External action financing instruments

External action financing instruments

The MFF translates the EU's political priorities for the period 2014-2020 into financial terms. It sets annual maximum amounts (ceilings) for EU expenditure as a whole and for the main categories of expenditure (headings) – such as the Global Europe category.

Compared to Member States, the European Union has a small budget, but with a large impact for Europeans and citizens of third countries. The multi-annual framework for 2014-2020 responds to today's concerns and tomorrow's needs. It represents a budget for investment and growth to ease the pressure on Member States' finances, focusing on Europe 2020 priorities, impacts and results and the role of Europe in the world regarding both classic foreign policy and development cooperation. The MFF focuses further on priority funding at the EU level that provides true added value. The overall amount agreed for the period 2014-2020 is €960 billion in commitments (1% of the EU GNI) and €908 billion (0.95% of EU GNI) in payments on 2011 prices. Around €95 billion is allocated to the external relations of the EU, the major part of which is administered by DEVCO.

On 2 December 2013 the Council adopted the regulation on the MFF 2014-2020 after the European Parliament gave its consent to it on 19 November 2013. The funding confirms the earlier political agreement of the European Council in February 2013.

External financing Instruments

 

At a time when the world order is changing rapidly and emerging economies like China, India and Brazil are asserting their influence, Europe must stand together and be an active partner in shaping global change. To enable this, the EU makes use of several instruments that all have their own geographic or thematic focus. The instruments give the EU the chance to further reinforce its role on the global stage and promote its interests and values.

The EU external relations budget helps make Europe count in a world of shifting alliances and emerging new powers. The overall objective for external action is to ensure that the EU is also able to live up to its ambitions in promoting democracy, peace, solidarity, stability and poverty reduction and to help safeguard global public goods.

The EU focuses its work with its external partners on four policy priorities: enlargement, neighbourhood, cooperation with strategic partners and development cooperation.

The Instruments, including the European Development Fund (EDF) although not part of the budget, have the following financial capacity:

 

Instrument

Funds available

Instrument for Pre-accession Assistance

€ 11 699 million

European Neighbourhood Instrument

€ 15 433 million

Development Cooperation Instrument

€ 19 662 million

Partnership Instrument

€ 955 million

Instrument contributing to Stability and Peace

€ 2 339 million

European Instrument for Democracy & Human Rights

€ 1 333 million

Instrument for Nuclear Safety Cooperation

€ 225 million

Instrument for Greenland

€ 217 million

European Development Fund

€ 30 500 million

 

Main characteristics of the Instruments

 
  • A differentiated approach with different forms of cooperation: The EU seeks to target its resources where they are needed most and where they can make the most difference. A more differentiated approach to partnerships and aid allocation driven by the country context is a core principle of the new Instruments. Assistance is allocated on the basis of country needs, capacities, commitments, performance and potential EU impact. Differentiation allows for different forms of cooperation such as blending grants and loans from international and European financing institutions, including the European Investment Bank.

  • Concentration of spending: The EU concentrates external spending to avoid the inefficiencies resulting from sectorial dispersion and aid fragmentation.

  • More flexibility: In a fast-changing world, EU financing instruments have historically been hampered by a lack of flexibility. In order to further increase the EU’s capacity to respond to unforeseen events, new mechanisms have been introduced that allow revising the instruments to increase flexibility.

  • Simplification of rules:Simplified rules and procedures for programming and delivering EU assistance ensure more effective delivery of EU assistance.

  • Greater focus on human rights, democracy and good governance: The EU aims for donor-recipient mutual accountability in allocating and disbursing funds. Overall, EU external instruments will take greater account of human rights, democracy and good governance when it comes to allocating external assistance to partner countries.

  • Joint efforts between Member States and EU Institutions: In line with the Lisbon Treaty, the new instruments foresee more democratic debate on EU external assistance through a stronger involvement of the European Parliament. Improved coordination between the EU and Member States to maximise our impact and visibility is also a key feature of this new set of instruments, notably through joint programming of aid. Under joint programming the EU and its Member States jointly assess the priorities in each partner country to establish a common framework for their development programmes to reduce fragmentation and have better impact on the ground. Better reporting will enhance transparency and ensure proper and continuous information on the way external financial instruments are being implemented.

 

Instrument – More Information

Legal Source – PDF in English

Legal Source – Link to Official Journal / Choose your own language

Instrument for Pre-accession Assistance

IPA

IPA

European Neighbourhood Instrument

ENI

ENI

Development Cooperation Instrument

DCI

DCI

Partnership Instrument

PI

PI

Instrument contributing to Stability and Peace

IcSP

IcSP

European Instrument for Democracy & Human Rights

EIDHR

EIDHR

Instrument for Nuclear Safety Cooperation

INSC

INSC

Instrument for Greenland

IfG

IfG

 

The Regulation laying down Common Rules and Procedures for the Implementation of the EU's external Instruments

 

For those instruments that are part of the EU Budget – all, but the EDF – a single Regulation has been agreed upon. In March 2014, a Regulation establishing the Common Rules and Procedures for the Implementation of the Union's Instruments for External Action (CIR) was adopted. The CIR provides a set of common rules for the EU Instruments for Financing External Action consistent with the Financial Regulation of the Union's budget. It lays down the rules and conditions for the provision by the Union of financial assistance to actions under the Union's Instruments.

 

This horizontal regulation offers new harmonised, simplified and flexible provisions for four geographic instruments (IPA, ENI, DCI and IfG) and four thematic instruments (PI, INSC, EIDHR, IcSP).

 

  • Decision-making procedures have become more flexible, therefore implementing measures will be adopted faster, accelerating the delivery of EU assistance

  • The regulation fine-tunes the rules for the use of budget support, as well as innovative financial tools such as blending of grants and loans.

  • One of the main impacts of the CIR are the new rules on nationality and origin for public procurement and grant award procedures.

The EDF has its own implementation rules, which are similar to those for the instruments that are part of the EU Budget.

TOOLS

  • PRAG

    The Practical Guide explains contracting procedures for EU external aid contracts financed by the EU general budget (Budget) and the 10th European Development Fund (EDF).

    Consult PRAG

  • E-LEARNING

    E-learning course on the Practical Guide. Do you want to know more about EU external action procedures? See our self-learning distance course on contractual procedures.

    e-Learning PRAG

  • PROSPECT

    PROSPECT is the electronic system developed by EuropeAid to facilitate the submission of applications for call for proposals.

    PROSPECT

  • PADOR

    Potential Applicant Data Online Registration database contains information on organisations applying for European Commission grants in the field of external assistance.

    PADOR

  • DEVCO COMPANION

    Delegated Cooperation, Cooperation with partner countries and with international organisations, Co-financing and Management Modes.

    Consult DEVCO-Companion