European Commission welcomes political agreement on future €79.5 billion for a new instrument to finance the EU external action and lead the global recovery through international partnerships
The European Union will soon have a unified instrument that will make the financing of EU external action more coherent, transparent and flexible, and will allow the EU to effectively uphold and promote its values and interests worldwide.
EU member states’ ambassadors today endorsed the provisional agreement reached on 15 December between the Council Presidency and European Parliament’s representatives on a regulation setting up the Neighbourhood, Development and International Cooperation Instrument (NDICI), in the context of the 2021-2027 multiannual financial framework (MFF).
The new instrument will streamline and simplify EU external action financing instruments for international and development cooperation, crisis response or peace-building actions in partner countries. It will do so by merging ten existing external financing instruments – as well as the European Development Fund – into one single financing tool.
Moreover, the new instrument will be policy-driven as it will be based on the EU’s key policy objectives and agreed with the partners. It will promote multilateralism, strategic priorities and the achievement of key international commitments and objectives, including the Sustainable Development Goals, the 2030 Agenda and the Paris Agreement.
NDICI will be granted a total financial envelope of EUR 79 462 million in current prices (70 800 million in 2018 prices) for the period 2021-2027, providing funding through three key pillars.
I. Geographical
The geographical component will promote partnerships through cooperation with partner countries in the following regions: the European Neighbourhood, Sub-Saharan Africa, Asia and the Pacific and the Americas and the Caribbean.
Geographic cooperation will focus on good governance, inclusive growth, climate and environment objectives, poverty eradication, the fight against inequalities, resilience, conflict prevention and human development among other cross-cutting issues. In addition, European Neighbourhood countries will benefit from enhanced political cooperation and support for the purposes of enhancing regional cooperation and promoting integration into the EU’s internal market.
The financial envelope will amount to EUR 60 388 million (EUR 53 805 million), of which at least EUR 19 323 million (EUR 17 217 million) will be earmarked for the Neighbourhood, while maintaining an adequate geographical balance, and at least EUR 29 181 million (EUR 26 000 million) will be earmarked for Sub-Saharan Africa.
II. Thematic
The thematic programmes – for which EUR 6 358 million (EUR 5 665 million) are foreseen – will fund actions linked to the Sustainable Development Goals at global level. Thematic programmes will therefore focus on human rights and democracy, civil society, stability and peace, as well as on global challenges such as health, education and training, women and children, work, social protection, culture, migration and climate change.
III. Rapid Response
The rapid response component amounting to EUR 3 182 million (EUR 2 835 million) will be dedicated to financing quick response capacity for crisis management, conflict prevention and peace building. Actions financed under this component aim at strengthening resilience of crisis affected countries, linking humanitarian and development actions and addressing foreign policy needs and priorities.
Finally, an additional flexibility cushion for emerging challenges and priorities worth EUR 9 534 million (EUR 8 495 million) will allow the EU to account for new challenges, such as crisis and post-crisis situations or migratory pressure, or promote new Union-led or international initiatives or priorities.
Background and next steps
The NDICI was originally proposed by the European Commission on 14 June 2018 as part of a dedicated Communication titled ‘A modern Budget for a Union that Protects, Empowers and Defends – The Multiannual Financial Framework 2021-2027’ which sets out the main priorities and overall budgetary framework for the EU’s external action.
The Parliament adopted its first-reading position on 27 March 2019 and the Council adopted a partial mandate for negotiations with the European Parliament on 13 June 2019.
On 27 May 2020, the Commission published a revised MFF proposal and at the Special Meeting of the European Council (17-21 July 2020), and member states decided on the sum to allocate for the total budget of the NDICI.
Following today’s endorsement by Coreper, the European Parliament and the Council will translate the agreement into legislative text before final steps will be taken for its adoption.
The Regulation will retroactively apply from 1 January 2021.
- European Council, Special meeting of the European Council (17-21 July 2020), Conclusions, EUCO 10/20
- European Commission, The EU budget powering the recovery plan for Europe, 27 May 2020
- Council, Partial mandate for negotiations with the European Parliament (10305/19), 13 June 2019
- European Commission, Proposal for a Regulation of the European Parliament and of the Council establishing the Neighbourhood, Development and International Cooperation Instrument (COM(2018)460), 14 July 2018
Background
The NDICI puts an end to the European Development Fund supporting the EU cooperation to Africa, the Caribbean and the Pacific for decades. This Fund was directly financed by the EU Member States, not by the EU budget, and therefore was not subject to the scrutiny of the European Parliament. Through the NDICI, the EU will also boost its support to sustainable investment worldwide under the European Fund for Sustainable Development Plus (EFSD+) by leveraging private capital to complement direct external cooperation grants. The EFSD+ will be backed by a €53.4 billion External Action Guarantee, which will also cover the Western Balkans.
The political agreement reached this week addresses the last -and possibly most sensitive- elements of the NDICI negotiations, concerning mainly the indicative allocation for some regions and thematic areas, migration, the governance of the new instrument, and the spending targets for issues such as climate change, which will increase to 30%. The political agreement will be translated into the corresponding legal text in the next days, before the two institutions formally adopt the NDICI.
Source: European Commission, European Council