European Commission

The European Commission, while originally nominated by the Member States, is an independent body, charged with representing and upholding the interests of the EU as a whole. It has a virtually exclusive right of initiative in the EU - it submits proposals for new legislation, policies and programs. It is also responsible for implementing the decisions of the Council and the European Parliament and monitors that the Member States are abiding by their EU commitments. Finally, it is responsible for the budget of the EU.

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

 ·         The European Commission has played a strong role in driving the EU’s international commitments made on ODA at Monterrey, on sustainable development at Johannesburg, and on harmonization at Rome and Paris. At the UN World Summit in September 2005, it 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 European Commission has become a major advocate for increased aid.  In 2002, EU member states pledged to increase ODA to a 0.39% of GDP by 2006 (compared to 0.33% in 2001).  According to the Commission, the EU will exceed this intermediate target and reach 0.42% of GDP in 2006.  In June 2005, it has further announced a target of 0.56% by 2010, and is considering new mechanisms to increase aid volumes (IFF, global taxation, etc.)
·         The European Commission 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 Country (HIPC); and it is a growing source of conflict prevention and post-conflict-related aid.    

The European Commission and the World Bank: Overview 
The Bank’s partnership with the European Commission has been borne out by the experience of partnership in the Accession and Newly Independent States (NIS)/Commonwealth of Independent States (CIS) countries, governed by respective Memoranda of Understandings, in Africa region through 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/MoUs 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 upstream with the Africa region annually (Limelette Process), and with the MENA region semi-annually (Luxembourg Process). The Bank and the EC also hold systematic dialogue on important policy issues such as trade, migration, and debt.

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

Following the signature of the Agreement, partnerships matured considerably over the past few years. So far, the Framework Agreement 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 WB’s trust fund programs for the period of FY01-05 with a total paid-in contribution of $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, to the World Bank Iraq Trust Fund and to 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 $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 WB-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 European Commission counterparts dealing with Africa, Asia, the Middle-East & 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 where the EC plays a leading role on behalf of EU Member States, both in terms of policy orientation and implementation. The Brussels office also facilitates the collaboration between the Bank and the European Commission in parallel financing and Bank-managed Trust Funds and helps operationalize these transactions where possible.