The ENP is designed to prevent the emergence of new dividing lines between the enlarged EU and its neighbours, and to offer them the chance to participate in various EU activities, through greater political, security, economic and cultural co-operation.

This ambitious policy initiative, launched in 2003, provides the prospect of gradually going beyond traditional relations of trade and co-operation towards closer integration between the EU and its neighbours. On the economic front, the ENP offers neighbouring countries enhanced preferential trade relations, a stake in the EU internal market, improved interconnection with the Union (such as in energy, transport and telecoms), the possibility of participating in some EU programmes, and increased financial and technical assistance.

Following the outbreak of the Arab Spring in early 2011 the ENP has been revised to fully support freedom, democracy and sustainable economic growth in the transition countries of the Southern Neighbourhood.

Benefits of the ENP

The economic benefits of the ENP are potentially considerable. Greater legislative and regulatory convergence with the EU, particularly in those areas important for improved market access, should lead to higher investment and growth, especially if accompanied by greater liberalisation of trade in services and agricultural products.

Compared to the existing framework agreements between the EU and its neighbours, the ENP promises a greater catalytic role for structural reforms and sound macroeconomic policies, but actual progress will continue to depend on those countries' domestic commitment to reform.

For the successful implementation of the ENP, participating neighbouring countries will need to ensure that commitments made under the policy are supportive of their national development strategies and consistent with their institutional and technical capacity, while the EU will have to guarantee the integrity and proper functioning of its internal market.

The renewed ENP adopted on 24 May 2011 by High Representative Catherine Ashton and the European Commission, builds on the achievements of the ENP launched in May 2004, and responds to the aspirations of people for more democracy and prosperity. It offers new types of support for more sections of society, and introduces more incentives to pursue reform.

ENP action plans

Action Plans by the EU's partner countries are at the core of the ENP. These Action Plans (AP) are political documents that lay out the strategic objectives of the co-operation between the neighbourhood countries and the EU. APs set out a comprehensive list of jointly agreed priorities to be implemented by the neighbourhood country and the EU. Fostering economic growth by improving the conditions for sustained investment and productivity gains is a major priority. Other growth-enhancing policy objectives included in APs are:

• Achieve and maintain macroeconomic stability through prudent monetary and fiscal policies;
• Develop the framework for financial services to improve access to finance, insurance and other financial services important for enterprises;
• Address administrative, legislative and regulatory obstacles to the creation and development of firms;
• Ensure the security of property rights, contract enforcement and investor protection;
• Improve competition policy;
• Continue trade liberalisation;
• Remove restrictions on capital flows;
• Undertake institutional and judiciary reforms, including capacity enhancement;
• Support research and development, and improve the quality of education; and
• Combat corruption.

DG ECFIN contributes to the ENP by:

• monitoring and analysing economic and financial developments in the ENP countries;
• leading the EU-ENP countries in regular economic dialogues;
• providing Macro-Financial Assistance, which is an emergency instrument to deliver temporary Balance of Payment support in close coordination with the IMF.

The ENP was first outlined in a Commission Communication on ‘Wider Europe’ in March 2003, followed by a more developed Strategy Paper published in May 2004, which sets out in concrete terms how the EU proposes to work more closely with these countries. In its implementation report, in December 2006, the Commission also made proposals on how the policy could be strengthened. In the ENP Communication from May 2011 'The new response to a changing Neighbourhood' [308 KB] , the Commission, together with the EU High Representative, set out the main priorities and directions of a revitalised ENP strategy which seeks to strengthen individual and regional relationships between the EU and countries in its neighbourhood through a ‘more funds for more reform’ approach - making more additional funds available, but with more mutual accountability. In addition, the European Council agreed to the proposal to increase European Investment Bank lending to the Southern Mediterranean by 1 billion euros over the same period. The European Bank for Reconstruction and Development backed the request of the EU High Representative to extend their operations into the MENA region, starting with Egypt. The expectation is that annual lending volumes could reach around 2.5 billion euros a year by 2013.

The ENP is further supported by regional forms of cooperation such as the Eastern Partnership, the Union for the Mediterranean and the Black Sea Synergy.

The European Neighbourhood Policy applies to the EU's immediate neighbours by land or sea – Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the Palestinian Authority, Syria, Tunisia and Ukraine. Although Russia is also a neighbour, EU-Russia relations are covered by a separate strategic partnership.