Tag Archives: Budgetisation

Budgetisation of the European Development Fund

Budgetisation of the European Development Fund

Outline of the Community (European Union) legislation about Budgetisation of the European Development Fund


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > African Caribbean and Pacific states (ACP)

Budgetisation of the European Development Fund

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 8 October 2003: “Towards the full integration of cooperation with ACP countries in the EU budget” [COM(2003) 590 final – not published in the Official Journal].


In this communication, the Commission recommends the incorporation into the EU budget of the aid granted to the ACP and OCT countries under the European Development Fund (EDF).


Countering the risks of marginalisation

With the extension of the external relations of the Union, the conclusion of cooperation agreements with numerous other regions and the increase in the amounts earmarked for external aid in the budget, separate financing for the ACP countries is no longer a privilege, rather the opposite.

These cooperation agreements with numerous regions around the world, like the Cotonou Agreement broach a series of subjects of common interest: political dialogue, trade arrangements, democracy objectives, etc. After the integration of the EDF into the budget, all the major geographical programmes will be part of the structure of the budget. From a technical point of view, that will permit increased synergy between the programmes centred around the national/geographical approach and those that pursue thematic objectives.

The cooperation programmes with the ACP countries have created a wealth of experience and good practice that is worthy of application to other programmes pursued in other developing regions. The incorporation of the EDF will facilitate the mutual enrichment of the different programmes.

The incorporation of the EDF into the budget will also facilitate cooperation between the regions of Africa. A similar gain in coherence could be brought about for Caribbean countries in relation to Latin America and for the Pacific group in relation to Asia.


Towards greater independence

With the budgetisation of the EDF, the financing of EU-ACP cooperation would gain independence from voluntary contributions determined as a result of national viewpoints and would present better prospects for continuity. For Member States, that would signify that financial cooperation with the ACP was genuinely placed at the EU level.

Towards stronger legitimacy

The EDF is currently the only expenditure that is not subject to authorisation by the European Parliament. Incorporating the EDF into the budget would put an end to this anomaly, thereby strengthening the public legitimacy of the EU’s external assistance. Not being part of the budget, cooperation with the ACP countries is clearly excluded from one of the most important political decision-making processes of the Union. The already significant risk that relations with the ACP countries are marginalised in comparison with other economically more advanced regions of the world is exacerbated by their lack of visibility in the political arenas of the Union. Furthermore, the influence of the ACP-EU Joint Parliamentary Assembly will be enhanced through its members in the European Parliament.

Towards greater transparency

A single budget including all external aid expenditures offers the possibility of providing a global picture of the EU’s external assistance and of EU development policy, in terms of both size and geographical distribution. Citizens will have to refer only to a single document in future when they want to know what the EC spends on development policy.

Towards greater efficiency and effectiveness

The integration of the EDF into the budget will lead to greater cost effectiveness. The unification of administrative and legal rules, decision-making structures, and commitment and payment procedures will remove a certain amount of duplication which is currently imposed on the different operators and stakeholders. It will help simplify reporting requirements, reduce the administrative burden on beneficiary countries and respond in a more efficient manner to the challenges faced by developing countries. The management principles applicable to the budget will also make the pattern of commitments more regular and help improve the delivery of aid to the ACP.


Will the quality of the partnership with ACP countries be maintained?

Yes. In the Commission’s view, the European Development Fund is a historical, not a substantive element in the privileged relations between the ACP and the EU. The Cotonou Agreement remains the cornerstone of this partnership and will continue to govern EU-ACP relations as in the past.

Commitments to individual ACP countries will continue to be made on the basis of programmes prepared and approved with them. In every country, the government will continue to be closely associated with multiannual indicative programming, the preparation of annual action plans, etc.

Will budgetisation challenge the financial commitment of the EU to the ACP?

This financial commitment must be renewed every five years, either through a new EDF within the framework of the general budget. The instruments currently available in the budgetary framework, and more particularly the decisions on the financial perspectives, offer the same guarantees.


There are currently two main channels of EU assistance to the ACP countries: funds from the EU budget and funds from the EDF. Different administrative rules and decision-making structures apply to these two forms of aid. Funds from the EU budget are administered in accordance with the general Financial Regulation. Funds from the EDF meanwhile are administered according to the rules laid down by the Cotonou Agreement.

The proposal to incorporate the EDF into the budget would mean that the new financial perspectives could include the totality of expenditure for EU-ACP cooperation. This is not a new proposal: the Commission had previously proposed the integration of the EDF in the Community general budget in 1973 and 1979. During the negotiations on the 2007-2013 financial perspectives, the Commission revived the proposal, but it was once again rejected by the European Council (15-16 December 2005). The debate is likely to be reopened when the next financial perspectives are prepared.

European Development Fund

European Development Fund

Outline of the Community (European Union) legislation about European Development Fund


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > African Caribbean and Pacific states (ACP)

European Development Fund (EDF)

Even though a heading has been reserved for the Fund in the Community budget since 1993 following a request by the European Parliament, the EDF does not yet come under the Community’s general budget. It is funded by the Member States, is subject to its own financial rules and is managed by a specific committee. The aid granted to ACP States and OCTs will continue to be funded by the EDF, at least for the period 2008-2013.

Each EDF is concluded for a period of around five years. Since the conclusion of the first partnership convention in 1964, the EDF cycles have generally followed the partnership agreement/convention cycles.

  • First EDF: 1959-1964
  • Second EDF: 1964-1970 (Yaoundé I Convention)
  • Third EDF: 1970-1975 (Yaoundé II Convention)
  • Fourth EDF: 1975-1980 (Lomé I Convention)
  • Fifth EDF: 1980-1985 (Lomé II Convention)
  • Sixth EDF: 1985-1990 (Lomé III Convention)
  • Seventh EDF: 1990-1995 (Lomé IV Convention)
  • Eighth EDF: 1995-2000 (Lomé IV Convention and the revised Lomé IV)
  • Ninth EDF: 2000-2007 (Cotonou Agreement)
  • Tenth EDF: 2008-2013 (Revised Cotonou Agreement)

The EDF consists of several instruments, including grants, risk capital and loans to the private sector. The Stabex and Sysmin instruments designed to help the agricultural and mining sectors were abolished by the new partnership agreement signed in Cotonou in June 2000. This agreement also streamlined the EDF and introduced a system of rolling programming, making for greater flexibility and giving the ACP States greater responsibility.

The ninth EDF has been allocated 13.5 billion for the period 2000-2007. In addition, the unexpended balances from previous EDFs total 9.9 billion.

ACP-EC Council of Ministers Decision No 6/2005of 22 November 2005 commits 482 million of the conditional 1 billion to the ninth European Development Fund. This amount is allocated as follows: 352 million to support long-term development, 48 million for regional cooperation and integration and 82 million for the investment facility. Furthermore, a second instalment of 250 million for the ACP-EU Water Facility was established by ACP-EC Council of Ministers Decision No 7/2005 .

The development aid provided by the EDF forms part of a broader European framework. Within the European Union, the funds of the Community’s general budget may be used for certain types of aid. Moreover, in addition to managing part of the EDF’s resources (loans and risk capital), the European Investment Bank (EIB) will contribute a total of 1.7 billion from own resources for the period covered by the ninth EDF.

The tenth EDF covers the period from 2008 to 2013 and provides an overall budget of EUR 22 682 million. Of this amount, EUR 21 966 million is allocated to the ACP countries, EUR 286 million to the OCT and EUR 430 million to the Commission as support expenditure for programming and implementation of the EDF. The amount for the ACP countries is divided accordingly: EUR 17 766 million to the national and regional indicative programmes, EUR 2 700 million to intra-ACP and intra-regional cooperation and EUR 1 500 million to Investment Facilities. An increased share of the budget is devoted to regional programmes, thereby emphasising the importance of regional economic integration as the basic framework for national and local development. An innovation in the tenth EDF is the creation of “incentive amounts” for each country.

The Member States have their own bilateral agreements and implement their own initiatives with developing countries that are not financed by the EDF or any other Community funds.