EU budget support is a means of delivering effective aid and durable results in support of EU partners’ reform efforts and the sustainable development goals. It involves (i) dialogue with a partner country to agree on the reforms or development results which budget support can contribute to; (ii) an assessment of progress achieved; (iii) financial transfers to the treasury account of the partner country once those results have been achieved; and (iv) capacity development support. It is a contract based on a partnership with mutual accountability. In compliance with the EU financial regulation, the use of budget support is subject to conditions. Eligibility criteria have to be met before signing a contract and maintained during its implementation before payments are made.
In its 2018 review of EU external cooperation, the Organisation for Economic Cooperation and Development (OECD) praised the effectiveness of EU budget support. This confirms the results of recent evaluations carried out by independent entities. This report describes the spread and depth of the EU budget support programmes in the different regions and countries. It presents their results according to the sustainable development goals (SDGs), analyses the risks associated with budget support and depicts the financial and geographical distribution of the ongoing operations.
EU budget support covers a large variety of sectors, with 250 contracts implemented in 89 countries or territories. On average, it accounts for about 40 % of national cooperation programmes with partner countries. In 2018, it gave rise to EUR 1.8 billion of payments, providing countries with additional fiscal space to finance their public policies, bear the costs of reforms, build their administrative capacities, achieve ambitious results and sustain these.
At the core of EU cooperation lies the objective to leave no one behind in line with the 2030 Agenda for Sustainable Development and the 2017 European Consensus on Development. EU budget support has an important part to play for that purpose, with respect to SDG 1 and SDG 10 targeting poverty and inequality reduction. Through a portfolio centred on least-developed countries (more than 50 % of the total commitments) and a focus on vulnerable groups or deprived regions in all its programmes, EU budget support is helping to build a more equitable world by 2030.