In December 2011 the European Commission (EC) unveiled its package of legislative proposals on the EU’s external action instruments for the period 2014-20 as part of the negotiations on the Multi-Annual Financial Framework (MFF), the EU’s spending review. Six of these external action instruments are geographic, while three are thematic. All of these instruments – except the European Development Fund – form part of Heading 4 (Global Europe) under the EU budget.

This Background Note focuses on selected instruments of direct relevance to international development, and builds on a previous paper that considers financing of European development cooperation. It reviews the proposals on three of the geographic instruments (the European Development Fund, the Development Cooperation Instrument, and the European Neighbourhood Instrument) and two of the thematic instruments (the European Instrument for Democracy and Human Rights, and the Instrument for Stability (IfS).

The paper argues that it will be difficult to secure financing for external action in general, and for development cooperation in particular, as Member States appear intent on reducing the overall EU budget. Other challenges include rapid changes in the development landscape, and the need to find a balance between too much detail, and too little.

The paper discusses the EC’s intention to reassess aid to countries that could fund their own development. It raises concerns about how the EC will work with these countries in the future to address global challenges, and concludes by highlighting important unanswered questions to be addressed during the MFF negotiations.