A number of partnership structures have evolved over the past 20 years:
Regional consultations. In 1998, the World Bank Group and eight other IFIs signed a Memorandum of Understanding on co-financing operations in Central and Eastern Europe. This helped towards ten candidate countries successfully joining the EU in 2004. The MOU has been a ‘blueprint’ for framework agreements that formalize joint objectives and regular dialogue:
In Africa, high-level meetings take place each year between the European Commission, WBG and African Development Bank. Priority themes are budget support, public financial management, infrastructure and managing for results.
In the Middle East and North Africa, dialogue takes place through the Luxembourg Process, which brings together the EC, EIB, WBG and IMF to discuss operational priorities.
The WBG’s Europe and Central Asia division has broadened its cooperation to cover the South Caucasus, Central Asia and the Western Balkans.
Trust Funds. The European Commission uses WB-administered TFs as an important channel for aid, especially for implementing global initiatives and assisting in post-crisis situations.
Such contributions are governed by a Framework Agreement originally signed in 2001 between EC President Romano Prodi and World Bank President James Wolfensohn and updated in 2009. Since the original agreement, funding levels increased to between $400m-$600m per year in the mid-2000s and $903m in FY2010. The EC was the third-largest donor to WBG-administered TFs and Financial Intermediary Funds (FIFs) in FY2006-FY2010, next to the UK and US.
Contributions are focused on global issues (eg. health, food security, debt relief), Africa (35% of contributions) and fragile states (30% of contributions). In FY2010, more than half comprised contributions to the Debt Relief Trust Fund (DRTF, previously HIPC TF) and Global Fund to Fight AIDS, Tuberculosis and Malaria.
Graph: EC Cash Contributions to WBG Trust Funds (Source: World Bank CFP)