Commission to further untie Community aid

Commission adopts proposals to further untie Community aid The European Commission has adopted a Communication entitled "Untying: Enhancing the effectiveness of aid" containing proposals to untie all Community managed aid for developing countries. In particular, the Communication advocates a complete untying of food aid and food aid transport, which are currently excluded from existing agreements, and proposes to introduce these elements in the future re-negotiations of the Food Aid Convention.

Commenting on the proposals, Commissioner for Development and Humanitarian Aid, Poul Nielson, stated, "The debate on untying aid has long been at the center of discussions on development policy. It is generally accepted that untying of aid is an important factor in improving both the effectiveness and coherence of pro-poor development policy. Community aid has been untied to a high degree for more than 25 years. This Communication is significant because we are proposing to Member States to go even further than the Recommendation of the Organisation for Economic Co-operation and Development (OECD). It is essential however that other donors follow this example and we expect them to do so."

At the OECD Development Assistance Committee (DAC) High Level meeting in April 2001, the Commission committed itself to implement the spirit and objectives of the DAC Recommendation on untying aid. Furthermore, the conclusions of the European Council of Barcelona of March 2002 confirmed the willingness of the European Union continue to speed up the discussion on further untying between the granting of Development Assistance and the purchase of goods and services procured by means of that aid. In this Communication, the Commission is proposing, subject to the agreement of the recipient country and reciprocity from other donors, the full untying of Community aid. This proposal not only respects the spirit of the DAC Recommendation; it actually goes beyond it.

The basis for the Commission's approach is that untying aid is an important measure in terms of enhancing the effectiveness of aid. The Communication goes further than the agreed international consensus of the Development Assistance Committee (DAC) of the OECD by proposing the untying of all Community Aid for all developing countries and for all donors subject to the agreement of the recipient country and reciprocity by other donors. These conditions are in line with the concepts of ownership and multilateral discipline. In order to promote regional integration and local capacities, the access of developing countries to regional programmes would in principle be limited to the countries of the region concerned. It also puts the partner country at the center of the process and advocates an intelligent use of the concept in favor of regional integration and capacity building.

The Communication is split into four parts. The first two parts present the Commission's approach to the untying of aid and address the state of play regarding the untying of Community Aid. The third and fourth parts analyze the issues linked to the untying of the Member States' bilateral aid and ends with concrete recommendations, including the proposal to completely untie food aid and food aid transport at international level.

On the question of the untying of Member States' bilateral aid, the Communication recalls that the rules of the internal market apply to the Member States official development assistance. It also clarifies where tied bilateral aid may be in breach of Community law, in particular with regard to competition law and public procurement directives.

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