The Commissioner responsible for EuropeAid, Commissioner for External Relations and European Neighbourhood Policy, Benita Ferrero-Waldner, commented: "In 2006 we have delivered record levels of aid, and spearheaded efforts to bring innovative and effective responses to the year's challenges. I am particularly proud that the Commission was able to develop the Temporary International Mechanism (TIM), allowing aid to continue to flow to the Palestinian people under the most difficult political circumstances, not only from the Commission but other donors as well. The Commission's internal reforms have borne fruit: the Commission is now a donor that delivers on its promises and not only meets the best international standards, but leads the way for others."
Commenting, Commissioner for Development and Humanitarian Aid Louis Michel said: “In 2006 the EU promised to increase aid, improve coordination among European donors and focus on Africa to achieve the Millennium Development Goals. We are delivering record contracting and payments for programmes in African, Caribbean and Pacific (ACP) countries; major investments in water, energy and other infrastructure; support to peace operations in Darfur; and assisting in the successful running of elections in Democratic Republic of Congo."
In 2006, the Commission continued to show its commitment to finding better ways to deliver aid.
Choosing the right solution: budget support
Recognising that the traditional project approach will not be enough to achieve the Millenium Development Goals (MDGs), the Commission together with other donors and partner countries, are putting in place new measures to deliver aid more effectively.
In this context, budget support has been identified by the EU as the "preferred modality [to deliver aid] where conditions allow"[1]. Whenever possible, the Commission uses this instrument to fight poverty by giving partner countries the means to administer funds entirely through their own authorities. A recent OECD evaluation drew some positive conclusions on budget support, stating that it "assists in implementing a poverty reduction strategy". It had positive effects on 'harmonisation' among donors and 'alignment' to partner country strategies. It has also been a catalyst for increased spending on health and education spending by partner governments. In the period 2002-2006, budget support represented 22% of all commitments in ACP countries, and 18% overall.
Infrastructure: finding new ways to scale up investment in ACP countries
ACP countries, and Africa in particular, will only reach the MDGs and achieve economic growth if they can ramp up infrastructure spending. The Commission is committed to helping them.
In 2006 we focused our efforts on innovative funds amounting to over €800 million, including a new Infrastructure Trust Fund. These funds are helping to leverage new financial resources, for example, from Private-Public Partnerships (PPPs), put local communities at the heart of programmes; and help ensure better governance so water and energy policies benefit those most in need.
Finding innovative solutions: the Temporary International Mechanism
Following the election of a Hamas-led administration in the Palestinian Authority in early 2006, the EU suspended direct aid to the PA, but was determined to find ways to continue bringing critical assistance to the Palestinian people. At the request of the Quartet (EU, US, UN and Russia) the Commission devised an unprecedented programme of relief, bringing assistance directly to individuals through social allowances, which now reach nearly a quarter of the Palestinian population. The mechanism has also helped to maintain basic services such as water, electricity, and healthcare. Last year the Commission allocated €105 million to the TIM, bringing its total assistance to the Palestinian people in 2006 to €346 million.
Setting new standards: Fast response in Afghanistan
In 2006 the Commission honoured its pledge to allocate €1 billion in reconstruction aid to Afghanistan in the five years following the fall of the Taliban. By December 2006, €912 million had been contracted and €738 million had been paid: a very strong performance against a very difficult political and security background. This aid is delivering very positive results including health clinics, road improvements and support for two successful elections, in 2004 and 2005.
Responding to partners' individual needs
The European Neighbourhood Policy (ENP), which is strengthening ties with partners to the East and the South of the EU, is bringing financial and technical assistance to Europe's neighbours in a more targeted way than ever before, focussed on joint priorities set out in Action Plans agreed with each country.
To support this policy, a new and flexible instrument better adapted to the needs of individual countries was developed in 2006 (the "ENPI"). It aims to enhance ownership in partner countries administrations. From 2007-2013 the budget foreseen for the countries of the ENP is €12 billion, 32% more than in the last budget period (2000-2006).
Background
The EU (Commission and Member States) is the biggest donor providing around 55% of the world's development assistance. In 2006, the Commission remained one of the world's most significant donors. EU assistance goes to more than 150 countries, territories and organisations and focuses on the global challenges of the 21st century: tackling poverty, promoting democracy and security, social equity, economic prosperity, and environmental sustainability.
EuropeAid, in Brussels, is the Commission Directorate General responsible for the implementation of assistance (except for humanitarian aid and pre-accession support). Its role is key in transforming political commitments into concrete results in the fight to eradicate poverty and to promote peace, human rights and sustainable development throughout the world.
