Major objectives of EU external action Promote EU values

1. Multiannual Financial Framework 2014-2020New Development Cooperation Instrument11th European Development Fund

2. Multiannual budget = 5 headings for 7 years:(1) Smart and Inclusive Growth; (2) Sustainable Growth: natural resources; (3) Security & citizenship; (4) Global Europe; (5) Administration 70Regulations to be adopted by Council & EP Timing of negotiations Before end 2012: financial volumes Before end 2013: adoption of Regulations

3. Major objectives of EU external action Promote EU values Invest in EU’s Neighbourhood and underpin our commitment to Enlargement Support EU interests abroad Enhance external projection of internal policies to better address global challenges Contribute to the eradication of poverty Demonstrate solidarity with people facing disasters Strengthen international security

4. Responding to a new context Structure / instruments mainly continue from current MFF But adapted to changing world & changing EU New opportunities of the Lisbon Treaty & the EEAS New Partnership Instrument to promote EU interests Common implementing regulation to streamline & simplify implementing rules for all instruments

5. Increasing the efficiency and impactof external spending Greater strategic focus (differentiated approach) Improve the architecture of instruments Increase flexibility Simplify multiannual programming Reduce dispersion of activities Promote Aid effectiveness

6. Budget per instruments (in current prices) Pre-accession instrument 14,110 M€ European Neighbourhood Instrument 18,182 M€ Development Cooperation Instrument 23,295 M€ Partnership Instrument 1,131 M€ Instrument for Stability 2,829 M€ European Instrument for Democracy &Human Rights 1,578 M€ Instrument for Nuclear Safety Cooperation 631 M€ Instrument for Greenland 219 M€ European Development Fund (outside Budget) 34,276 M€ TOTAL 96,251 M€ 6

7. Main innovations “Global Europe”(Heading IV), DCI & EDF

8. Differentiation Target resources where they have greatest impact Under DCI: 19 countries able to generate significant own resources will be graduated from bilateral assistance Those countries are still eligible for regional cooperation & thematic programmes Criteria forallocation of funds: partner countries' needs, capacities, commitments & performance, & potential EU impact

9. Concentration Avoid sectoral fragmentation Higher impact of EU aid by concentrating resources on a limited number of sectors Under DCI: Maximum of 3 sectors per country for geographic programmes Common areas of cooperation established in accordance with the Agenda for Change

10. A more flexible programming process More coherence & aid effectiveness: alignment to partner countries & joint programming Under DCI: CSPs are not mandatory when alignment with national development plans CSPs may be replaced by Joint Framework Documents More flexible programming process for countries in fragile, crisis & post-crisis situations

11. Mutual accountability in allocating& disbursing funds • Human rights, democracy & good governance • Enlargement & neighbouring countries: assistance more closely linked to progress in implementing reforms • Developing countries: mutual accountability in respect of commitments & the fulfilment of objectives as agreed

12. Blending of grants & loans • EU member states' public funds are heavily constrained • Combine grants with additional flows (such as loans and risk capital) to gain financial & qualitative leverage & increase EU development policy impact • Allows to finance large infrastructure projects which would otherwise be too costly for single donors

13. Simplified rules • Reduction of administrative burden • Harmonisation through a horizontal legislative instrument (Common Implementing Regulation) Stronger involvementof the EP • Use of delegated acts • Improved democratic scrutiny over the European Development Fund

14. DCI: Objectives, scope and structure • DCI adapted to changing world & new EU policies including the “Agenda for Change” • Poverty reduction remains the main objective, but new focus on human rights, democracy & governance & inclusive & sustainable growth • Measured by relevant indicators (MDGs & other indicators agreed by the Union & its MS) • DCI funding increases by 19% (2011 prices)

15. Scope IGeographic programmes (bilateral, regional & continental) Funding € 14 billion Regions Asia, Central Asia, Latin America, Middle East & South Africa Bilateral 27 countries (upper MICs & countries with 1% or more of global GNI are not eligible, except Cuba & South Africa) Regional 46 countries ( including the above 27 countries) Areas 3 sectors aligned to national strategies ODA100% DACable

16. Scope IIThematic programmes Funding € 8.3 billion Regions All third countries except industrialised & pre-accession Themes Global Public Goods & Challenges (€ 6.3 billion): human development, climate change & environment, sustainable energy, food security & sustainable agriculture, migration & asylum Civil Society Organisations & Local Authorities (€ 2 billion) ODA10% flexibility over DACability

17. Scope III Pan-African Programme • Funding € 1 billion • Regions Countries, Territories & Regions covered by the Joint-EU Africa Strategy • ODA 10% flexibility over DACability

18. Total 23.3 bn€ (Annex VII)

19. 11th European Development Fund Based on Cotonou agreement: cooperation with 78 ACP countries Funding: € 34.3 billion Internal Agreement: First of various legal texts forming the EDF To be ratified by all MS Only covers the broad financial envelopes No major modifications compared to the 10th EDF 19

20. Cooperation with ACPs & OCTs remains outside the EU Budget Further alignment of MS contribution keys with budget keys Inclusion of new elements from the Cotonou revision Elements on programming & implementation at a later stage: implementation of EU development policy principles (“Agenda for Change”) differentiation will apply while respecting the provisions of the Cotonou Agreement 20