural disasters, non-repayable grants for non-governmental organisations, contributions to international organisations and loans extended by the European Investment Bank (EIB).

Financing from two sources: the EDF and the EU budget

Flags. Copyright: bpaThe Community's development cooperation is financed from two distinct sources: the European Development Fund (EDF) and the general EU budget. This twin-track approach has its roots in the history of the community.

Cooperation with the ACP states is financed through the European Development Fund. A small proportion of the EDF monies are also available to the so-called overseas countries and territories that depend constitutionally on four member states of the European Community, but do not form part of Community territory.

The EDF has been established as a separate asset of the EU, is not part of the general EU budget, and is financed separately by member states. The ninth EDF is based on the Cotonou Agreement dated June 2000. The total volume of the Fund for the period 2003 – 2007 was 13.8 billion euros, of which the German share was 23.36 per cent. The volume of the subsequent tenth EDF (for the period 2008 to 2013) is 22.68 billion euros, with Germany's share of 20.5 per cent making it the largest donor. This reduction in the German share is a result of the accession of the twelve new EU member states, which will in future also contribute to the EDF.

In 2007 the member states paid a total of 2.865 billion euros into the Fund.

Development cooperation with all other countries and regions is financed from the general EU budget. Since 1 January 2007 three new financing instruments have been in place for this purpose. They replace a number of older programmes and create clear structures. The new European Neighbourhood and Partnership Instrument (ENPI) is designed to finance the European Neighbourhood Policy with the EU's Mediterranean and Eastern European neighbours. The Development Cooperation Instrument (DCI) finances cooperation with Asia, Latin America, South Africa and other states. The new Instrument for Pre-Accession Assistance (IPA) amalgamates all previous instruments for EU accession.

Food aid, humanitarian aid and grants for the work of non-governmental organisations are also financed from the EU budget.

In 2007 the EU made available through its budget a total of 10.6 billion euros for payments within the framework of external assistance, which also covers Community development cooperation. This accounts for nine per cent of the total budget. In 2007, Germany contributed 19.8 per cent of the total EU budget.

Step-by-step plan for ODA

At the meeting of the EU Council for General Affairs and External Relations in Brussels in May 2005, government representatives agreed on a binding step-by-step plan to raise funds made available for the Official Development Assistance (ODA) of the European Union. In line with this plan, all member states having joined the EU prior to 2002 will earmark 0.7 % of their gross national income for ODA by 2015. A lower rate has been set for more recent members.

Forward-looking cooperation

The EU acts in a variety of ways: regional programmes, country programmes and thematic programmes are planned and financed on the basis of strategy papers. Over and above these, the EU maintains permanent bilateral trading and cooperation agreements with a number of developing countries, and has entered into association agreements with others, with which it cooperates more closely (including the countries of the Mediterranean region). It also works with international organisations such as the World Bank and the United Nations.

Work in the regions

Whether or not development programmes are successful depends on a great many different factors. What is the economic and social situation in the country in question? Do the objectives of the donor state correspond to those of the developing country? Is the programme aligned to the development goals of the partner country? What have we learned from cooperation to date?

For the development cooperation of the European Community, the answers to these questions are laid out in so-called country strategy papers. These analyse how the EC development programmes can fit in with the policies of the partner country, and whether or not they rationally complement the activities of other donors. If the country has a national development strategy, this is taken as the basis. If it has a poverty reduction strategy paper (PRSP), as required by the World Bank and the IMF in conjunction with the extended HIPC initiative, this too is taken into account.

The country strategy papers form the basis for development cooperation between the EC and partner countries. For programmes financed through the European Development Fund (EDF) the country strategy papers cover a period of six years. For other programmes, such as those funded through the Development Cooperation Instrument (DCI), they are valid for seven years. The country strategy papers serve as guidelines and are helpful for monitoring throughout the life of programmes.

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