In the revised proposal for the EU’s multiannual external action budget - €118.2 billion for 2021-2027, including €15.5 billion of new funds under the recovery plan (see EUROPE 12494/1) - the main innovation is the increase of the guarantee for investments in non-Member States to €10.5 billion to help these countries cope with the economic and social impact of the crisis linked to the Covid-19 pandemic.
The European Commission also proposes increasing the humanitarian budget by €5 billion to €14.8 billion (see separate news) and to allocate €1 billion from the EU 2020 budget to the European Fund for Sustainable Development (EFSD) to finance the immediate response to the crisis. According to the Commission’s proposal, the EFSD guarantee will also be extended to the Western Balkans, in addition to the neighbourhood and sub-Saharan Africa.
The ‘NDCI’ guarantee for external public and private investments is part of the 'Neighbourhood, Development and International Cooperation' (NDICI) single financial instrument (see EUROPE 12425/17, 12345/15). The budget of €10.5 billion represents an increase of 8% compared to the previous proposal for the Multiannual Financial Framework (MFF).
Under this guarantee, the EU will be able to support operations approved between 1 January 2021 and 31 December 2027 up to a maximum of €130 billion (previously €60 billion).
“This guarantee is a powerful instrument for raising funds to promote investment in non-Member States. This multiplier effect is what we need in the context of the Covid-19 pandemic”, stressed International Partnerships Commissioner Jutta Urpilainen at a press conference.
The distribution of the investment guarantee between countries in the EU neighbourhood and other vulnerable non-Member States, particularly developing countries, has not been decided. This will be done during the implementation phase on “the basis of need”, after an evaluation, she conceded.
Asked why she is optimistic, given that this assessment has not been made and 40% of the guarantee has already been approved, Mrs Urpilainen replied: “You only have to look at the economic and social consequences of the pandemic. We need to create more jobs”. She continued: “The pandemic has turned our world upside down. It has revealed the strengths and weaknesses of our societies. The most vulnerable suffer the most. Hence the need to address inequalities”.
The Commissioner recalled that €23 billion in support has already been pledged to vulnerable non-Member States through reallocation of aid funds for the EU’s contribution to the global coronavirus pandemic response (see EUROPE 12464/13).
She also mentioned the EU’s support for the moratorium on developing countries’ debt and the proposal made most recently by Commission President Ursula von der Leyen for a global recovery initiative linking investment and debt relief to Sustainable Development Goals (see EUROPE 12495/11).
With regard to enlargement, the Commission maintains its proposal at €12.9 billion for the IPA III pre-accession instrument (in 2018 prices, €14.5 billion in current prices) for 2021-2027, the amount proposed in June 2018, while its predecessor, IPA II, was provided with €12.8 billion for 2014-2020 (in current prices). These funds concern candidate and potential candidate countries, i.e. the six countries of the Western Balkans (Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia) and Turkey, which already benefit from IPA II. The Commission has not proposed a country-specific envelope to adjust for these countries’ respect for the terms, in particular concerning the Rule of law.
To consult the legislative text: https://bit.ly/36T7XPt (Original version in French by Aminata Niang with Camille-Cerise Gessant)