A general survey of development policy

Development policy lies at the heart of the European Union’s external policies. The EU has gradually enlarged its original focus on the African, Caribbean and Pacific states and now works with some 160 countries worldwide. The primary objective of the EU’s development policy is the eradication of poverty. Additional targets include defending human rights and democracy, promoting gender equality and tackling environmental and climate challenges. It is the world’s largest development donor.

Legal basis

  • Article 21(1) of the Treaty on European Union (TEU): overall mandate and guiding principles in the field of EU development cooperation;
  • Articles 4(4) and 208 to 211 of the Treaty on the Functioning of the European Union (TFEU);
  • Articles 312 to 316 TFEU: budgetary matters;
  • Cotonou Agreement (as regards the African, Caribbean and Pacific (ACP) group of states) and various bilateral association agreements (under Article 217 TFEU): specific cooperation agreements.

Policy and financial framework

a.The 2030 Agenda for Sustainable Development

At the international level, the 2030 agenda (Transforming our World: the 2030 Agenda for Sustainable Development) that was approved in New York in September 2015 establishes the new global framework to help eradicate poverty and achieve sustainable development by 2030. It follows on from the Millennium Development Goals (MDGs) and identifies a new set of 17 Sustainable Development Goals (SDGs) together with 169 associated targets. The 2030 Agenda also integrates the United Nations Addis Ababa Action Agenda adopted in July 2015, which sets out the different means that are needed to implement the 2030 Agenda, and in which the EU recommits to the target of spending 0.7% of its GNI on development aid. The EU participated fully in elaborating the new 2030 agenda and it has committed to advancing this agenda through its internal and external policies. As regards the internal dimension, the Commission published in November 2016 a communication entitled ‘Next steps for a sustainable European future’, which integrates the SDGs into the European policy framework and current Commission priorities. Also in November 2016, the Commission published a communication on the external dimension proposing a new European Consensus on Development, to take into account the changes in the global policy framework and the changing international context.

b.The new European Consensus on Development Policy

On 20 December 2005, the Commission, the Council and Parliament jointly adopted the ‘European Consensus on EU Development Policy’. This policy statement establishes a uniform set of principles and values for development cooperation by EU institutions and Member States. The text identifies core targets for European development policy, such as reducing poverty, in line with the 2000 United Nations Millennium Development Goals (MDGs), and promoting Europe’s democratic values across the globe. The Consensus also assigns developing countries clear responsibilities for their own development. Under the heading ‘Delivering more and better EU aid’, the Union and Member States pledge to increase their ODA spending to 0.7% of gross national income (GNI) by 2015, a deadline which has, however, been missed.

Following a series of intensive inter-institutional discussions, the proposed new European Consensus on Development was signed on 7 June 2017 by the President of the European Parliament, the Prime Minister of Malta on behalf of the Council and the Member States, the President of the European Commission and the Vice-President of the Commission/High Representative of the Union for Foreign Affairs and Security Policy. The new consensus sets out the main principles, and the strategy, for reaching the sustainable development goals, which will guide the development policy of the EU and the Member States over the next 15 years. The new Consensus strongly reaffirms that poverty eradication remains the primary objective of European development policy.

c.The EU’s Agenda for Change

Approved by the EU Council in May 2012, the EU’s Agenda for Change policy document builds on the 2005 Consensus and makes explicit suggestions for increasing the impact of EU development policy. It establishes ‘the promotion of human rights, democracy, the rule of law and good governance’ and ‘inclusive and sustainable growth’ as the two basic pillars of development policy. The text also states that resources should be targeted at ‘countries most in need’, including fragile states and least developed countries (LDCs). A new principle of ‘differentiation’ is introduced to tailor aid volumes and instruments to each country’s specific needs and governmental performance. The Agenda for Change has strongly influenced the preparation of the assistance programmes for the period 2014-2020.

d.Aid effectiveness and policy coherence

European development policy explicitly promotes harmonising policies and better integrating partner countries into financial allocation and planning processes. To do this, the EU adopted a ‘Code of Conduct on the Division of Labour in Development Policy’ in 2007 and an ‘Operational Framework on Aid Effectiveness’ in 2011. These efforts are consistent with international actions responding to the OECD’s Paris Declaration of 2005, which promotes ‘ownership, harmonisation, alignment, results and mutual accountability’ in development aid. The international framework for aid effectiveness has been revised twice, in the Accra Agenda for Action (2008) and the Busan Partnership for Effective Development Cooperation (2011). Both revisions were strongly supported by the EU. The first high-level meeting of the Global Partnership for Effective Development Cooperation took place in Mexico in April 2014 with the aim of placing development effectiveness at the centre of the post-2015 agenda. The second high-level meeting took place in Nairobi in Kenya at the end of November 2016.

In 2005 the EU also adopted the ‘Policy Coherence for Development’ (PCD) programme, which applied to 12 different policy areas, and was later regrouped in five key areas: (1) Trade and Finance, (2) Addressing climate change, (3) Ensuring global food security, (4) Making migration work for development, and (5) Strengthening the links and synergies between security and development in the context of a global peace building agenda. A biennial Commission report tracks the EU’s progress in the area of PCD; the most recent was published in August 2015. Parliament frequently deliberates on this topic and has a dedicated standing rapporteur for PCD.

e.Legislative and financial framework

The EU’s financing instruments for external action have been substantially revised and streamlined in recent years. For its 2007-2013 multiannual financial framework (MFF), the EU replaced 30 programmes and 90 budget lines with eight development instruments. For the 2014-2020 MFF, these instruments have been only slightly modified in terms of structure — a new Partnership Instrument (PI) has been created (see Table 1 below) — but there have been changes to make cooperation more differentiated and more effective, simple and flexible.

f.Main financing instruments for external action

Table 1: Overview of the EU’s external action financing instruments (MFF 2014-2020)

Instrument Focus Format Budget
Development Cooperation Instrument (DCI) Latin America, Asia, Central Asia, Gulf region, South Africa + global thematic support Geographic + Thematic EUR 19.7 billion
European Neighbourhood Instrument (ENI) Sixteen European Neighbourhood countries, Russia (regional and cross-border cooperation) Geographic EUR 15.4 billion
Instrument for Pre-Accession (IPA) Balkans and Turkey Geographic EUR 11.7 billion
Partnership Instrument (PI) Industrialised countries Geographic EUR 955 million
Instrument for Greenland Greenland Geographic EUR 184 million
European Instrument for Democracy and Human Rights (EIDHR) Democracy and human rights promotion Thematic EUR 1.3 billion
Instrument contributing to Stability and Peace (IfSP) Political stability and peace-building Thematic EUR 2.3 billion
Instrument for Nuclear Safety Cooperation (INSC) Nuclear safety Thematic EUR 225 million
Off-budget      
European Development Fund (EDF) ACP and Overseas Countries and Territories (OCTs) Geographic EUR 29.1 billion

Of these instruments, two are particularly important for development cooperation in terms of their size and focus:

The Development Cooperation Instrument (DCI) is the largest development funding source within the EU budget, covering development cooperation with Latin America, selected countries in the Middle East, South Africa and Central, East, South and South-East Asia. The DCI also has two thematic programmes covering all developing countries: the EUR 5.1 billion Global Public Goods and Challenges (GPGC) programme, and the EUR 1.9 billion Civil Society Organisations and Local Authorities (CSO-LA) programme. One of the most important innovations of the DCI for 2014-2020 has been the introduction of a ‘differentiation’ principle. A total of 16 middle-income countries (MICs) are no longer eligible for grant-based bilateral EU funding, although they may continue to be covered by regional and thematic cooperation. As a result of negotiations between the Council and Parliament, five MICs (Cuba, Colombia, Ecuador, Peru and South Africa) are considered ‘exceptional cases’ and remain eligible for cooperation. Turkmenistan and Iraq, which have graduated to become upper middle income countries, also continue to receive bilateral aid on an exceptional basis.

The European Development Fund (EDF) — not part of the EU budget — is the EU’s oldest and largest development instrument. It covers cooperation with the ACP states and the Union’s Overseas Countries and Territories (OCTs); its key areas are economic development, social and human development, and regional cooperation and integration. The 11th EDF has a budget of EUR 29.1 billion, including EUR 24.3 billion for national and regional cooperation, EUR 3.6 billion for intra-ACP cooperation and EUR 1.1 billion for the ACP Investment Facility. Funds are allocated on the basis of a ‘rolling programming’ system, in which partner countries are involved in determining cooperation priorities and projects.

Including the EDF (or its successor) in the EU budget would lead to improved policy coherence and would also make the EDF subject to a different approval process, namely codecision, requiring the approval of Parliament and thereby improving democratic scrutiny (see below for more information on the role of Parliament). On the other hand, such ‘budgetisation’ would add administrative steps to the disbursement of funds, possibly jeopardising the long-standing ACP-EU co-management arrangements for development funds and leading to a reduction in Member States’ allocations to the EDF.

Role of the European Parliament

  • Legal framework. In legal terms, Article 209 TFEU states that Parliament and the Council, ‘acting in accordance with the ordinary legislative procedure, shall adopt the measures necessary for the implementation of development cooperation policy’. This places both institutions on an equal footing, making development one of the very few foreign policy areas in which Parliament holds such powers. The negotiation of the regulation of the EU’s external financing instruments, notably the DCI, has underscored the importance of Parliament’s work as co-legislator and has led to the creation of new mechanisms to enhance parliamentary scrutiny. In 2014, for the first time, the Commission and Parliament’s Development Committee have held a strategic dialogue, allowing Parliament to participate in the decision-making process for DCI programming documents.
  • Parliamentary scrutiny over policy implementation. Parliament has historically exercised relatively little control over the implementation of development policy. However, it has obtained the right to question the Commission and even object to implementing decisions whenever it finds that proposals promote causes other than development (e.g. trade, fighting terrorism, etc.) and if it considers that the Commission is exceeding its jurisdiction. Parliament also exerts control by regularly discussing policies with the Commission, in both formal and informal settings. Control over the EDF is exercised through a process of political scrutiny over EDF programming documents by the EP Development Committee and via the ACP-EU Joint Parliamentary Assembly (JPA).
  • Budgetary authority. The Treaty of Lisbon establishes Parliament and the Council as the joint budgetary authority of the Union. For the seven-year MFF, the Council retains the primary power of decision, but requires parliamentary consent to adopt the framework (Article 312 TFEU). For the annual budget, Article 314 TFEU lays down a procedure that includes one reading each by Parliament and the Council. Once these readings are concluded, Parliament can approve or reject the budget. In the field of international cooperation, Parliament’s Development Committee follows budgetary deliberations and makes concrete suggestions concerning the budget lines falling within its remit. However, Parliament has no formal budgetary powers over the EDF, as the overall amount and distribution are negotiated at intergovernmental level between the Council and the Commission, with only advisory input from Parliament. In addition, Parliament has the right to grant discharge to the Commission, both with regard to the EU budget and the EDF.

Valérie Ramet

06/2017