The Commission has repeatedly raised the prospect of integrating the European Development Fund into the general budget (referred to as the "budgetisation of the EDF").  It first proposed this move in 1973 and 1979, without any resulting action. During the negotiations on the 2007-2013 financial perspectives, the Commission revived the proposal, but it was again rejected by the European Council (15-16 December 2005). It is likely that the proposal will be returned to during the negotiation of the next financial perspectives.

The Commission Proposal on the incorporation of the EDF in the EU Budget - COM(2003)590

Main arguments:

Legitimacy

The EDF is currently an anomaly in that it is the only EU expenditure that does not have to be authorized by the European Parliament. Incorporating the EDF into the general budget would rectify this and therefore strengthen the democratic legitimacy of the EU's development assistance. Because it does not come under the general budget, development co-operation with the ACP countries is excluded from one of the most important political decision-making processes of the EU. The risk that relations with the ACP countries are marginalized in favor of more economically advanced regions is clearly exacerbated by this exclusion. Furthermore, the ACP-EU Joint Parliamentary Assembly would be able to increase its influence through its members in the European Parliament.

Transparency

A single budget which includes all external aid expenditures would give a more accurate global picture of the EU's external assistance and of EU development policy, in terms of both size and geographical distribution. Integrating the EDF into the general budget would allow citizens to find out what the EC spends on development policy by referring only to a single document, a situation which clearly facilitates greater transparency.

Efficiency and effectiveness

Budgetisation would lead to greater cost effectiveness, and would reduce the administrative burden on both donor and recipient countries. The unification of administrative and legal rules, decision-making structures, and commitment and payment procedures, would remove the current duplication of these functions.  The pattern of commitments would also become more regular and the speed of delivery of aid would be improved.

Reactions

The Commission proposal has been subject to many discussions, and analyses have been carried out on the impact budgetisation would have on aid for ACP countries. In January 2004, the CONCORD Cotonou Working Group gave its answer to the Commission communication: Budgetising the EDF, A CONCORD Cotonou Working Group Response to the Commission Communication.

For another analysis of EDF budgetisation, see: Budgetisation of the European Development Fund, Briefing Paper, Mirjam van Reisen, EEPA, July 2003.