European Commission

The European Commission (EC), nominated by its member states, is an independent body, charged with representing and upholding the interests of the European Union (EU) as a whole. It submits proposals for new legislation, policies, and programs and is responsible for implementing the decisions of the Council and the European Parliament.  It also monitors member states compliance with EU commitments. Finally, it is responsible for the budget of the EU.

As the Union’s executive branch, the EC manages important instruments relating to developing countries (e.g. aid and trade) and is the main interlocutor of the World Bank with other EU Institutions. The  EC’s role in international development assistance has been strengthened by the following factors:

 ·         The EC has played a strong role in driving the EU’s international commitments made on official development assistance (ODA) in Monterrey; on sustainable development in Johannesburg; and on harmonization in Rome and Paris. At the United Nations World Summit in September 2005, the EC reiterated its commitment to re-center its development aid around the Millennium Development Goals. It also revised a Development Policy Statement in December 2005, formulating common strategic objectives for development policy shared by the whole EU. 
·         The EC has become a major advocate for increased aid.  In June 2005, it further announced an ODA target of 0.56% of gross domestic product by 2010, and is considering new mechanisms to increase aid including IFF and global taxation.  
·         The EC has provided 11% of global ODA in 2004 (the EU total share is 55%). The Commission is also the largest donor to Heavily-Indebted Poor Countries (HIPC); and it is a growing source of aid for conflict prevention and post-conflict countries.      

The European Commission and the World Bank: Overview 
The Bank’s partnership with the EC is modeled on the experience of partnership in the Accession and Newly Independent States/Commonwealth of Independent States countries, governed by respective memoranda of understandings in Africa through the shared framework of Poverty Reduction Strategy Papers (PRSPs) and more recently in the Middle East and North Africa (MENA) region, under a strategic partnership agreement. Through these formal partnership agreements for some regions (agreements/memoranda of understanding exist in Europe and Central Asia, MENA, Africa, and East Asia), policy dialogue and operational collaboration are moving from ad hoc information exchange to a more strategic and systematic alignment around country-based processes such as the PRSPs. Consultations are held with the Africa region annually (Limelette Process), and with the MENA region semi-annually (Luxembourg Process). The Bank and the EC also hold  dialogue on important policy issues such as trade, migration, and debt.

 

The EC and World Bank Group are finance many joint operations.  Most financing is allotted through parallel or co-financing and trust fund arrangements. These are specifically governed by the Framework Agreement signed in November 2001, which provides for the administration of Bank-managed activities with EC financing.

 

Since the 2001 agreement, partnerships have matured considerably.  The framework has facilitated the creation of 41 parent trust funds—out of a total of 93 parent trust funds established at the Bank over the last 20 years.

The EC was the second largest contributor to the Bank trust fund programs for the period of FY01-05 with a total paid-in contribution of US$2,083 million. It is the largest donor to the ASEM Asian Financial Crisis Trust Fund (both phases I and II), Multi-Donor Trust Fund for Aceh and Nias, World Bank Iraq Trust Fund and to the Heavily Indebted Poor Countries Initiatives (HIPC). The EC is also the third largest donor to the Afghanistan Reconstruction Trust Fund, and the second largest multilateral investor in Consultative Group on International Agricultural Research (CGIAR).   It has pledged US$522 million to the Global Fund to Fight AIDS, Tuberculosis and Malaria, which would make it the third largest donor to this fund.   

Consultations about the Trust Funds and Co-Financing Framework Agreement are held annually, to review administrative and operational issues, discuss new mechanisms for joint financing (e.g., grant co-financing, blending), and assess the pipeline of proposals for the following year.

Role of the World Bank Brussels Office in World Bank-EC Partnership 
The Brussels Office of the World Bank provides support to the Regional Vice Presidencies of the World Bank, notably in expanding their ties with the EC counterparts dealing with Africa, Asia, the Middle East and North Africa, and Latin America[1]. A great deal of effort is also put into deepening the dialogue with the Commission on thematic issues key to development, such as trade, debt relief, education, health and migration.  The EC plays a leading role in these areas on behalf of EU member states, in both policy orientation and implementation. The Brussels office also facilitates collaboration between the Bank and the EC in parallel financing and Bank-managed Trust Funds, and helps operationalize these transactions where possible.