In May 2018, the European Commission proposed to increase the budget dedicated to the EU’s external action (2) while simplifying its implementation. Thus, the EU’s external action budget should be increased by 20% and various existing aid instruments should be merged into a single instrument: the “International Cooperation, Neighborhood and Development Instrument (NDICI)”, integrating the European Development Fund, currently outside the EU budget.
The current outlook “could translate into new procurement and subsidy opportunities for economic actors in the EU’s immediate neighborhood, i.e. the Balkans, and Turkey in the East, the Maghreb in the South as well as the rest of Africa and the so-called “least developed” countries.
Sectoral priorities would be security, migration, climate change and human rights.
It is advisable to remain cautious because all this remains to be confirmed. The EU budget for the period 2012-2017 (the so-called multiannual financial framework or MFF) is currently being negotiated between the Commission, the European Council and the newly elected European Parliament. The final decision must be taken by the European Council, acting unanimously, with the consent of the European Parliament. However, given the current political context (strong increase of Eurosceptics in the last European Parliament elections) and the financial implications of the United Kingdom’s withdrawal from the EU, the adoption of the next EU budget looks complicated.
(1) Sources : https://ec.europa.eu/commission/sites/beta-political/files/euco-budget-booklet-june2018_fr.pdf et http://www.europarl.europa.eu/thinktank/fr/document.html?reference=EPRS_BRI%282019%29644173
(2) The “EU’s external action” covers the EU’s political and diplomatic relations with non-member states, in particular with regard to EU accession, humanitarian aid, the common security policy and development cooperation
Euprolink.eu will report on the next step, namely the European Council meeting on 13 and 14 December 2019, at which the amount of the multiannual budget, the allocation for each budget heading and the sources of funding will be discussed.
In a context of great pressure on national budgets and particularly after the sovereign debt crisis of 2006-2007, States are finding it increasingly difficult to justify development aid to their public opinion.
At the same time, mixed mechanisms have multiplied to stimulate entrepreneurship and investment in several countries or areas considered at risk by private investors.
What are mixed mechanisms ? They are financial (combinations of grants and loans) and non-financial (technical assistance, technology transfer) instruments that combine both public and private funds.
Example of a mixed mechanism: The EU External Investment Plan, which entered into force in 2016, is an emblematic example of a mixed mechanism. It finances many projects in the fields of renewable energy, microenterprise and SME financing, sustainable agriculture, sustainable cities and digitization for sustainable development.
Euprolink.eu take on this topic
A public contract is a contract by which the administration pays a contractor a price to acquire a supply (e.g. office equipment, vehicles, etc.), a service (e.g. technical assistance, consultancy, etc.) or has works carried out (roads, bridges, urban infrastructure, etc.).
A grant is a gift, in other words a donation of money by which the administration finances part of the costs of an action that contributes to the implementation of a given policy. For example, funding the training of journalists in an authoritarian country helps to support the pluralist press and, more broadly, to support civil society and thus contributes to the promotion of the EU’s democratic values.
As can be seen, the main criterion is the realisation of a profit by the contractor. If accepted in the case of public procurement, the award of a grant must in principle not give rise to the realisation of a profit.