EU Development Policy

The EU is the world’s largest development aid donor, providing more than half of the world’s development assistance. The main objective of the Union’s development cooperation policy is to contribute to sustainable economic and social development in developing countries and to eradicate poverty.

Photo: EC/ECHO/Simon Horner

During the Danish Presidency of the Council of the EU, a number of dossiers on the area of development will dominate the work of the Council. Below you can read more about these matters and the EU’s development policy.

Revision of European Development Policy

The European Union is the most generous donor of official development aid worldwide. In 2010, the EU and Member States provided EUR 53.8 billion - more than 50 per cent of global aid.

During the Danish Presidency, EU development policy is to be revised in order to meet the challenges the world faces today. Many people have been freed from poverty. Indeed, several countries that were previously characterised as developing countries are now themselves donors of development assistance.

The Council is to decide how to focus development cooperation to where the need is greatest. It will focus on how to make EU development cooperation more effective and adapted to the situation in partner countries, and on how cooperation between the EU and Member States can be strengthened.

Development cooperation funding

During the Danish Presidency, the European Parliament and the Council are to negotiate the EU development budget and how to spend funds. Development cooperation funding is mainly from the Development Cooperation Instrument (DCI), which distributes an average of approximately EUR 18 billion annually through a series of thematic and geographical development programmes.

The overall objective of the DCI is poverty reduction. The principles of the revised EU Development Policy are to be reflected in the DCI and the Council and the European Parliament will decide on the design of the DCI programmes and budget size for the period 2014-2020.

European Development Fund

The European Development Fund (EDF) has an average of EUR 3.78 billion annually available, and funds are given both as assistance and as loans to the private sector through the European Investment Bank. The money goes mainly to economic development, social and human development and regional cooperation in a number of African, Caribbean and Pacific countries (ACP).

The cooperation between EU Member States and the ACP countries is laid down in the Cotonou Agreement. Negotiations on a new EDF budget will take place among the Member States since the EDF is not part of the EU budget and Parliament, therefore, is not a co-legislator.

Budget Support

The European Commission provides approximately 25 per cent of its development aid as budget support. Budget support is a form of development cooperation, which directly supports developing countries’ national budgets, thus supporting a country's overall development plan. There is a close dialogue with the country on budget revenue and expenditure, achievements and reforms.

Studies show that budget support is an effective form of assistance since it ensures ownership and strengthens country systems. During the Danish Presidency, the Council is to decide on the future use of budget support: what criteria should apply, how to ensure transparency and control of funds, and how the Commission and EU Member States can coordinate their use of budget support.

The European Voluntary Aid Corps

The proposal for a European voluntary humanitarian aid corps is to be discussed by the Council and European Parliament during the Danish Presidency. The purpose is to provide Europeans volunteers with the opportunity to help with humanitarian work outside the EU.

Working as a volunteer may include involvement in the prevention of humanitarian crises, assistance in protracted humanitarian crises and climate adaptation. However, young volunteers will not be sent to complex crises.

The corps is to provide a common framework for recruitment, training and deployment of volunteers, building on experience gathered from pilot projects launched by the Commission in cooperation with humanitarian organisations.

Policy Coherence for Development

A wide range of policy areas may have - negative as well as positive - consequences for development cooperation. This applies to policies for instance in trade, migration, defence, agriculture, climate or the environment.

During the Danish Presidency, the Commission will launch a report on policy coherence for development, which is to be discussed in the Council in order to continue efforts to ensure coherence between EU policies for the benefit of the world's poorest people.

The world’s largest donor
The EU is the world’s largest donor of development aid, providing more than half of the world’s official development assistance through the community assistance and the Member States’ own contributions. In total, EU Member States contributed about EUR 53.8 billion for development assistance in 2010.

The EU Member States have committed themselves to coordinating their positions in the UN and in international financial institutions in order for Europe to speak with “one voice” and thereby gain greater influence.

The framework for development cooperation in the EU
While the Lisbon Treaty sets the legal framework for development cooperation, the European Consensus on Development, which was signed by the EU Member States in 2005, identifies goals, principles and commitments that guide the European Commission and the Member States’ actions.

The EU is committed to achieving the Millennium Development Goals, which aim to halve poverty and hunger by 2015. A reduction of poverty will help meet other challenges, such as HIV/AIDS, conflict, migration and sustainable development.

Europe’s democratic values such as respect for human rights, democracy and rule of law, gender equality and good governance are at the heart of the European Union’s development efforts. The European Union is committed to increasing its official development assistance to the UN target of 0.7 per cent of its gross national income (GNI) by 2015.

European aid is aligned with national priorities and strategies of aid recipients. This is done because the EU recognises that developing countries have the main responsibility for their own development.

The EU supports development programmes and actions across the world, especially through the European Development Fund, the Development Cooperation Instrument and the European Investment Bank.

The Cotonou Agreement
The Cotonou Agreement from 2000 between the EU and African, Caribbean and Pacific states (ACP) is the most comprehensive agreement between the EU and developing countries. It provides the framework for a coherent approach, where development, trade, the environment and other issues are addressed in a coherent way, benefitting the development of the ACP states.

The Lisbon Treaty strengthens the EU development cooperation
The Lisbon Treaty has strengthened development cooperation and created the European External Action Service (EEAS). The aim is to increase European capacity and provide a unique opportunity to use the instruments of development, security and diplomacy to create more relevant and efficient development policies.

The Council makes decisions on development policy by qualified majority and in co-decision with the European Parliament in accordance with the ordinary legislative procedure. Other decisions, such as joint declarations, are decided by unanimity.