European Neighbourhood Policy
4. Funding
Implementation of ENP reforms is supported through various forms of EC-funded financial and technical assistance.
The former TACIS (for eastern neighbours and Russia), MEDA (for neighbours in the southern Mediterranean) and various other financial support programmes were replaced from January 2007 onwards by a single instrument: a fund known as the European Neighbourhood and Partnership Instrument (ENPI). The new fund will provide a total of €12 billion in the 2007-2013 period – a rise of 32 percent in real terms over previous levels.
The ENPI is seen to be a much more flexible, policy-driven instrument than its predecessors. It is designed to target sustainable development and approximation to EU policies and standards - supporting the agreed priorities in the ENP Action Plans (as well as the Strategic Partnership with Russia, which was previously also covered by the TACIS programme). Funds allocated to individual country programmes will depend on their needs and absorption capacity as well as their implementation of agreed reforms (the carrot and stick approach). The main focus of the ENPI financing instrument will be on the 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 percent (€4,11 billion) will be geared to these country programmes.
Another focus area are regional cooperation activities (€827 million), including support for the Euro-Mediterranean Partnership and a new ENP scholarship scheme. Also, cross-border cooperation will be supported (€277 million), involving cooperation between local and regional authorities on both sides of the EU’s external border (this will be matched by the same amount from the European Regional Development Fund).
In addition, €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).
To complement ENPI grant funding, neighbouring countries are eligible for loan financing through the European Investment Bank, up to a total of €12.4 billion in the 2007-2013 period.
The member states have emphasized in the Strengthening the ENP, Presidency Progress Report that the increase in funding for partners under the new European Neighbourhood and Partnership Instrument is a clear sign of the Union’s enhanced commitment to the ENP policy. Providing better incentives for partners to advance on the path of reforms is seen as of key importance.