Financing

From 2007, more money will be available to support relations with the EU’s European Neighbourhood partners and the Russian Federation. For the period 2007-2013, there will be €12 billion in EC funding available – an increase of 32% in real terms. Following discussions with EU Member States and the European Parliament, the Commission has on March 7th taken a decision on the breakdown of these funds, and adopted Strategy Papers and Indicative programmes covering country, regional and cross-border programmes, for the coming four years (2007-2010).

The main focus will be on country programmes, supporting partners’ implementation of their own political, governance, economic and social reform programmes. Of the €5.6 billion available for 2007-2010, 73% will be geared to support partners’ implementation of their European Neighbourhood Policy (ENP), for Russia, co-financing of the implementation of the Common Spaces Road Maps. For this reason, countries which have concluded an Action Plan and made progress in its implementation will receive substantial funding.

The second main focus is regional co-operation activities, including support for the Euro-Mediterranean Partnership and a brand new ENP scholarship scheme. A total of €827 million is available for this. In addition, cross-border cooperation will be supported, involving cooperation between local and regional authorities on both sides of the EU’s external border. €277 million (matched by an equivalent amount from the European Regional Development Fund) will be available for this.

As announced in the Commission’s recent Communication on “Strengthening the European Neighbourhood Policy”, €400 million will be used during the 2007-2010 period to support governance and to promote investment, through two new facilities (Governance Facility and a Neighbourhood Investment Fund).

In addition to ENPI grant funding, neighbouring countries are eligible, in the period 2007-13, for loan financing through the European Investment Bank up to a total of €12.4 billion.

EU Governance Facility This note intends to define the principles for implementing the Governance Facility as announced in the December 2006 Communication on Strengthening the European Neighbourhood Policy. This Facility was introduced for Mediterranean countries in 2006 and two countries benefited from an increase in their annual allocation from the last year of the MEDA budget. However, to date no equivalent mechanism has been put in place for our Eastern Neighbours. In fact, “governance” is central to the content of the Action Plans. In each Action Plan there is a specific chapter entitled “Enhanced political dialogue and reform” under which horizontal aspects of Democratic Governance are covered. In addition, governance-related elements can be found in each of the other five chapters of each Action Plans. Some examples of governance-related priorities are: introducing sectoral reforms (transport, energy, information society, environment, etc.)

European Neighbourhood Policy: Funding