1. The Future Approach to EU Budget Support Structured Dialogue Meeting 9 th /10 th November 2011 Lars Wilke, DG DEVCO A2 Economic Analysis, Public Finance, and Budget Support

2. Communication- Outline 1.What is Budget Support, and Why 2.Lessons learnt 3.A Modern Approach to Budget Support 4.Transparency and Accountability 5.Way forward

3. What is Budget Support, and Why  BS as package: Policy dialogue, financial transfers, performance assessment and capacity building  Means of delivering better aid (not an end in itself)  Most suitable form of aid consistent with aid effectiveness agenda  Green Paper October 2010 – Wide consultation process of stakeholders, including civil society organisations and partner countries.  In this Communication, the Commission sets out a new policy on budget support and puts forward policy proposals for an EU coordinated approach

4. Lessons Learned Positive experiences  OECD-DAC evaluations  Encouraging results from new pilot evaluation methodology – Tunisia, Mali and Zambia  Budget Support and MDG performance Scope for Improvement  Court of Auditor findings and recommendations  Calls for greater coherence and consistency of EU support  Need for more transparency and accountability

5. A modern approach to budget support Continued importance of budget support instrument Stronger link with fundamental values of the EU (human rights, democracy and rule of law) Greater differentiation of budget support operations, allowing the EU to respond better to the political, economic and social context of the partner country Strengthened eligibility criteria and more rigorous assessment; new eligibility criterion on budget transparency Stronger focus on accountability and transparency Strengthened risk management framework Continued emphasis on results, performance tranches, government ownership and predictability Strengthened EU Coordination

6. Transparency and accountability  Strengthening openness, transparency and accountability of the budget process in partner countries  Supporting a participatory budget support approach  Integrating programmes to support national legislative and oversight bodies, including CSOs  Increasing transparency by publishing relevant information on budget support financing agreements and performance reviews

7. Conclusions and Way Forward Communication seeks to  Make budget support more efficient and effective in delivering development results  Equip the EU and Member States with an “EU Coordinated Approach” on budget support New guidelines to reflect guiding principles Endorsement of the communication by Council Conclusions in Mai 2012