European Forum

EU pledges more funding as it unveils revised Neighborhood Policy

On 25 May the European Union has pledged an additional 1.242 billion euros (USD 1.746 billion) to countries in its immediate neighborhood over the next two years, but is tying aid to the pace of democratic reforms. The pledges came in the EU's revised Neighborhood Policy, presented today in Brussels.

The new money comes on top of the 5.7 billion euros for the upcoming two years that the EU will provide to its 16 neighbors in the southern Mediterranean as well as the countries in Eastern Europe that still have not obtained EU candidate or potential candidate status. Apart from financial support, the neighborhood policy offers closer political cooperation in a number of areas.

Its review comes in response to the revolutionary changes sweeping the Arab world but it is also intended to influence Brussels' approach to Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine. The buzzword of the review is "more for more," stating that "the more and the faster a country progresses in its internal reforms, the more support it will get from the EU.” For recalcitrant states, the approach could be described as "less for less." The document promises that "for countries where reform has not taken place, the EU will reconsider or even reduce funding." The idea is also that each partner country should have a more tailor-made relationship with the EU, with a limited number of short- and medium-term priorities instead of a comprehensive reform program. More and precise benchmarks and a clearer plan for what specific actions that will be taken are also in the pipeline.

New Focus
The new European Neighborhood Policy focuses on three areas: democracy building, economic development, and the strengthening of the two regional dimensions of the neighborhood, including the Eastern Partnership for the six post-Soviet countries. To boost democracy, Brussels proposes the establishment of a "European Endowment for Democracy" that will support political actors striving for democratic change in their respective countries. The EU will also be ready to increase its involvement in formats where it is not yet represented such as the Organization for Security and Cooperation in Europe's (OSCE) Minsk Group, which deals with the frozen conflict in the Azerbaijani breakaway region of Nagorno-Karabakh.

Trade and Economy
On the economic front, countries willing to reform will be offered an "enhanced investment protection scheme" that will provide legal security to investors in the countries to the east and south of the EU. The paper also suggests the use of a Macro-Financial Assistance (MFA) instrument "to assist partner countries to address short-term balance-of-payments difficulties." With only Ukraine so far negotiating a Deep and Comprehensive Free Trade Area (DCFTA) with the EU, Brussels will offer trade concessions in certain sectors for other countries that are not yet ready to embark on such negotiations. In an attempt to increase mobility, the EU suggests a "Common Knowledge and Innovation Space" which would increase exchanges for students and academics and improve cooperation in research and innovation.

Source: RFE/RL, europa.eu