The European Community has undertaken considerable – and necessary – reform of its aid programmes. The new Commission appointed in 1999 shuffled the portfolios, wrote a new overarching policy emphasising poverty reduction, created a single implementing agency (EuropeAid), and introduced a policy of ‘deconcentration’ of authority to field offices. Additionally, the EU Member States committed themselves at Monterrey to spend at least the current average of 0.33% of their GNP (by 2006) on official development assistance (ODA). This will lift the average ODA/GNP ratio to 0.39%.

Six major issues remain on the agenda: the financial commitment to development cooperation and the channel chosen for its disbursement (the mix between bilateral and via the EC); the overall value-added of aid through Brussels compared to Member States’ programmes; the regional balance of aid so as to have a maximum impact on poverty reduction; the priority setting in European development cooperation; and the effectiveness of aid interventions, including questions about conditionalities and assistance to weak states or in (post-)conflict situations.

This paper considers these issues.