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Wednesday, 22 March 2006 - Brussels OJ edition

14. Revision of the Cotonou Agreement and setting of the amount for the 10th EDF (debate)

  President. The next item is the oral question to the Council by Margrietus van den Berg, on behalf of the Committee on Development, on the revision of the Cotonou Agreement and setting of the amount for the 10th EDF (O-0004/2006 B6-0006/2006).


  Glenys Kinnock (PSE), Deputising for the author. Mr President, I should like to thank the Council for being here for this very important debate in relation to the European Development Fund. As the Council is aware, because of the ongoing debate on the budgetisation of the EDF, no provisions relating to the financial framework were included in the revised Cotonou agreement. However, in Annex 1 it states very clearly that ‘the European Union will maintain its aid efforts at at least the same level as that of the ninth EDF’.

Therefore, in my view, President-in-Office, the ACP countries were misled into believing that they should feel secure about future funding under the tenth EDF. The Commission’s assessment was that for the tenth EDF, EUR 24.948 billion was the appropriate sum. In December, however, the Council in Brussels agreed on EUR 22.682 billion on current prices for the 2008-2013 period.

President-in-Office, I give this history because I think it is relevant to the position adopted by Parliament’s Committee on Development, which is that the Development Committee requires reassurance and clarification before we agree to give our assent to the amended Cotonou agreement.

Past agreements should dictate that both the Council and the Commission should understand that when the Development Committee takes a strong stance, as we have done on the DCCI, we in that committee will maintain a very strong position on our principles. Our principles centre around development, and if they are not addressed, then the Council should understand that we will not give our assent until that is clearly part of the way in which you are operating.

One of our concerns relates to the fact that certain members of the Council say that we should accept that we deduct EUR 0.3 billion for the EU’s 21 overseas countries and territories and that a further EUR 0.9 billion should be deducted to cover administrative costs. Yesterday in committee, the Director-General of DG Development made it very clear that the position that you may have on the OCTs was not shared by the Commission. Will the Council therefore clarify what its position on the OCTs is? As a British Member of this Parliament, I am very well aware of the position of the UK, the last Council Presidency. However, President-in-Office, I would like to know what your position is.

Also, on administrative costs, how can it be sensible for the Commission to pay itself for the administration of its own resources? This cannot make sense and I am sure is not something that you are familiar with in your own administration. Would the Member States – the Council – be prepared to consider giving additional money to cover the costs of the OCTs? These are not unimportant caveats. I am not introducing them in a casual way, because I really want to know exactly from you how it can be the case that you make these decisions which say that you do not want to give us the assurances that the money that you are giving to the ACP for the ACP’s use are funds for those countries to use in a clear and transparent way.

I would also take issue with the assertion that the tenth EDF represents a significant improvement on the ninth EDF. In real terms I would argue that it is nothing more than a stagnation. The Development Committee cannot and will not be duped by what we see as double-speak on this issue.

The ninth EDF included funds left over from the previous EDF: ‘unspent money’. Once this money is added to the ninth EDF, the figures touted by the Council are comparable only in nominal terms. When things are finalised, the tenth EDF will have to be ratified and that presents us with enormous concerns when you consider that 25 Member States will have to be part of this ratification process.

The results of an under-spend in the past have been that we have gone in for all these facilities – water facilities, peace facilities – which have had very limited democratic control. Surely this is a matter of concern for you, President-in-Office?

Our next debate will be on economic partnership agreements and one of the most contentious issues for us, and which we will raise, will be the financing of aid for trade in the economic partnership agreements. Will you clarify, President-in-Office, whether you will be offering additional funds for the EPA negotiations, or whether you expect such funding to come from the ACP’s tenth EDF?

Finally, if the African Union is to be included, how will allowances be made for the fact that many members of the African Union are not ACP countries? Do you expect those countries to benefit from EDF money if the Council decides that you will support the African Union from the tenth EDF?

We are talking about a binding agreement with the ACP, and I trust that the Council will reflect that in the decisions it takes on the tenth EDF.


  Hans Winkler, President-in-Office of the Council.(DE) Mr President, Mrs Kinnock, I shall try to answer your questions as fully as possible. I fear that I shall not be able to answer all of them, partly because negotiations have not yet been concluded in all areas, and because the Council has not yet adopted a position on all these issues. Nevertheless, I hope I can give you some clarification.

I would first like to refer to the agreement of the European Council of December 2005 on the budgetisation of the 10th European Development Fund and on the contribution key for the Member States, a process that was both difficult and drawn-out. You are of course familiar with the agreement reached, which provides for the future development financing of the ACP states not within the general budget, but within the framework of the 10th European Development Fund. You know the figures – the European Council agreed on an amount of EUR 22.6 billion. That is the commitment that the European Union made to the ACP countries when the Cotonou Agreement was revised in February 2005. In this context it is important to mention that as part of that process the ACP countries were given an undertaking that the aid effort would be maintained at the level of the ninth EDF, minus residual appropriations from previous development funds but adjusted for inflation and EU growth and taking account of the impact of enlargement to the ten new Member States. The reason for this is clear: we did not want to reward the inefficiency implied in the non-implementation of appropriations. This was a clear undertaking given to the ACP countries by the European Union. The Commission’s original proposal – and I hope this will answer your question – was for EUR 24.9 billion, and was based in the ninth EDF including residual appropriations from earlier funds. This was therefore right and was in accordance with the commitment made to the ACP countries to correct this Commission proposal. In reality – and I believe that we should also acknowledge this fact – the commitment promised by the EU, that is to say the amount I have already mentioned, represents a considerable real increase in funding compared with the ninth EDF, which as we know has a budget of EUR 13.8 billion. The average annual contribution is increased for all 15 old Member States on the basis of the new contribution key. The 10 new Member States will be taking part in and contributing to an EDF for the first time. This is entirely in accordance with the Council agreement of May 2005 significantly to increase public development aid by the year 2015.

You also asked about the contributions from Bulgaria and Romania. Bulgaria and Romania’s planned accession in 2007 has already been anticipated in the calculation of the total volume of the 10th EDF and the individual contributions of the Member States on which the decision is based. As we know, the new 10th EDF can only start to run as from the beginning of 2008. That means that there will not be any additional funding for the 10th EDF when those countries actually accede to the EU. This is totally in line with procedure followed for earlier rounds of enlargement. The Council has also made available EUR 18 million for the new Cotonou member Timor-Leste from the ninth EDF, in order to cover EU development aid once Timor-Leste becomes an ACP State, and following the ratification of the Cotonou Agreement for 2007. It is a logical consequence of this that Timor-Leste will receive no further support under the budget line for Asia, and as from 2008 will receive aid under the 10th EDF.

The Council is not at present in a position to give any information on the distribution of funds under the 10th EDF, as this will be discussed during the negotiations shortly about to start on the legal bases, that is to say on the finance protocol to the Cotonou Agreement and the internal financial agreements for the 10th EDF. The Austrian Presidency’s objective is to reach agreement with the ACP countries on the finance protocol at the ACP-EU Council of Ministers on 1 and 2 June 2006, in which I shall be taking part.

There is one more point that I need to comment on, since you raised it, Mrs Kinnock, and that is how the overseas countries and territories and administration costs are to be dealt with. These are issues that are still subject to agreement and negotiation.

The Commission proposal on the distribution of funds between the ACP partner countries is currently being discussed between the Commission and the Member States. Support for ACP countries in implementing the regional economic partnership agreements – I think you also asked about that – is expected to come from the funds earmarked for regional cooperation in the 10th EDF. The Council has also provided for support for the African Union to be continued under the 10th EDF.

Time is of the essence. Back in January, during the Commission’s discussions with the Austrian Government, the Commissioner responsible, Louis Michel, pressed for swift action to ensure that the current programme under the ninth EDF flows seamlessly into the 10th EDF at the start of 2008. As Mr Michel explained to us in very dramatic terms, this time there is only half as much time available as the last time, so we need to act very quickly. In order to make sure that happens, in parallel with the negotiations on the 10th EDF that I have already described, the country programming process has also already started. Following the adoption of the European Development Consensus and building on the Paris Declaration efforts are being made to achieve joint country development programmes, which are to include not only the European Commission’s country programmes but also those of the Member States. We welcome this development and will continue to support it.


  Jürgen Schröder, on behalf of the PPE-DE Group. – (DE) Mr President, Mr President-in-Office, I believe that what is at stake here is not so much the distribution of funds, legal issues, programmes and so on, but, unfortunately, the fact that funding has been cut. All of us in this House are watching with concern how the revision of the Cotonou Agreement and the negotiations on the tenth European Development Fund are progressing. The Council has made a firm commitment to make more money available for development aid. This was announced amidst much backslapping at the summits held in July and December 2005. The Commission calculated that the tenth EDF covering the period 2008-2013 would have a budget of just under EUR 25 billion.

I very much regret that contrary to these undertakings the Council has now only been able to agree on an amount of less than EUR 23 billion. Apart from less money being made available, this would mean that with increasing public development aid and a fixed EDF budget, EU development aid would effectively be renationalised. This would represent a backward step in all our efforts to improve coordination of EU development aid. That surely cannot be in our interest.

I do, however, welcome the fact that here in this House we have come up with a cross-party motion for a resolution aimed at resolving this deplorable situation. I call on the Council to stand by its promises and to make available the urgently needed appropriations for EU development aid. A difference of EUR 2 billion is not chicken-feed. We are talking about eliminating poverty, about sustainable development and about gradual integration of the ACP countries into the world economy.

Mr President-in-Office, EUR 2 billion less would be a false economy.


  Marie-Arlette Carlotti, on behalf of the PSE Group. (FR) Mr President, Mr Winkler, with regard to the cooperation between the Union and the ACP countries, several sums have been put on the table: firstly by the Commission, then, in December 2005, by the Council and, in the space of a few weeks, nearly EUR 2.5 billion have disappeared. I want to believe that we are concerned here only with a gross miscalculation.

Fortunately, the Commission has recently made some new proposals, on 17 March, which are marked by two significant advances: firstly, an additional package of almost EUR 1 billion for the tenth EDF, which is designed to take care of the administrative costs and, secondly, an additional package of almost EUR 300 million for the OCTs, which would thus be re-integrated into the EDF as, I might add, they are requesting. I believe that these Commission proposals are along the right lines and represent a first step on the road indicated by Parliament. The fact remains that these proposals are in the hands of the Council from now on and that it is its responsibility to try and come up with something better. It is in fact the word of the European Union and its commitment in the fight against poverty that are at stake.

The word of the Union means the one that is included in Annex 1 to the revised Cotonou Agreement. Admittedly, the wording was deliberately ambiguous since it was a matter of gaining the agreement of our ACP partners on some political points that were disputed and, I might add, disputable. It was not ambiguous, however, to the point of explaining the fanciful calculations of the Council. Let us not make our African partners believe that Europe’s new motto is: ‘promises only bind those who believe in them’.

Promises were in fact made in 2005. Thus, at the European Council in June, the Union and the Member States committed themselves to increasing their official development aid on a regular basis until 2015. At the G8 Summit in July, the European Union also committed itself, together with the other donors, to doubling official aid for Africa by 2010. Will we be able to keep those promises given the shrinking budget proposed by the Council for the tenth EDF? The answer is ‘no’, and the Council cannot claim otherwise.

As for the management and payment procedures for this tenth EDF, I also have cause for concern, but explanations are needed as much from the Council as from the Commission. It is a question, firstly, of the funding of the ‘development’ dimension in the economic partnership agreements currently under negotiation and, secondly, of the new performance criteria set by the Commission in the working document of 13 January for the allocation of EDF funds, criteria that would be added to the traditional ‘needs’ criterion.

I should like to conclude by saying a few words about the budgetisation of the EDF. This Parliament has expressed its support for the budgetisation on several occasions, since it is a question of the democratic control of the budget allocation. I believe that we could include the EDF in the budget while respecting our ACP partners because we need to get away from the intergovernmental practices that give rise to bargaining, with the kind of outcome for the EDF that we saw at the Council in December. Admittedly, this is not the issue that we are concerned with today – everything in its own time – but it should not, for all that, be forgotten about.


  Thierry Cornillet, on behalf of the ALDE Group. (FR) Mr President, it has not escaped Mr Winkler that this resolution is not only a joint resolution, but also a unanimous one. All the parties, irrespective of our political divisions, remind you of your duties.

This is a question of honour for our European Union and a question of respect. It is not a question of making a promise, but rather of making commitments, and it is a question of credibility with regard to our external action. It is as a result not only of the volume, but also of the effectiveness, of aid that credibility is gained.

With your permission, I will make two remarks on this subject. As regards volume, one might think that we are holding a virtual debate here because, between EUR 22 billion and EUR 24 billion, and allowing for the remaining balances and the under-spend, there is little point, when all is said and done, in fighting for EUR 2 billion that might not be spent. It is here that you have a responsibility: one of ensuring that this money is actually spent and, furthermore, one of allocating the largest share possible to large-scale regional projects, in particular. In saying that, I mean ‘region’ in the sense of NEPAD.

The subject of my second remark deeply perplexes me. In actual fact, if we honour our commitments and go from 0.31% to 0.56% of GDP in 2010, that will mean that we will have an extra EUR 50 billion available to spend on official development aid, EUR 25 billion of which – or one annual EDF – will go to Africa alone, in accordance with the commitment we have just made. I am totally perplexed when I come to realise that, where 80% of the funding is concerned, this promise of money will have to be kept by the Member States and not by the Union. When I can already see how the Member States react to having to fund the EDF at a sum of EUR 24 billion over five years, I doubt that they can demonstrate to us their ability to provide funding of EUR 25 billion on an annual, or near annual, basis.

We are therefore in the realms of virtual reality here. I believe that we are in danger of two things happening: that we will make fools of ourselves by announcing very high figures for very little in terms of achievement and, above all, that there will be a boomerang effect on our tax-paying constituents, who are going to wonder how on earth we can put the sums announced to good use.




  Margrete Auken, on behalf of the Verts/ALE Group. (DA) Mr President, the world faces huge challenges: poverty, climate change, serious diseases and armed conflicts. If the Council wishes to demonstrate global responsibility, it must not be stingier and more tight-fisted than the Commission is and make cut-backs of more than EUR 2 billion. We must substantially increase the EU’s overall aid to the world's poorest people so that we can honour our pledges. It is important to remember that the Member States promised to achieve the UN target of increasing aid to 0.7% of EU GDP by 2015 and that it has a medium-term target of increasing it to 0.56% by 2010. Development aid is all well and good, but other things, such as fair trade, are still more important. If, at the same time, the EU maintains its exorbitant agricultural subsidies, continues to protect its own markets and, to top it all, cuts back on development aid, the result will be a deadly cocktail that hits the poorest first and then all of us. It is, then, for the sake of our common future that we must honour the pledges we have given.


  Luisa Morgantini, on behalf of the GUE/NGL Group. – (IT) Mr President, ladies and gentlemen, 2005 was the year of rhetoric about development and the fight against poverty. Under the UK Presidency, in various institutional and multilateral forums – the European Council, the G8 Summit, the Millennium Summit, 5 September 2005 – the European Union undertook to increase financial support to achieve the millennium development goals, including through an increase in development aid.

Not to carry out these undertakings would mean taking a backwards step with regard to all the international undertakings made in recent years for combating poverty – a confirmation that it was all just empty rhetoric. It was a mistake to reduce the 10th EDF, even though the full amount provided under the ninth was not spent. Instead, we ought to have made financial provision for the major structural reforms required of the ACP countries within the framework of the EPA negotiations.

How can anyone believe that these countries – and let us remember that we are talking about countries where most of the poorest peoples in the world live – can succeed in making national and regional macroeconomic reforms without European financial aid? How will they mitigate the social impacts and further reforms that will add to the restrictions already imposed by the reforms required by the international financial institutions? Why should further reductions in tariffs be made, leading to a further reduction in the public funds available, as requested within the framework of the EPA negotiations, if on the European side the Member States are not ready to make any effort to increase support for the state budgets of ACP countries? What sort of partnership is this?

I also believe that there is not much clarity about the EU’s specific undertaking in the +5 development funding process or about the precise extent of development funding within the framework of the EPA negotiations. How can we keep faith with the commitments we have made if we reduce the European development budget? Thinking about the international geopolitical situation as well, I believe that it would be strategically more far-sighted on our part – as the European Union – to now enter into a relationship of mutual political support with the poorest countries, and thus reinforce the EU-ACP partnership.


  Alessandro Battilocchio (NI). – (IT) Mr President, ladies and gentlemen, the European Union, which is the biggest donor worldwide, has a duty to honour the commitments it made on several occasions in 2000 when the millennium goals were defined, and recently in the Council and in the G8 meetings held in 2005.

Mr Winkler, reducing the proposed allocation for the EDF is not a positive signal for our global partners, particularly the ACP countries, at the very moment when it is clear that the millennium goals are very far from being achieved. Each day, globalisation gives rise to new, difficult challenges for developing countries.

As well as the size of the allocation, in order for our funds to be truly effective in the fight against poverty we must focus fully on transparency, consistency with the other policies of the EU, the criterion of performance by beneficiaries and, above all, the full participation of the governments involved and the coordination of various instruments, both at European level and with regard to the development policies put in place individually by the various Member States with a view to slimming down the bureaucracy which still accounts for too large a part of overall expenditure.

It is vital for the Council to agree to allocate the funds needed to comply with the commitments made and for the Commission, partly on the basis of the recommendations received from the Court of Auditors in September 2005, to undertake to put in place a transparent, efficient and effective system for careful management of the funds.


  Rodi Kratsa-Tsagaropoulou (PPE-DE).(EL) Mr President, the question we are debating tonight is very important to the external action of the European Union and to efforts to respond to our political commitment to achieve the Millennium Goals. It is reasonable for us to question if the amount proposed for the 10th Regional Fund is lower than that calculated by the European Commission and to which we committed or is satisfactory in order for us to respond to both goals and needs.

However, it is not just the amount of financing which need concern us. We have often observed problems which need to be addressed directly and which touch on the speed of disbursements and the accumulation of unused appropriations amounting to 11 billion, as you mentioned Mr President-in-Office of the Council.

Moreover, the budgetisation of the European Development Fund will resolve many of the complications and difficulties in the application of successive European regional funds, will help speed up their liquidity flow and will wipe out the existing democratic deficit, which is something the European Parliament has expressed repeatedly.

Similarly Mr President, Mr President-in-Office of the Council, ladies and gentlemen, the financial resources managed by the European Investment Fund are not verified by the Court of Auditors or the European Parliament. Transparency must be improved if information on these financial resources is transmitted; we need a breakdown by type of use and an overall picture of results, of cooperation on applications outstanding and of added value.

We undertook, together with the ACP countries, to implement the Millennium Development Goals and, further to Mr Cornillet's reference to respect for taxpayers, I want to say that we need to value the implementation and control mechanisms both in our institutions and in the beneficiary states. We shall be both more democratic and more consistent in our commitments to European taxpayers and more efficient in the Millennium Goals.


  Karin Scheele (PSE). – (DE) Mr President, finance is at the heart of many debates on development policy. This is all the more so at present, because the negotiations between the European Parliament and the Council on the budgetisation for the next seven years have been very intense. We know that the Commission proposal makes many objectives that have repeatedly been stated and restated unachievable. That applies to totally different areas: exchange programmes for students, maintaining biological diversity, and also of course it applies in particular to development programmes, to programmes for eradicating poverty and to sustainable development programmes.

In this debate on the revision of the Cotonou Agreement we are not looking at the financial perspective, which is currently the subject of such intense debate, because the European Development Fund is not part of the general budget. However, the problems involved are the same. People talk big – and we are no exception – but far too little money is made available. The European Parliament regrets that the Council is setting the agreed total for the tenth EDF below the level calculated by the Commission. The exact figures have already been mentioned several times. The reduction of EUR 2 billion runs counter to the commitments that the Union has entered into in the context of the revision of the Cotonou Agreement, and it ignores all the promises made to substantially increase development aid. We call on the Member States to significantly increase their contributions to the tenth EDF, so that the commitments entered into and the promises made can be honoured.

I am also very happy that it will be a unanimous resolution, because of course that would give a great deal of support for the positions that various Members of this House have expressed here today. I would, however, like once more to declare my support for the amendments before us, which are very much concerned with ensuring how the development aspects of the economic partnership agreements will be financed. Should you finance a ‘development dimension’ by taking money intended for achieving the Millennium Development Goals, or – as we are demanding and as I would also like to see demanded in the resolution – should it be additional money? I would like once again to support the call already made by my colleague Mrs Kinnock that at the time of Romania and Bulgaria’s accession – which is due to take place in the very near future – there should be additional funding for the EDF.


  Hans Winkler, President-in-Office of the Council.(DE) Mr President, ladies and gentlemen, I have listened very carefully and I recognise that this House is unanimous in its view. I would like to say, however, that the Council will of course be adhering to the commitments it has made. I have already said, and this remains my view, that we believe we are very much honouring those commitments to the ACP countries.

The issue of the distribution and allocation of appropriations is also very important, because structural problems also have to be addressed in this context – for example, the issue of residual appropriations has been mentioned. Of course it is in our interest for residual appropriations to remain as low as possible. That requires very careful examination. We will put such an examination in place and we will also revisit it.

The issue of increasing ODA appropriations has also been mentioned. I would like to point out that the Internal Financing Agreement makes provision for the possibility of cofinancing by the Member States to or through the EDF.

A number of references have been made to the issue of economic partnerships. In the context of such partnerships, which we very much see as instruments of development aid, one of our aspirations is to support the ACP countries in fulfilling their potential for economic integration and in increasing competition by building up trade capacity. The ACP regions will also be strengthened by means of their regional political and economic integration and their integration into the global economy. We therefore believe that it is particularly important for the economic partnership agreements to provide support by means of development aid from the tenth EDF.

Lastly, I would like to refer once again to the increase in appropriations associated with Bulgaria and Romania. The Council has fully adhered to the practice adopted up to now and has included Romania and Bulgaria, which will have acceded by then, in its calculations for the appropriations for the tenth EDF in 2008. I regard that procedure as being totally proper and I do not believe that the Council has behaved unfairly.

A great deal of what has been discussed and requested here today is still subject to negotiation. All this is also of course linked with the financial perspective. I would like to stress once again that the Austrian Presidency is willing to exchange views with you on development issues at any time. That is the context in which we have proposed briefing Parliament’s Committee on Development following the forthcoming General Affairs and External Relations Council on 11 April, which will be devoted exclusively to development issues. The date of 24 April has already been informally earmarked for that purpose.


  President. Six motions for resolutions(1) have been submitted pursuant to Rule 108(5) of the Rules of Procedure.

The debate is closed.

The vote will take place on Thursday at 12 noon.


(1) See Minutes.

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