Brussels, 29/04/2004 (Agence Europe) - On Wednesday, the Commission adopted a proposal of regulation aimed at complete untying of European development aid financed by the Community budget. By so doing, the Commission goes beyond the OECD recommendations which mainly place emphasis on untying aid to the developing countries. In other words, the Commission proposes that development activities financed by EU loans and donations should now be open to international competition and no longer reserved for donor country suppliers. The thematic programmes would be accessible to suppliers of goods and services of all developing and transition countries. The geographic programmes would be open to nationals of the region targeted by the programme.
Nationals of Member States, candidate countries and EEA countries (Norway, Iceland and Liechtenstein), as well as nationals of all other donor countries (such as the United States, Japan and Canada) could also answer calls for tenders, based on the principle of reciprocity. Competitive bidding for the provision of goods and services financed by development aid should secure the best value for money of the EUR 3.5 million in annual EU development aid from the EU budget. The Commission considers that untying of aid should also promote regional integration of developing countries by encouraging suppliers in these countries to pursue contracts in neighbouring countries. The results of international studies show that increased competition resulting from the complete untying of aid could entail a rise in aid effectiveness of up to 30%.
In a press release, Poul Nielson, Development Commissioner, says: "Untying of aid is not a goal in itself. But it is an important tool in our continued attempts to improve the effectiveness of our development aid. Providing more value for money will be to the obvious benefit of the poor we target and will meet the legitimate expectations of the European taxpayers".
The proposal of regulation comes in the wake of a communication on complete untying of aid published by the Commission in November 2002. The EU Development Ministers were the first to receive news of its presentation on Tuesday during the Development Council in Luxembourg.