1. 1 Multiannual Financial Framework 2014-2020 New Development Cooperation Instrument 11th European Development Fund

2.  Multiannual budget = 5 headings for 7 years: (1) Smart and Inclusive Growth; (2) Sustainable Growth: natural resources; (3) Security & citizenship; (4) Global Europe; (5) Administration  70 Regulations to be adopted by Council & EP  Timing of negotiations  Before end 2012: financial volumes  Before end 2013: adoption of Regulations

3. Major objectives of EU external action  Promote EU values  Invest in EU’s Neighbourhood and underpin our commitment to Enlargement  Support EU interests abroad  Enhance external projection of internal policies to better address global challenges  Contribute to the eradication of poverty  Demonstrate solidarity with people facing disasters  Strengthen international security

4. Responding to a new context  Structure / instruments mainly continue from current MFF  But adapted to changing world & changing EU  New opportunities of the Lisbon Treaty & the EEAS  New Partnership Instrument to promote EU interests  Common implementing regulation to streamline & simplify implementing rules for all instruments

5. Increasing the efficiency and impact of external spending  Greater strategic focus (differentiated approach)  Improve the architecture of instruments  Increase flexibility  Simplify multiannual programming  Reduce dispersion of activities  Promote Aid effectiveness

6. 6 Budget per instruments (in current prices)  Pre-accession instrument14,110 M€  European Neighbourhood Instrument18,182 M€  Development Cooperation Instrument23,295 M€  Partnership Instrument1,131 M€  Instrument for Stability2,829 M€  European Instrument for Democracy & Human Rights1,578 M€  Instrument for Nuclear Safety Cooperation 631 M€  Instrument for Greenland219 M€  European Development Fund (outside Budget)34,276 M€  TOTAL96,251 M€

7. 7 Main innovations “Global Europe” (Heading IV), DCI & EDF

8. Differentiation  Target resources where they have greatest impact  Under DCI:  19 countries able to generate significant own resources will be graduated from bilateral assistance  Those countries are still eligible for regional cooperation & thematic programmes  Criteria for allocation of funds: partner countries' needs, capacities, commitments & performance, & potential EU impact

9. Concentration  Avoid sectoral fragmentation  Higher impact of EU aid by concentrating resources on a limited number of sectors  Under DCI:  Maximum of 3 sectors per country for geographic programmes  Common areas of cooperation established in accordance with the Agenda for Change

10. A more flexible programming process  More coherence & aid effectiveness: alignment to partner countries & joint programming  Under DCI:  CSPs are not mandatory when alignment with national development plans  CSPs may be replaced by Joint Framework Documents  More flexible programming process for countries in fragile, crisis & post-crisis situations

11. Mutual accountability in allocating & disbursing funds  Human rights, democracy & good governance  Enlargement & neighbouring countries: assistance more closely linked to progress in implementing reforms  Developing countries: mutual accountability in respect of commitments & the fulfilment of objectives as agreed

12. Blending of grants & loans  EU member states' public funds are heavily constrained  Combine grants with additional flows (such as loans and risk capital) to gain financial & qualitative leverage & increase EU development policy impact  Allows to finance large infrastructure projects which would otherwise be too costly for single donors

13. Simplified rules  Reduction of administrative burden  Harmonisation through a horizontal legislative instrument (Common Implementing Regulation) Stronger involvement of the EP  Use of delegated acts  Improved democratic scrutiny over the European Development Fund

14. DCI: Objectives, scope and structure  DCI adapted to changing world & new EU policies including the “Agenda for Change”  Poverty reduction remains the main objective, but new focus on human rights, democracy & governance & inclusive & sustainable growth  Measured by relevant indicators (MDGs & other indicators agreed by the Union & its MS)  DCI funding increases by 19% (2011 prices)

15. Scope IGeographic programmes (bilateral, regional & continental)  Funding€ 14 billion  RegionsAsia, Central Asia, Latin America, Middle East & South Africa  Bilateral27 countries (upper MICs & countries with 1% or more of global GNI are not eligible, except Cuba & South Africa)  Regional46 countries (including the above 27 countries)  Areas3 sectors aligned to national strategies  ODA100% DACable

16. Scope IIThematic programmes  Funding€ 8.3 billion  RegionsAll third countries except industrialised & pre-accession  ThemesGlobal Public Goods & Challenges (€ 6.3 billion): human development, climate change & environment, sustainable energy, food security & sustainable agriculture, migration & asylum Civil Society Organisations & Local Authorities (€ 2 billion)  ODA10% flexibility over DACability

17. Scope IIIPan-African Programme  Funding€ 1 billion  RegionsCountries, Territories & Regions covered by the Joint-EU Africa Strategy  ODA10% flexibility over DACability

18. Total 23.3 bn€ (Annex VII)

19. 19 11th European Development Fund  Based on Cotonou agreement: cooperation with 78 ACP countries  Funding: € 34.3 billion  Internal Agreement:  First of various legal texts forming the EDF  To be ratified by all MS  Only covers the broad financial envelopes  No major modifications compared to the 10th EDF

20. 20  Cooperation with ACPs & OCTs remains outside the EU Budget  Further alignment of MS contribution keys with budget keys  Inclusion of new elements from the Cotonou revision  Elements on programming & implementation at a later stage:  implementation of EU development policy principles (“Agenda for Change”)  differentiation will apply while respecting the provisions of the Cotonou Agreement