PURPOSE: to establish a Partnership Instrument for cooperation with third countries (PI) for the period 2014-2020 following External assistance: a financing instrument for cooperation with industrialised countries and territories and other high-income countries and territories .

LEGISLATIVE ACT: Regulation (EU) No 234/2014 of the European Parliament and of the Council of 11 March 2014 establishing a Partnership Instrument for cooperation with third countries.

BACKGROUND: this Regulation is placed within the framework of the new multiannual financial framework ( MFF ) 2014-2020 applicable to the Unon’s external policy and cooperation with third countries. The measures provided are the following:

Financing instrument for development cooperation (IDC) ; This Partnership Instrument (PI) for cooperation with third countries; Instrument for Pre-accession Assistance (IPA II) ; European Neighbourhood Instrument (ENI) ; Instrument for Nuclear Safety Co-operation ; Instrument contributing to stability (IS) ; Financing instrument for democracy and human rights worldwide (EIDHR) .

All of the procedures for the implementation of these instruments would be governed by specific Regulation adopted at the same time .

CONTENT: the objective of this Regulation is to establish a Partnership Instrument for cooperation with third countries to advance and promote Union interests as well as those shared with third countries.

The Partnership Instrument shall support measures that respond in an effective and flexible manner to objectives arising from the Union's bilateral, regional or multilateral relationships with third countries and shall address challenges of global concern and ensure an adequate follow-up to decisions taken at a multilateral level.

Specific objectives : the measures financed by the Partnership Instrument aim:

1. to support the Union's bilateral, regional and inter-regional cooperation partnership strategies by promoting policy dialogue and by developing collective approaches and responses to challenges of global concern ;

2. to implement the international dimension of ‘Europe2020’ ;

3. to improve access to partner country markets and boosting trade, investment and business opportunities for companies from the Union , while eliminating barriers to market access and investment, by means of economic partnerships, business and regulatory cooperation;

4. to enhance widespread understanding and visibility of the Union and of its role on the world scene by means of public diplomacy, people-to-people contacts, cooperation in educational and academic matters, think tank cooperation and outreach activities to promote the Union's values and interests.

Progress in all these areas would be evaluated by performance indicators defined in the Regulation.

Partner countries : all third countries, regions and territories (developed and developing countries which play an increasingly important role in world affairs, including in multilateral fora and global governance).

N.B.: the Commission may take into account the geographic proximity of the Union's outermost regions and overseas countries and territories at the time of the indicative programming of the funds.

Principles applicable to implementing aid : the aid granted to third countries may be implemented on the following general principles:

promotion of human rights and fundamental freedoms in the implemented actions; the application of a differentiated aid, taking into account the economic, social and political contexts of partner countries and the Union's interests in relation to those countries; a coherent EU approach to global challenges and fostering cooperation with relevant international organisations (including the United Nations); coherence and consistency with other areas of external action, EU cooperation and development; strengthening measures for the visibility of European aid through information and awareness actions; taking into account, where possible, the views of civil society organisations and local authorities.

Financial envelope : in line with the multiannual financial framework, the financial envelope for the implementation of this Instrument for cooperation shall be EUR 954 765 000 .

In addition, the promotion of the international dimension of higher education would alone benefit by 1.68 billion EUR from different instruments of external action funding:

the financing instrument for cooperation and development, the European Neighbourhood Instrument, the Instrument of Pre-Accession Assistance; the Partnership Instrument.

This amount would be allocated to actions related to mobility for learning purposes to destination or from ERAMUS+ programme partner countries, and the cooperation and political dialogue with authorities, institutions and organisations of these countries.

The actions falling within the scope of the ERASMUS+ programme would be funded by the Partnership Instrument only insofar as they are not eligible for funding under other instruments of the EU external policy.

Programming and indicative allocation of funds : the Regulation sets the framework for the indicative allocation of funds. To this effect, multi-annual indicative programmes shall be adopted by the Commission in accordance with the examination procedure, setting out the Union's strategic and/or mutual interests and priorities, the specific objectives and expected results, the priority areas selected for financing by the Union and the indicative allocation of funds.

The indicative programmes may be amended by the Commission by delegated acts after mid-term review (no later than 31 March 2018) of the implementation of this Regulation.

Annexes : the Regulation includes an Annex precisely defining the thematic priorities of the aid by main objectives .

Dialogue with the European Parliament : measures have been provided in a Commission statement in which the latter undertakes to inform the European Parliament of actions taken in the framework of a strategic dialogue.

Suspension of assistance granted : a unilateral Parliament declaration said the financial instruments applicable to the Union’s external policy have no provision for the suspension of aid in the case of non-compliance with democratic principles by partner countries. The Parliament states that any amendment of provisions in the area should intervene via the ordinary legislative procedure involving the European Parliament.

ENTRY INTO FORCE: 16.03.2014. The Regulation shall apply from 01.01.2014 to 31.12.2020.

DELEGATED ACTS: the Commission may adopt delegated acts to amend the thematic priorities as laid down in the Annex to this Regulation. Following the publication of the mid-term review report on the implementation of the Regulation (by 31 March 2018). The power to adopt delegated acts shall be conferred on the Commission for the period of validity of this Regulation . The European Parliament or the Council may object to a delegated act within a period of two months from the date of notification (this period can be extended for two months). If the European Parliament or the Council make objections, the delegated act will not enter into force.

The European Parliament adopted by 621 votes to 34 with 23 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council establishing a Partnership Instrument for cooperation with third countries (PI II).

Parliament adopted its position in first reading following the ordinary legislative procedure. The amendments adopted in plenary are the result of a compromise between Parliament and Council.

General objective : the objective of the PI II is to promote and defend the interests of the EU as well as those shared with other countries. The Partnership Instrument is intended to support measures that respond effectively and flexibly to objectives arising from bilateral, regional and multilateral relations with the EU and with third countries, addressing global challenges or which will allow an adequate follow-up to decisions taken at multilateral level.

Specific objectives and scope: a series of new specific objectives have been added to the Programme such as:

· fighting climate change;

· supporting the implementation of the external dimension of ‘Europe 2020;

· improving access to third country markets;

· strengthening contacts between parties.

The scope has been clarified to state that it is in the Union's interest to deepen its relations and dialogue with countries where the Union has a strategic interest in promoting links, especially developed and developing countries which play an increasingly important role in world affairs, including in global governance, foreign policy, international economy, multilateral fora.

Partner countries : the scope of this Regulation should be worldwide.

The Commission may take into account the geographic proximity of the Union's outermost regions and overseas countries and territories in its cooperation with third countries.

Visibility of EU aid : in order to ensure the visibility of the Union's assistance towards the citizens of the beneficiary countries and those of the Union, there should be, where appropriate, targeted communication and information by adequate means.

Performance indicators: progress in these areas would be assessed through performance indicators defined in the draft Regulation

General framework of assistance : the support should be granted in accordance with the general framework defined by the external policy of the EU and the relevant texts of the European Parliament in this area. Assistance should also be guided by the values founding the EU, respect for democracy and human rights and should be differentiated according to the needs of each beneficiary. To this end, a series of thematic objectives were defined in the Annex to future regulation . Multi-annual indicative programmes have also been established with specific priorities under which the geographical proximity of the EU with third countries, regions and territories should be taken into account.

Impact of civil society : the objectives of this Regulation should be pursued with an appropriate involvement of civil society organisations.

Implementation: provisions have been included to clarify the technical implementation of the PI II in terms of its strategic planning and programming.

Financial envelope : in accordance with the agreement on the Financial Framework, the financial envelope for the implementation of the PI II Regulation is set at EUR 954 765 000.

There are specific provisions setting out the percentage of funds in multi-annual indicative programmes and the adoption of the programmes. Actions within the scope of ‘Erasmus +’ will only be funded by the Partnership Instrument in so far as they are not eligible for funding under other external action instruments, and complement or reinforce other initiatives under the Regulation.

Optimisation of resources : the Union should seek the most efficient use of available resources in order to optimise the impact of its external action. This should be achieved through coherence and complementarity between Instruments for external action, as well as the creation of synergies between the present Instrument, other Instruments for external action and other policies of the Union.

Delegated acts : the Commission shall be empowered to adopt delegated acts in accordance with Article 290 TFEU to amend the thematic priorities laid down inthe Annex to the Regulation. Based upon the recommendations contained in the mid-term review report for IP II, the Commission shall adopt a delegated act amending the Annex by 31 March 2018.

Annexes : the future regulation contains an annex, which defines the thematic priorities for assistance. It should be noted that the draft Regulation as amended is accompanied by a series of unilateral declarations including:

a European Parliament statement on the suspension of assistance granted under the financial instruments for foreign policy, particularly in cases where a beneficiary country fails to observe the basic principles enunciated in the respective instrument and notably the principles of democracy. (It is stated that the European Parliament considers that any suspension of assistance under these instruments would modify the overall financial scheme agreed under the ordinary legislative procedure. As a co-legislator, the European Parliament is therefore entitled to fully exercise its prerogatives in that regard, if such a decision is to be taken); a Commission declaration on the strategic dialogue with the European Parliament prior to its programming.

The Committee on Foreign Affairs adopted the report by Antonio LÓPEZ-ISTÚRIZ WHITE (EPP, ES) on the proposal for a regulation of the European Parliament and of the Council establishing a Partnership Instrument for cooperation with third countries (PI).

The Committee on International Trade, exercising their prerogatives as associated committees under Rule 50 of Parliament’s Rules of Procedure, was also consulted and gave an opinion on the report.

The committee recommended that the European Parliament’s position at first reading, following the ordinary legislative procedure, should amend the Commission proposal.

The main amendments were as follows:

General objective : the objective of the PI II is to promote and defend the interests of the EU as well as those shared with other countries. The Partnership Instrument is intended to support measures that respond effectively and flexibly to objectives arising from bilateral, regional and multilateral relations with the EU and with third countries, encouraging political dialogue and an inclusive system of global governance or ensure adequate monitoring of decisions taken at the multilateral level

Specific objectives and scope : a series of new specific objectives have been added to the Programme such as:

fighting climate change; enhancing international trade; strengthening contacts between parties.

The scope has been clarified to state that it is in the Union's interest to deepen its relations and dialogue with countries where the Union has a strategic interest in promoting links, especially developed and developing countries which play an increasingly important role in world affairs, including in global governance, foreign policy, international economy, multilateral fora.

Partner countries : the scope of this Regulation should be worldwide.

Visibility of EU aid : in order to ensure the visibility of the Union's assistance towards the citizens of the beneficiary countries and those of the Union, there should be, where appropriate, targeted communication and information by adequate means.

Performance indicators : progress in these areas would be assessed through performance indicators defined in the draft Regulation

General framework of assistance : the support should be granted in accordance with the general framework defined by the external policy of the EU and the relevant texts of the European Parliament in this area. Assistance should also be guided by the values founding the EU, respect for democracy and human rights and should be differentiated according to the needs of each beneficiary. To this end, a series of thematic objectives were defined in the Annex to future regulation. Multi-annual indicative programmes have also been established with specific priorities under which the geographical proximity of the EU with third countries, regions and territories should be taken into account.

Impact of civil society : the objectives of this Regulation should be pursued with an appropriate involvement of civil society organisations.

Implementation : provisions have been included to clarify the technical implementation of the PI II in terms of its strategic planning and programming.

Financial envelope : in accordance with the agreement on the Financial Framework, the financial envelope for the implementation of the PI II Regulation is set at EUR 954 765 000. Multi-annual indicative programmes may provide for an amount of funds, not exceeding 5% of the total amount.

Part of this amount would also be dedicated to transnational mobility with third countries including mobility actions under the ERASMUS+ programme if necessary.

It is also stated that the Union should seek the most efficient use of available resources in order to optimise the impact of its external action. This should be achieved through coherence and complementarity between Instruments for external action.

Delegated acts : the power to adopt acts in accordance with Article 290 of the Treaty of the Functioning of the European Union should be delegated to the Commission in respect of the detailed areas of cooperation defined in the Annex, adoption of multi-annual indicative programmes and the indicative allocations per programme set out in Annex Ia.

Following the publication of the Mid-term report and based upon the recommendations contained in the mid-term review report, the Commission shall adopt a delegated act amending Annex II to this Regulation by 31 March 2018 .

Annexes : the future regulation contains an annex which defines the thematic priorities for assistance. It should be noted that the draft Regulation as amended is accompanied by a series of unilateral declarations including:

a European Parliament statement on the suspension of assistance granted under the financial instruments for foreign policy, particularly in cases where a beneficiary country fails to observe the basic principles enunciated in the respective instrument and notably the principles of democracy. (It is stated that the European Parliament considers that any suspension of assistance under these instruments would modify the overall financial scheme agreed under the ordinary legislative procedure. As a co-legislator, the European Parliament is therefore entitled to fully exercise its prerogatives in that regard, if such a decision is to be taken);

a Commission declaration on the strategic dialogue with the European Parliament prior to its programming.

PURPOSE: to establish a new Partnership instrument for cooperation with third countries 2014-2020 in the framework of the reform of the EU external action financial instruments and following on from the financing instrument for cooperation with industrialised countries and territories and other high-income countries and territories .

PHILOSOPHY AND ACTION PLAN FOR EXTERNAL AID 2014-2020: what happens outside the borders of the EU can and does directly affect the prosperity and security of EU citizens. It is therefore in the interest of the EU to be actively engaged in influencing the world around us, including through the use of financial instruments. The Lisbon Treaty marks, in this regard, a new departure in the EU’s relations with the rest of the world.

The EU's engagement needs to be tailored to individual circumstances . Its partners range from development economies to the least developed countries in need of specific assistance from the EU.

In general, the overall objective for external action for the period 2014-2020 may be summarised as follows:

long-term commitment to establishing an area of stability, prosperity and democracy in its own neighbourhood; facilitating the EU's engagement with third countries on issues that are of global concern, such as climate change, environmental protection, irregular migration and regional instabilities, and allowing the EU to respond rapidly and effectively to natural and manmade disasters around the world.

A major rationalisation of the instruments took place in 2003 and has begun to deliver more effective results. The Commission does not consider that another major alteration of the legislative architecture is necessary for the next MFF period , although some improvements are being proposed and the overall investment is being stepped up.

The Commission proposes to allocate EUR 70 billion for the 2014-2020 period for external instruments broken down as follows:

Financing instrument for development cooperation This Partnership instrument for cooperation with third countries Instrument for Pre-accession Assistance (IPA II) European Neighbourhood Instrument Instrument for nuclear safety cooperation Instrument for Stability Financing instrument for the promotion of democracy and human rights worldwide

In parallel and for the first time, the Commission proposes a single horizontal regulation establishing common rules and procedures for the implementation of the Union’s instruments for external action.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

BACKGROUND: this proposal for a Partnership Instrument replaces the financing Instrument for Cooperation with Industrialised and other high income countries and territories (ICI), which came into force in 2007, and which has been the EU’s main vehicle for collaboration with developed countries. The ICI has proved an effective toolbox for providing a differentiated and appropriate response to widen and deepen the cooperation with 17 countries ( industrialised countries and high-income territories in North America, the Asia-Pacific region and the Gulf region). It has been recently extended to developing countries with the adoption of the ICI+ proposal. However, as it is due to expire by the end of 2013; a new financial instrument is needed for the period 2014-2020.

Moreover, since the ICI Regulation entered into force, the EU has seen in particular the emergence of economies such as India, China and Brazil which are playing an increasingly prominent role in the international economy and trade, in multilateral fora (UN and G20) and in addressing challenges of global concern. While development and poverty alleviation remain a key concern, these countries are progressively leaving behind the status of developing nations.

The EU has als o developed broad based agreements with key partners and emerging economies to address bilateral issues and matters of global concern. Implementation of these instruments (i.e.: as agreements, declarations, action plans etc) requires a dedicated financing instrument so that the EU has the means to promote its interests effectively worldwide and to deal with global issues wherever the need arises.

The EU does not currently possess a genuine instrument that would allow it to co-operate with new emerging economies on issues related to advancing core EU interests and on common challenges of global concern (such as climate change for instance or the need to promote sustainable development at all levels).

The proposed Partnership Instrument is designed to overcome this limitation of the EU’s ability to engage internationally in the most effective way. It would fill the gap described above and, in particular, allow the EU to pursue agendas beyond development cooperation with global players, but also to defend core EU interests with any other partner country as the need arises. It could also underpin new relationships with countries graduating from bilateral development assistance.

IMPACT ASSESSMENT: the Commission examined 4 policy options:

Option 0 : “Zero Option”: this implies that assistance under the current ICI instrument would be phased out as of 31 December 2013. Option 1 : “No change”: maintaining the status quo , the ICI Regulation would cover only traditional industrialised and high- income countries (.i.e. 17 countries) and the DCI Regulation would remain the only financial instrument, focused on development cooperation, to cover cooperation with some countries of great importance in terms of economics, demographics, and politics. Option 2 : “Maintain ICI as such and amend DCI”: this option would maintain the ICI in its current form and insert a window for economic, financial and technical cooperation of a non developmental nature with third countries within the DCI. Option 3 : “Table a new Instrument building on ICI/ICI+”: this option would build on the ICI and ICI+ proposal to provide a new Instrument with a global reach.

After careful evaluation, neither discontinuing the ICI nor maintaining the status quo were deemed to be politically viable solutions. Limiting expenditure exclusively to action linked to poverty alleviation or maintaining this sole focus for cooperation with emerging economies would artificially limit the EU’s external action and neglect core EU interests.

The option of amending the Development Cooperation Instrument to allow expenditure not related to official development assistance would have the advantage of geographical coherence (one instrument per country), but the difficulties of managing an instrument with two very different objectives were considered a serious handicap.

By process of elimination, the preferred option is that of creating a new Instrument with a global reach ( option 3 ) as this would allow for a clear distinction with Development Cooperation money and respect the Commission’s intention to increase coherence and consistency through a major simplification of the Instruments.

LEGAL BASIS: Articles 207(2), 209(1) and 212(2) of the Treaty on the Functioning of the European Union (TFEU).

CONTENT: the proposed R egulation aims to establish a Partnership Instrument for cooperation with third countries to advance and promote EU and mutual interests. The Partnership Instrument shall support measures that respond in an effective and flexible manner to objectives arising from the Union's bilateral, regional or multilateral relationships with third countries and address challenges of global concern.

Specific objectives : the measures to be financed under this Instrument shall reflect the following specific Union objectives:

implementing the international dimension of the “Europe 2020” strategy by supporting Union’s bilateral, regional and inter-regional cooperation partnership strategies, by promoting policy dialogues and by developing collective approaches and responses to challenges of global concern such as energy security, climate change and environment. This objective shall be measured by the uptake of the “Europe 2020” policies and objectives by key partner countries; improving market access and developing trade, investment and business opportunities for European companies by means of economic partnerships and business and regulatory cooperation. This objective shall be measured by the Union’s share in foreign trade with key partner countries and by trade and investments flows to partner countries specifically targeted by actions, programmes and measures under this Regulation; enhancing widespread understanding and visibility of the Union and its role on the world scene by means of public diplomacy, education/academic cooperation and outreach activities to promote Union’s values and interests.

General principles :

to promote, develop and consolidate the principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law on which it is founded by means of dialogue and cooperation with third countries; to enhance the impact of the Union’s assistance, a differentiated and flexible approach shall be pursued, where appropriate, in designing cooperation with partner countries to take account of their economic, social and political contexts as and also of the Union’s specific interests, policy priorities and strategies; to promote a multilateral approach to global challenges and shall foster cooperation with international or regional organisations and bodies, including international financial institutions, United Nations agencies, funds and programmes, OECD, and the Group of Twenty Finance Ministers and Central Bank Governors (G20) and other bilateral donors; to ensure coherence and consistency with other areas of its external action, in particular the Development Cooperation Instrument for developing countries, and with other relevant Union’s policies when formulating policy, strategic planning and programming and implementing measures; to defend the Union’s specific interests, policy priorities and strategies.

Third countries concerned : a ll third countries, regions and territories may be eligible for cooperation under this Regulation. However, this Regulation shall primarily support cooperation measures with developed and developing countries which play an increasingly prominent role in the international economy and trade, in multilateral fora, in global governance and in addressing challenges of global concern and where the Union has significant interests.

Areas of cooperation : detailed areas of cooperation to be pursued by the Union’s assistance under this Regulation are listed in the Annex. The Commission shall be empowered to adopt delegated acts to amend or supplement the Annex.

Programming and Indicative allocation of funds : the multi-annual indicative programmes shall set out the Union’s strategic and/or mutual interests and priorities, the specific objectives and expected results. For countries or regions for which a Joint Framework Document, laying down a comprehensive Union strategy has been established, the multi-annual indicative programmes shall be based on this document.

The multiannual indicative programmes shall also set out the priority areas selected for financing by the Union and shall outline the indicative financial allocation of funds.

Coherence and complementarity : coherence and complementarity with other external action geographical instruments, in particular the Development Cooperation Instrument, will be taken into account throughout the programming stage while integrating the principles of differentiation and concentration.

Implementation : the implementation has been greatly simplified as an Article stipulates that the decision shall be implemented in accordance with the future Regulation establishing common implementation rules for external relations financing instruments.

BUDGETARY IMPLICATIONS: the European Commission in its Communication of 29 June 2011 entitled “A Budget for Europe 2020” proposed allocating to the Partnership Instrument a total amount of EUR 1 131 million , at current prices, over the period 2014-2020.

DELEGATED ACTS: in order to adapt the scope of this Regulation to the rapidly evolving reality in third countries, the power to adopt acts in accordance with Article 290 of the Treaty of the Functioning of the European Union should be delegated to the Commission in respect of the detailed areas of cooperation defined in the Annex. It is of particular importance that the Commission should carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing-up delegated acts, should ensure simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.

PURPOSE: to establish a new Partnership instrument for cooperation with third countries 2014-2020 in the framework of the reform of the EU external action financial instruments and following on from the financing instrument for cooperation with industrialised countries and territories and other high-income countries and territories .

PHILOSOPHY AND ACTION PLAN FOR EXTERNAL AID 2014-2020: what happens outside the borders of the EU can and does directly affect the prosperity and security of EU citizens. It is therefore in the interest of the EU to be actively engaged in influencing the world around us, including through the use of financial instruments. The Lisbon Treaty marks, in this regard, a new departure in the EU’s relations with the rest of the world.

The EU's engagement needs to be tailored to individual circumstances . Its partners range from development economies to the least developed countries in need of specific assistance from the EU.

In general, the overall objective for external action for the period 2014-2020 may be summarised as follows:

long-term commitment to establishing an area of stability, prosperity and democracy in its own neighbourhood; facilitating the EU's engagement with third countries on issues that are of global concern, such as climate change, environmental protection, irregular migration and regional instabilities, and allowing the EU to respond rapidly and effectively to natural and manmade disasters around the world.

A major rationalisation of the instruments took place in 2003 and has begun to deliver more effective results. The Commission does not consider that another major alteration of the legislative architecture is necessary for the next MFF period , although some improvements are being proposed and the overall investment is being stepped up.

The Commission proposes to allocate EUR 70 billion for the 2014-2020 period for external instruments broken down as follows:

Financing instrument for development cooperation This Partnership instrument for cooperation with third countries Instrument for Pre-accession Assistance (IPA II) European Neighbourhood Instrument Instrument for nuclear safety cooperation Instrument for Stability Financing instrument for the promotion of democracy and human rights worldwide

In parallel and for the first time, the Commission proposes a single horizontal regulation establishing common rules and procedures for the implementation of the Union’s instruments for external action.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

BACKGROUND: this proposal for a Partnership Instrument replaces the financing Instrument for Cooperation with Industrialised and other high income countries and territories (ICI), which came into force in 2007, and which has been the EU’s main vehicle for collaboration with developed countries. The ICI has proved an effective toolbox for providing a differentiated and appropriate response to widen and deepen the cooperation with 17 countries ( industrialised countries and high-income territories in North America, the Asia-Pacific region and the Gulf region). It has been recently extended to developing countries with the adoption of the ICI+ proposal. However, as it is due to expire by the end of 2013; a new financial instrument is needed for the period 2014-2020.

Moreover, since the ICI Regulation entered into force, the EU has seen in particular the emergence of economies such as India, China and Brazil which are playing an increasingly prominent role in the international economy and trade, in multilateral fora (UN and G20) and in addressing challenges of global concern. While development and poverty alleviation remain a key concern, these countries are progressively leaving behind the status of developing nations.

The EU has als o developed broad based agreements with key partners and emerging economies to address bilateral issues and matters of global concern. Implementation of these instruments (i.e.: as agreements, declarations, action plans etc) requires a dedicated financing instrument so that the EU has the means to promote its interests effectively worldwide and to deal with global issues wherever the need arises.

The EU does not currently possess a genuine instrument that would allow it to co-operate with new emerging economies on issues related to advancing core EU interests and on common challenges of global concern (such as climate change for instance or the need to promote sustainable development at all levels).

The proposed Partnership Instrument is designed to overcome this limitation of the EU’s ability to engage internationally in the most effective way. It would fill the gap described above and, in particular, allow the EU to pursue agendas beyond development cooperation with global players, but also to defend core EU interests with any other partner country as the need arises. It could also underpin new relationships with countries graduating from bilateral development assistance.

IMPACT ASSESSMENT: the Commission examined 4 policy options:

Option 0 : “Zero Option”: this implies that assistance under the current ICI instrument would be phased out as of 31 December 2013. Option 1 : “No change”: maintaining the status quo , the ICI Regulation would cover only traditional industrialised and high- income countries (.i.e. 17 countries) and the DCI Regulation would remain the only financial instrument, focused on development cooperation, to cover cooperation with some countries of great importance in terms of economics, demographics, and politics. Option 2 : “Maintain ICI as such and amend DCI”: this option would maintain the ICI in its current form and insert a window for economic, financial and technical cooperation of a non developmental nature with third countries within the DCI. Option 3 : “Table a new Instrument building on ICI/ICI+”: this option would build on the ICI and ICI+ proposal to provide a new Instrument with a global reach.

After careful evaluation, neither discontinuing the ICI nor maintaining the status quo were deemed to be politically viable solutions. Limiting expenditure exclusively to action linked to poverty alleviation or maintaining this sole focus for cooperation with emerging economies would artificially limit the EU’s external action and neglect core EU interests.

The option of amending the Development Cooperation Instrument to allow expenditure not related to official development assistance would have the advantage of geographical coherence (one instrument per country), but the difficulties of managing an instrument with two very different objectives were considered a serious handicap.

By process of elimination, the preferred option is that of creating a new Instrument with a global reach ( option 3 ) as this would allow for a clear distinction with Development Cooperation money and respect the Commission’s intention to increase coherence and consistency through a major simplification of the Instruments.

LEGAL BASIS: Articles 207(2), 209(1) and 212(2) of the Treaty on the Functioning of the European Union (TFEU).

CONTENT: the proposed R egulation aims to establish a Partnership Instrument for cooperation with third countries to advance and promote EU and mutual interests. The Partnership Instrument shall support measures that respond in an effective and flexible manner to objectives arising from the Union's bilateral, regional or multilateral relationships with third countries and address challenges of global concern.

Specific objectives : the measures to be financed under this Instrument shall reflect the following specific Union objectives:

implementing the international dimension of the “Europe 2020” strategy by supporting Union’s bilateral, regional and inter-regional cooperation partnership strategies, by promoting policy dialogues and by developing collective approaches and responses to challenges of global concern such as energy security, climate change and environment. This objective shall be measured by the uptake of the “Europe 2020” policies and objectives by key partner countries; improving market access and developing trade, investment and business opportunities for European companies by means of economic partnerships and business and regulatory cooperation. This objective shall be measured by the Union’s share in foreign trade with key partner countries and by trade and investments flows to partner countries specifically targeted by actions, programmes and measures under this Regulation; enhancing widespread understanding and visibility of the Union and its role on the world scene by means of public diplomacy, education/academic cooperation and outreach activities to promote Union’s values and interests.

General principles :

to promote, develop and consolidate the principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law on which it is founded by means of dialogue and cooperation with third countries; to enhance the impact of the Union’s assistance, a differentiated and flexible approach shall be pursued, where appropriate, in designing cooperation with partner countries to take account of their economic, social and political contexts as and also of the Union’s specific interests, policy priorities and strategies; to promote a multilateral approach to global challenges and shall foster cooperation with international or regional organisations and bodies, including international financial institutions, United Nations agencies, funds and programmes, OECD, and the Group of Twenty Finance Ministers and Central Bank Governors (G20) and other bilateral donors; to ensure coherence and consistency with other areas of its external action, in particular the Development Cooperation Instrument for developing countries, and with other relevant Union’s policies when formulating policy, strategic planning and programming and implementing measures; to defend the Union’s specific interests, policy priorities and strategies.

Third countries concerned : a ll third countries, regions and territories may be eligible for cooperation under this Regulation. However, this Regulation shall primarily support cooperation measures with developed and developing countries which play an increasingly prominent role in the international economy and trade, in multilateral fora, in global governance and in addressing challenges of global concern and where the Union has significant interests.

Areas of cooperation : detailed areas of cooperation to be pursued by the Union’s assistance under this Regulation are listed in the Annex. The Commission shall be empowered to adopt delegated acts to amend or supplement the Annex.

Programming and Indicative allocation of funds : the multi-annual indicative programmes shall set out the Union’s strategic and/or mutual interests and priorities, the specific objectives and expected results. For countries or regions for which a Joint Framework Document, laying down a comprehensive Union strategy has been established, the multi-annual indicative programmes shall be based on this document.

The multiannual indicative programmes shall also set out the priority areas selected for financing by the Union and shall outline the indicative financial allocation of funds.

Coherence and complementarity : coherence and complementarity with other external action geographical instruments, in particular the Development Cooperation Instrument, will be taken into account throughout the programming stage while integrating the principles of differentiation and concentration.

Implementation : the implementation has been greatly simplified as an Article stipulates that the decision shall be implemented in accordance with the future Regulation establishing common implementation rules for external relations financing instruments.

BUDGETARY IMPLICATIONS: the European Commission in its Communication of 29 June 2011 entitled “A Budget for Europe 2020” proposed allocating to the Partnership Instrument a total amount of EUR 1 131 million , at current prices, over the period 2014-2020.

DELEGATED ACTS: in order to adapt the scope of this Regulation to the rapidly evolving reality in third countries, the power to adopt acts in accordance with Article 290 of the Treaty of the Functioning of the European Union should be delegated to the Commission in respect of the detailed areas of cooperation defined in the Annex. It is of particular importance that the Commission should carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing-up delegated acts, should ensure simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.