At a glance
ODA Funding trends
European Union Institutions’ (EUI; which indicates financing from both the European Commission (EC) and the European Investment Bank (EIB)) total ODA was US$19.0 billion in 2021, making them the third-largest OECD DAC donor in absolute terms (in 2020 prices). The European Union and its 27 Member States together spent US$81.3 billion in ODA, representing 0.49% of EU gross national income (GNI), however this is far below the 0.7% ODA/GNI target set by the EU.
In December 2020, the EU adopted its new long-term budget (2021-2027 Multiannual Financial Framework (MFF). The current MFF makes €1.07 trillion (US$1.22 trillion) available for the EU budget during the next seven years. Combined with the €750 billion (US$854.7 billion) recovery instrument, Next Generation EU, the total financial package is €1.80 trillion (US$2.05 trillion).
The MFF is divided into headings that cover broad policy areas and reflect the EU’s political priorities. Under the current MFF, external action will be financed under Heading 6: ‘Neighbourhood and the World’ (one of the headings under the MFF), which is allocated €98.4 billion (US$112.2 billion), including €85.2 billion (US$97.1 billion) for external action and, within that, €70.8 billion (US$80.7 billion) for the ‘Neighbourhood, Development, and International Cooperation Instrument – Global Europe’ (NDICI – Global Europe).
The EU’s new development instrument – the Neighbourhood, Development, and International Cooperation Instrument (NDICI)–Global Europe – in the 2021-2027 EU MFF consolidates several instruments in the previous EU long-term budget, as well as the off-budget European Development Fund, to streamline the EU’s funding for external action. It has three main pillars: geographical, thematic, and rapid response. Under its geographic envelope, NDICI-Global Europe also includes an investment framework, the European Fund for Sustainable Development Plus (EFSD+), and a requirement that at least 93% of its funding must be eligible as ODA.
NDICI–Global Europe has maintained development funding at a similar level to the past MFF, despite the UK’s departure from the EU. It has a total of €79.5 billion (US$90.6 billion) and, compared to the past MFF, a higher proportion of geographic funding than thematic funding. Geographic funding is allocated through the ‘programming process’, whereby EU delegations in low- and middle-income countries decide multiyear indicative plans together with country authorities. The EFSD+ budget has also dramatically increased from the EFSD’s €1.5 billion (US$1.7 billion) to nearly €15.0 billion (US$17.1 billion).
In 2021, the European Commission adopted the regional and country multi-annual indicative programs (MIPs) for NDICI’s geographic funding. The MIPs set out the priorities and financial allocations for development cooperation in each EU partner country and region. Financial allocations in the MIPs amount to around €26.3 billion (US$30.0 billion), with €12.4 billion (US$14.2 billion) in country allocations and €13.9 billion (US$15.7 billion) for regional allocations. Within this, the allocations for ‘sub-Saharan Africa’ (meaning the regions of Eastern, Western, Central, and Southern Africa, as designated by the African Union) are €9.1 billion (US$10.4 billion) in country allocations for 2021-2024 and €10.2 billion (US$11.6 billion) for the regional level for 2021-2027. Policy priorities that are prominently featured in the MIPs include the green and digital transition, MIP sustainable growth and decent jobs, migration, governance, peace and security, social inclusion, and human development, particularly education.
The EUI’s development cooperation focuses on interlinking sectors (such as development, peace, and humanitarian assistance), increasing the effectiveness of development assistance by increasing partner country ownership of development strategies, and combining traditional financing with private sector and domestic resources.
In July 2019, Ursula von der Leyen was elected as European Commission President. She styled her Commission as a ‘geopolitical commission,’ which has been reflected in the increased ‘geographization’ of the new development budget, NDICI-Global Europe. Her priorities for 2019-2024 include 1) a renewed focus on climate change through the European Green Deal; 2) digitalization; 3) further investments in research and innovation; 3) strengthened global leadership; and 4) for development policy, increased investments in development cooperation focused on human development (particularly education), sustainable growth and jobs, and the green and digital transitions.
Health is among the top priorities of the European Commission (along with education), as outlined in the EU Agenda for change. Accordingly, the EUI’s strategic focus and spending on health have increased over the past years. In 2022, at the second Global COVID-19 summit, European Commission President Ursula von der Leyen announced €300 million (US$342 million) for vaccine support via COVID-19 Vaccines Global Access (COVAX), €100 million (US$114 million) for Access to COVID-19 Tools Accelerator (ACT-A) initiatives, and US$450 million for the pandemic preparedness and global health security Financial Intermediary Fund (FIF) . Similarly, during the 2022 'Break COVID Now Summit', an event hosted by Gavi, the Vaccine Alliance (Gavi), the European Commission pledged €75 million (US$86 million) in grants, and the European Investment Bank (EIB) committed €1.0 billion (US$1.2 billion) in front-loaded financing for the COVAX Advance Market Commitment (AMC).
The EUI have a strong partnership focus with countries in Africa. During the 6th AU (African Union)-EU Summit, Team Europe (including EU Member States) committed to mobilizing €425 million (US$484 million) in new funding to ramp up vaccinations and support vaccine delivery, medical teams training, and sequencing capacity on the African continent, including €125 million (US$142 million) from the European Commission. The final declaration also stated that the EU will support African health sovereignty and invest in production capacity for manufacturing health products in Africa.
The European Investment Bank (EIB) has been increasing its focus on climate and development financing. In January 2022, the EIB launched its new dedicated arm for development finance outside of the EU, called ‘EIB Global’. EIB Global is intended to increase the EIB’s development impact, including through expanding the EIB’s presence in EU partner countries, but, for now, will not increase the EIB’s investment volumes outside the EU. In February 2022, the EIB announced it would make €500 million (US$570 million) in financing available with the aim of mobilizing €1 billion (US$1.1 billion) of investment through a partnership with the World Health Organization (WHO) and the EC to support resilient health systems in Africa.
From 2021 to 2027 for the rest of the EU long-term budget framework, the EUI’s ODA is likely to remain stable, despite the UK no longer contributing to the EU budget. In December 2021, in response to China’s Belt and Road Initiative, The EU launched its new strategy, Global Gateway, to mobilize €300 billion (US$341.9 billion) to invest in clean energy, digital and transport infrastructure, health, education, and research systems across the globe. The EU intends for Global Gateway to be a trusted brand that will promote democratic values, good governance, and transparency. Funding for Global Gateway will come in part from the EU budget, including the European Fund for Sustainable Development plus (EFSD+), as well as from €145 billion (US$165.2 billion) in planned investments from EU Member States and development finance institutions.
At the 6th AU-EU Summit in February 2022, EU and AU leaders hashed out a joint vision for a renewed partnership. The summit conclusions focus on the major flashpoints between the continents, including vaccine equity, economic recovery in African countries, the green transition, peace and security, and migration and mobility. The final declaration includes an Africa-Europe Investment Package of at least €150 billion (US$170 billion), including health and education packages. This financing isn’t new; the package is the estimated size of the Africa regional program within the EU’s new Global Gateway infrastructure investment initiative.
The EU is the third-largest multilateral donor; spending on migration has driven ODA increases in recent years
- The European Union Institutions’ (EUI; which indicates financing from both the European Commission (EC) and the European Investment Bank (EIB)) total ODA was US$19.0 billion in 2021, making them the third-largest OECD DAC donor in absolute terms (in 2020 prices). The European Union and its 27 Member States together spent €66.8 billion (US$76.1 billion) in ODA, representing 0.5% of EU ross national income (GNI), or 46% of global ODA The European Union and its 27 Member States together spent US$81.3 billion in ODA, representing 0.49% of EU gross national income (GNI), however this is far below the 0.7% ODA/GNI target set by the EU .
- EUI’s ODA decreased by 8% between 2020 and 2021, due to repayments of private sector loans and the frontloading of payments in 2020 in response to the COVID-19 pandemic.
- From 2021 - 2027 for the rest of the EU long-term budget framework, the EUI’s ODA is likely to remain stable.
- In December 2020, the EU adopted its new long-term budget (2021-2027 Multiannual Financial Framework (MFF). The current MFF makes €1.07 trillion (US$1.22 trillion) available for the EU budget during the next seven years. Combined with the €750 billion (US$854.7 billion) recovery instrument, Next Generation EU, the total financial package is €1.80 trillion (US$2.05 trillion).
- The EU’s new development instrument – the Neighbourhood, Development, and International Cooperation Instrument (NDICI)–Global Europe – in the 2021-2027 EU MFF consolidates several instruments in the previous EU long-term budget, as well as the off-budget European Development Fund, to streamline the EU’s funding for external action. It has three main pillars: geographical, thematic, and rapid response. Under its geographic envelope, NDICI-Global Europe also includes an investment framework, the European Fund for Sustainable Development Plus (EFSD+), and a requirement that at least 93% of its funding must be ODA-eligible.
- NDICI–Global Europe has maintained development funding at a similar level to the past MFF, despite the UK’s departure from the EU. It has a total of €79.5 billion (US$90. billion) and, compared to the past MFF, it has a higher proportion of geographic funding than thematic funding. Geographic funding is allocated through the ‘programming process’, whereby EU delegations in low- and middle-income countries decide multi-year indicative plans together with country authorities. The EFSD+ budget has also dramatically increased from the EFSD’s €1.5 billion (US$1.7 billion) to nearly €15.0 billion (US$17.1 billion)
Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.
The EU is collectively committed to providing 0.7% of GNI as ODA by 2030
The EU’s development strategy is outlined in the European Consensus on Development from 2017. Its overarching objectives are poverty reduction and alignment with the 2030 Agenda for Sustainable Development. The objectives have been translated into four frameworks for action:
1) People – human development and dignity, which includes education, nutrition, health, access to water, decent work, and human rights;
2) Planet – protecting the environment, managing natural resources, and tackling climate change;
3) Prosperity – inclusive and sustainable growth and jobs, which includes investment and trade, sustainable agriculture, and innovation; and
4) Peace – peaceful and inclusive societies, democracy, effective and accountable institutions, rule of law, and human rights for all, which includes humanitarian assistance.
The Consensus aims to improve the effectiveness of EU development policy through performance-based budget support. It also underlines the EU’s intention to combine traditional development assistance with other resources, including private sector investments and domestic resource mobilization.
The EUI aim to undertake an “integrated approach” toward external action, which includes taking a holistic view of policy approaches for advancing progress on sustainable development and working with a partnership approach, at the bilateral and multilateral levels. The key objectives of the EU’s development cooperation include: 1) Playing a key role in the achievement of the 17 Sustainable Development Goals (SDGs); 2) Promoting democracy, the rule of law, and the respect of human rights in partner countries; 3) Ensuring sustainable economic, social, and environmental progress in partner countries; and 4) Making development funding from different European countries more effective by deepening the cooperation between national governments.
Overall, the EU is collectively committed to providing 0.7% of GNI as ODA within the timeframe of the 2030 Agenda and, within this, the EU also aims to focus 0.15%-0.2% of its ODA/GNI ratio on ‘Least Developed Countries’ (LDCs) (which are a subset of low-income countries) and states affected by fragility and conflict to "target resources where the need is greatest".
One of the EU’s top priorities is strengthening its partnership with countries in Africa. In December 2020, the chief negotiators from the EU and the Organization of African, Caribbean, and Pacific States (OACPS) initialed a deal on a new 20-year treaty to govern EU-OACPS relations. The deal focuses on six key areas of cooperation: 1) human rights, democracy, and governance; 2) peace and security; 3) human and social development; 4) environmental sustainability and climate change; 5) sustainable growth; and 6) migration and mobility. The provisional agreement, pending formal signature, also considers the SDGs and the Paris Agreement.
Similarly, the EU remains an important development partner to countries in Latin America. Key sectors of development cooperation with the region include: 1) Developing innovative cooperation approaches; 2) Reducing disparities between people; 3) Promoting sustainable development; 4) Mitigating climate change; and 5) Advancing higher education and research.
In response to intensified global challenges (including climate change and migration) and changing economic and geopolitical interests, in May 2018 the European Commission proposed a new long-term budget for 2021-2027. Within it, the new Neighbourhood, Development, and International Cooperation Instrument – Global Europe for 2021-2027 (NDICI – Global Europe) streamlines existing external financial instruments to deliver more efficiently on priority sectors and global challenges. NDICI - Global Europe's priority areas will include: 1) Human development, 2) Social inclusion, 3) Gender equality, 4) Climate change, 5) Environmental protection, and 6) Migration-related actions. Funding from NDICI – Global Europe will support regions and partner countries that are most in need to overcome long-term challenges and will also be focused on advancing progress toward the 2030 Agenda and the Paris Agreement.
Since the onset of the COVID-19 crisis, the EU and its Member States, acting together as ‘Team Europe’ have been adapting priorities and programs with partner countries to address the crisis, particularly in supporting efforts to guarantee equitable access to safe and effective vaccines around the world (see sector: ‘Global health’).
In June 2021, the Council of the EU adopted conclusions on enhancing the European financial architecture for development that called for the European financial ecosystem, especially the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), to strengthen cooperation with European development finance institutions by following a 'Team Europe' approach and combining resources for better results.
In December 2021, in response to China’s Belt and Road Initiative, the EU launched its new strategy, Global Gateway, to mobilize €300 billion (US$341.9 billion) to invest in clean energy, digital and transport infrastructure, health, education, and research systems across the globe. The EU intends for Global Gateway to be a trusted brand that will promote democratic values, good governance, and transparency. Funding for Global Gateway will come in part from the EU budget, including the European Fund for Sustainable Development plus (EFSD+), as well as from €145 billion (US$165.2 billion) in planned investments from EU Member States and development finance institutions
The EU institutions have a strong preference for bilateral financing
The EUI show a strong preference for bilateral financing. In 2020, the EUI provided 99% of their ODA (US$19.5 billion) as bilateral funds to partner countries. The EUI’’s bilateral financing was channelled to sectors of government and civil society, followed by funding to budget support, which, according to the EC, promotes country ownership and aligns EU funding with national development strategies.
Though the EUI do not provide much core funding to multilaterals, in 2020, the EUI channelled 18% of its ODA or US$4.4 billion as earmarked funding to multilateral organizations. Earmarked funding through multilaterals is reported to the Organisation for Economic Co-operation and Development (OECD) as bilateral funding.
Bilateral funding focuses on government and civil society, humanitarian assistance, and financial services
According to data from the OECD, the EUI spent the largest share of their bilateral ODA in 2020 on strengthening government and civil society (14%). This includes funding for public sector policy and administrative management, decentralization, and anti-corruption. Other sectors, including general budget support (13%, which saw a 442% increase from funding levels in 2019), financial services and business support (11%), and humanitarian aid (11%) also received large proportions of the EU’s funding. Smaller shares were channeled towards energy (7%), education (6%) and other social services (5%).
The EUI provide a majority of their ODA in the form of grants (71%, or US$17.9 billion in 2020). The remaining 29% of the EUI’s ODA (US$6.9 billion) was channeled in the form of loans. The EUI prefer project-type interventions, which accounted for 65% of bilateral ODA (US$15.5 billion) in 2020, much higher than the 40% DAC average.
A portion of EUI ODA is channeled as loans from the European Investment Bank (EIB) The majority of EIB investments (90%) are made within Europe, however, the bank also has an external mandate, wherein roughly 10% of EIB loans were channeled to countries outside European partner countries.
The EIB is also key actor for managing funds through the European Fund for Sustainable Development (EFSD) under the European Investment Plan (EIP), which was endorsed by the EU with an initial contribution of €4.5 billion (US$5.1 billion), intending to generate additional public and private investments worth €44.0 billion (US$50.1 billion) in the EU neighbourhood and Africa through investment windows that address socio-economic causes of migration. The next iteration of EFSD, the EFSD+ (which will replace the current ESFD) will have nearly €15.0 billion (US$17.0 billion) dedicated to it from NDICI’s geographic envelopes
EU’s key instruments for bilateral ODA differ in geographic focus
Under the previous long-term budget, the 2014-2020 Multiannual Financial Framework (MFF), the Directorate General for International Partnerships (INTPA) was responsible for EU development and international assistance policy. INTPA implemented most of the EC's external assistance through instruments such as the Development Cooperation Instrument (DCI). In doing so, it considered the changing needs of partner countries and worked in close coordination with the Directorate-General for Neighbourhood Policy and Enlargement Negotiations (DG Near) and other Commission services.
In 2020, funding from the INTPA budget was mostly channeled toward countries in Asia (34%), followed by countries in ‘sub-Saharan Africa’ (24%, meaning the regions of Eastern, Western, Central, and Southern Africa, as designated by the African Union), and Latin America (19%). Of the top 10 recipients of INTPA funding, six fell under the category of low-middle income countries.
In alignment with the DG NEAR's mission of implementing assistance actions in Europe's eastern and southern neighbourhood, funding from the DG Near was focused mainly on Europe (78%), though around 16% was channeled to the MENA region. Funding was mostly directed at low- and upper-middle-income countries in these regions.
The European Development Fund (EDF) was another main instrument for providing funding for development cooperation before 2021. The EDF did not fall under the EU general budget and was instead funded by the EU Member States. Funding from the EDF was aimed mainly at the African, Caribbean, and Pacific Group of States (OACPS) and the overseas countries and territories of the EU. Accordingly, in 2019, the majority of EDF funding (72%) was allocated to countries in ‘sub-Saharan Africa’ and other countries in the region received 15% of EDF funding. Funding was also directed towards low-income countries, which constituted six of the top 10 recipients of EDF funding in 2020.
Overall, the EUI are committed to spending 0.15-0.2% of GNI on ODA in low-income countries in the short term and 0.2% of GNI on ODA to these countries by 2030; however, EU funding for low-income countries has not increased much since 2016. Between 2017-2019, funding for these countries has remained stable at an average of 20% of total bilateral ODA, however funding fell to 15% of total bilateral ODA in 2020.
Given that a large share of EU ODA is provided to neighbouring countries through the European Neighbourhood Instrument (ENI) and the Instrument for Pre-accession Assistance (IPA) much of the EU’s total ODA goes to middle-income countries (MICs). Upper-middle-incomecountries (UMICs) received 26% and lower-middle-income countries (LMICS) received 33% of the EU’s bilateral ODA in 2019, according to OECD data.
Note: From January 2021 onwards, under the 2021-2027 Multiannual Financial Framework (MFF) the Neighbourhood, Development and International Cooperation Instrument (NDICI) will merge several of the previous external financing instruments under the EU budget including the EDF and DCI.
One-quarter of bilateral aid is earmarked for multilateral organizations
While the EUI report virtually all their ODA as bilateral, they also fund other multilateral organizations through contributions that are earmarked for specific thematic or geographic priorities and are reported to the OECD as bilateral ODA. In 2020, the EUI channeled 18% of their ODA, or US$4.4 billion, as earmarked funding to multilateral organizations (DAC average: 14%).
Only a small share of the EUI’s ODA was channeled in the form of core contributions to other multilateral organizations (1%, or US$251 million in 2020). This included US$105 million to UN agencies, US$131 million to Gavi, and US$15 million to the Global Fund.
EC’s leadership is supportive of strengthening multilateral institutions, meaning that in the future multilateral funding volumes (including earmarked) may increase
Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.
For more granular and up-to-date development finance data on EUI, including information on where and in which sectors they are spending both ODA and non-ODA funds, please consult the IATI d-portal. IATI is a reporting standard and platform on which organizations and governments voluntarily publish data on their development cooperation.
The Council of the EU and European Parliament approve strategy and budgets proposed by the European Commission; EU delegations define priority sectors for bilateral cooperation with partner countries
Member states are the most crucial decision-making actors in the EU. The European Council — currently led by President Charles Michel and composed of all EU heads of state and government — meets regularly to set high-level political and budgetary priorities for the EU.
The Council of the European Union includes ministers of EU Member States, who coordinate policies and define strategic priorities for the EU. The Council meets in different configurations, depending on the issue at stake. The Foreign Affairs Council includes ministers of foreign affairs and/or development ministers from all Member States. They meet once a month and vote on legislative acts, coordinate policies, and decide on the annual budget, usually in collaboration with the European Parliament. Meetings are chaired by the EU’s High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the European Commission (HR/VP), currently Josep Borrell. The HR/VP is assisted by the European External Action Service (EEAS) to coordinate the EU’s foreign policy tools, including development assistance and humanitarian assistance.
Together with the Council, the Parliament (currently headed by President Roberta Metsola) decides on the annual EU budget, which includes funding from development instrument for 2021-2027, the Neighbourhood, Development, and International Cooperation Instrument (NDICI – Global Europe).
The European Commission is currently headed by President Ursula von der Leyen. Within the EC, the Directorate-General for International Partnerships (DG INTPA; formerly the Directorate-General for Development and International Cooperation, or DG DEVCO) is responsible for the implementation of the EU’s development policy. DG INTPA is led by the Commissioner for International Partnerships (currently Jutta Urpilainen) and by its Director-General (currently Koen Doens). Other Directorates-General involved in ODA allocation and implementation include the Directorate-General for Neighbourhood and Enlargement (DG NEAR, covering the EU’s enlargement process and the European Neighbourhood Instrument) and Directorate-General for European Civil Protection and Humanitarian Aid Operations (DG ECHO).
EU country offices (called EU delegations) are part of the EEAS structure and are responsible for programming development funding from NDICI’s geographic envelopes, together with the EC. EU delegations develop seven-year strategies with partner countries or regions regarding NDICI–Global Europe allocations. These ‘multi-annual indicative programs’ (MIPs) within NDICI – Global Europe are developed in collaboration with EU partner countries based on pre-existing national development strategies and with instructions from DG INTPA and EEAS. They define priority sectors of bilateral cooperation between the EU and the partner country and state indicative amounts allocated to each sector.
Every year, DG INTPA and EU delegations jointly prepare Annual Action Programs (AAPs) that set budget allocations and goals for each country and NDICI–Global Europe’s thematic programs. AAPs are usually adopted by the European Commission leadership during the summer following an agreement over the budget.
EU ODA comes primarily from the EU’s budget, particularly from Heading 6, as well as from the EIB
The EU’s long-term budget – the Multiannual Financial Framework (MFF) – sets political priorities and provides a framework for financial programming for a period of five to seven years. The current MFF covers 2021-2027.The MFF is divided into headings that cover broad policy areas and reflect the EU’s political priorities. Under the current MFF, external action will be financed under Heading 6: ‘Neighbourhood and the World’ (one of the headings under the MFF), which is allocated €98.4 billion (US$112.2 billion), including €85.2 billion (US$97.1 billion) for external action and, within that, €70.8 billion (US$80.7 billion) for the ‘Neighbourhood, Development, and International Cooperation Instrument – Global Europe’ (NDICI – Global Europe). The new NDICI – Global Europe consolidates several of the EUI’s previous development instruments, including the EDF and the DCI, and is now the main instrument for EU cooperation and development with partner countries. NDICI – Global Europe will also receive additional funding from EDF reflows, with an indicative allocation of €1.0 billion (US$1.1 billion).
NDICI – Global Europe’s budget breaks down into the following pillars:
1) A geographic component that will receive €53.8 billion (US$61.3 billion). Under this, the EU ‘Neighbourhood’ will receive €17.2 billion (US$19.6 billion) and ‘Sub-Saharan Africa’ will receive €26.0 billion (US$29.6 billion);
2) A thematic component comprising of global challenges, human rights and democracy, civil society organizations, and stability and peace, which will receive €5.7 billion (US$6.5 billion);
3) A rapid response component, which will receive €2.8 billion (US$3.2 billion); and
4) A flexibility cushion for emerging challenges and priorities, which will receive 8.5 billion (US$9.7 billion).
NDICI Global Europe will particularly support countries that are most in need to overcome long-term developmental challenges and will thereby contribute to achieving the international commitments and objectives that the European Union has agreed to, particularly in terms of the Sustainable Development Goals (SDGs) and the Paris Agreement.
Other external funding instruments covered by Heading 6 include:
• Humanitarian Aid instrument (€10.3 billion, or US$11.7 billion for 2021-2027), which is designed to respond to humanitarian crises outside of the EU and to provide assistance, relief, and protection to people affected by natural or manmade disasters and similar emergencies, focusing on the most vulnerable victims;
• Common Foreign and Security Policy (CFSP; €2.4 billion, or US$2.7 billion for 2021-2027), which aims to preserve peace, strengthen international security, promote international cooperation, and develop and consolidate democracy, the rule of law, respect for human rights, and fundamental freedoms;
• Pre-Accession Assistance (€12.6 billion, or US$14.4 billion for 2021-2027), through which the EU provides financial and technical support for reform in partner countries. The funding is restricted to EU accession candidates and focuses on capacity-building; and
• Overseas Countries and Territories (OCTs; including Greenland; €444 million, or US$506 million for 2021-2027), which is for external action toward 25 islands that are not sovereign countries, but depend on four EU Member States: Denmark, France, the United Kingdom, and the Netherlands. From 2021 onwards, due to UK withdrawal from the EU, only 13 OCTs linked to Denmark, France, or the Netherlands will be counted.
In December 2020, the EU adopted its new long-term budget (2021-2027 Multiannual Financial Framework (MFF). The current MFF makes €1.07 trillion (US$1.22 trillion) available for the EU budget during the next seven years. Combined with the €750.0 billion (US$854.7 billion) recovery instrument, Next Generation EU, the total financial package is €1.80 trillion (US$2.05 trillion).
Heading 6: Neighbourhood and the World spending, 2021-2027, in billions
|Neighbourhood, Development and International Cooperation Instrument (NDICI)||70.8||80.7|
|In addition, indicative use of reflows from the European Development Fund||1.0||1.1|
|Common Foreign and Security Policy (CFSP)||2.4||2.7|
|Overseas Countries and Territories (including Greenland)||0.4||0.5|
|Total Heading 6: 'Neighbourhood and the World'||98.42||112.2|
The European Commission develops the draft budget in April-May; programming runs from November to July
The EU’s annual budget process takes place within the priorities and spending limits set in the Multiannual Financial Framework (MFF). The following process is indicative of how the annual budget is usually determined.
- European Commission presents draft budget: Usually, by the end of May, the European Commission presents its annual draft budget to the European Council (Council) and the European Parliament (Parliament). This budget is developed in a closed process, without consultation from external stakeholders, and must abide by the MFF’s spending ceilings. The annual draft budget includes geographic and thematic programs within NDICI - Global Europe (see note at the end of this section).
- Council and Parliament prepare positions on draft budget: Once the European Commission has presented its draft budget, the Council prepares its position and proposals for amendments on the draft between July and September. The Council forwards its position to Parliament by mid-September; however, the committees of Parliament begin holding internal discussions on the draft budget between July and September. This includes the Committee on Development (DEVE), which delivers its opinion along with proposed budgetary amendments on funding to NDICI - Global Europe’s geographic and thematic programs, and the Budget Committee (BUDG). This period represents a key opportunity for engaging with Members of the European Parliament in the relevant committees around budget allocations to the NDICI - Global Europe.
- Parliament votes on amendments to Council’s position: Once Parliament has received the Council’s position it has 42 days to approve or amend it. The Budget Committee prepares the Parliament’s position based on the previous inputs from the thematic committees. Usually, in late October, the Parliament votes in plenary on the Council’s position, including the proposed amendments.
- Conciliation procedure between Parliament and Council: Parliament forwards the amended text to the Council. If the Council approves all amendments, the budget is considered adopted. If not, a ‘Conciliation committee’ consisting of an equal number of representatives from the Council and Parliament is convened to reach an agreement. The Conciliation Committee has 21 days to find a compromise, after which Parliament and Council must adopt the agreed budget.
Note: From January 2021 onwards, the Neighbourhood Development and International Cooperation Instrument (NDICI - Global Europe) will merge several of the previous external financing instruments under the EU budget including the Development Cooperation Instrument (DCI) and the off-budget European Development Fund (EDF). The process described above applied also to DCI, but not to EDF, which was funded directly by the EU’s member states.