The mid-term evaluation of NDICI-Global Europe: Is the instrument fit for purpose?

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Alexey Larionov via Unsplash

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Last week, the European Commission released a staff working document presenting the EU’s assessment of the new set of external financing instruments it adopted in 2021. Included as an annex is the external evaluation of these instruments, to which ECDPM contributed. The 2021 overhaul of financing instruments marks a significant shift from the past: these went from 11 to 4 to strengthen the EU’s external effectiveness. Most of these are now streamlined under the newly created instrument for neighbourhood, development and international cooperation: NDICI-Global Europe.

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    The EU's international relations have been profoundly affected by Russia's war in Ukraine, geopolitical tensions, increased global instability, the climate crisis and the continued effects of the COVID-19 pandemic in developing countries. Even before the pandemic, internal and external EU dynamics had laid the ground for a paradigm shift in the EU’s international cooperation. A leaked internal briefing by the European Commission’s Directorate-General for International Partnerships (DG INTPA), intended for their incoming commissioner, calls for a further deepening and acceleration of that shift, to equip the EU for a more interest-driven, economy-focused and integrated external action.

    Major milestones of this paradigm shift include the introduction of the ‘Geopolitical Commission’ under Ursula von der Leyen’s leadership in 2019, the announcement of the ‘Team Europe’ approach in 2020 – through which the EU wants to coordinate activities jointly undertaken with its member states and development finance institutions – and the 2021 launch of the Global Gateway strategy, through which the EU mobilises investments in infrastructure-related projects and social sectors in partner countries.

    In parallel, 2021 saw the launch of a set of new EU external financing instruments, such as NDICI-Global Europe and the European Fund for Sustainable Development Plus. This reform aimed at better aligning the financing instruments with the evolving vision for EU external action and at enhancing the EU’s ability to address global instability and achieve the Sustainable Development Goals (SDGs). This need is underscored by the fact that, in 2023, only 15% of the SDG targets had been reached.

    Assessing the effectiveness of the external financing instruments


    In light of this, the EU aimed to evaluate the effectiveness of its new set of external financing instruments in terms of addressing both emerging challenges and recurring crises. The staff working document presents the findings of the final evaluation of the EU's external financing instruments implemented under the EU's long-term budget for 2014-2020, as well as the findings of the mid-term evaluation of the new instruments implemented under the 2021-2027 budget – carried out by Particip and ECDPM.

    The European Commission assessed the instruments’ performance based on their added value for the EU, effectiveness, efficiency, impact, flexibility and adaptability to changing political and policy priorities, scope for simplification, coherence, synergies and ongoing relevance of their objectives. It strongly builds on the external evaluation and ecompasses the same scope.

    Both the European Commission’s assessment and the external evaluation focused in particular on the extent to which the new set-up enabled a transition of the EU’s external action guided by six key shifts that the NDICI-Global Europe reflects (see Graph 1).
     

    Graph 1: Key shifts in the new set-up of EU external financing instruments

    Shifts-Architecture-EU-External-Financing-Instruments-External-Evaluation-Particip-ECDPM.png
    Source: External evaluation of the EU’s external financing instruments – Particip and ECDPM

    Conclusions from the European Commission


    The European Commission is generally appreciative of the reform and concludes that the implementation of NDICI-Global Europe marks a fundamental shift from the past and has proved fit for purpose. With this, the EU has taken steps to move away from its traditional role as development donor and position itself as a more flexible and innovative partner. Nevertheless, NDICI-Global Europe is at an early stage of implementation and requires further work and improvements.

    Zooming in on positive effects of the reform, the staff working document qualifies NDICI-Global Europe as a useful tool to support the roll-out of the Global Gateway strategy and present the EU’s policies and priorities to partners in a more coherent manner. The fact that NDICI-Global Europe consolidates several instruments promotes coherence and complementarity, and provides a unified legal basis for a large share of the EU’s external interventions and the way these are implemented.

    Moreover, NDICI-Global Europe allows the EU to make larger and more coherent offers to its partners. According to the staff working document, various reforms to enhance the flexibility of NDICI-Global Europe have proven their relevance, which is illustrated by the support the EU has provided through the instrument in response to COVID-19, the Russian war against Ukraine and migration-related pressures.

    Unforeseen geopolitical developments have stretched the instrument to its limits.

    But unforeseen geopolitical developments have stretched the instrument to its limits. The so-called cushion, a flexible window of NDICI-Global Europe funding for unforeseen circumstances and emergencies, was rapidly consumed by the crises that unfolded since early 2020.

    During the first three years of the 2021-2027 long-term budget, some 80% of the cushion had been used – a substantial portion of which for support to Ukraine – leaving limited funding for unforeseen developments such as natural or man-made disasters. The staff working document concludes that the external financing instruments were not designed to support countries at war, which prompted the creation of the Ukraine Facility.

    It also concludes that despite more flexibility procedures introduced under NDICI-Global Europe, programming – the allocation of funds to specific projects – remains a heavy process, which in turn delays implementation. One of the key recommendations of the 2017 mid-term evaluation – to enhance flexibility – has therefore not been fully realised.

    The document further concludes that the Team Europe approach is falling short of expectations. More time and improved collaboration between different EU services and EU member states will be required to make it work. Finally, greater efforts are required to improve coordination between relevant funding instruments and to bridge short-term rapid response actions with long-term actions, particularly in engaging with conflict-affected countries and fragile contexts.

    Lessons from the external evaluation


    The external evaluation that is attached to the staff working document underpins these broad conclusions. However, it goes into more detail on the issues raised and analyses the instruments’ performance from an independent perspective.

    Its first key lesson is explicit: managing the transition implied by the external financing instruments clearly requires more time, energy and creativity than expected. At the same time, strong political leadership and steering are needed in the ongoing roll-out of the instruments, in particular in fostering coherent decision-making and overcoming silo approaches to push for effective EU joint action.

    Another lesson spells out that the EU’s expanding external action mandate in increasingly difficult situations, for instance in conflict-affected and fragile environments or protracted crises, requires more sophisticated levels of knowledge and analysis. So far, gaps in knowledge – compounded by inadequate internal monitoring and evaluation systems – have affected decision-making, hampered partnerships with non-EU countries and reduced EU leverage. They have also been insufficiently acknowledged so far. The evaluation further states that future adaptations are required to keep the instruments fit for purpose in an increasingly volatile global context.

    Despite a carefully designed set-up of the external financing instruments ahead of the EU’s current long-term budget, geopolitical turbulence in the EU’s environment reveals gaps in the EU’s response capacity, encompassing its political weight, influence and funding. As such, the current instruments might require adaptations in the short term, as well as in the context of the next long-term budget.

    Findings show that processes and practices have evolved to meet these challenges, but that the EU’s institutional structure has largely remained unchanged, which should be an issue of concern.

    Finally, the evaluation observes that consolidation and streamlining of the instruments has brought efficiencies. However, at the same time, this has escalated the need for broader and deeper consultations within and between the different EU institutions, between the institutions and EU member states, and between the institutions and external partners like the World Bank or the United Nations. Findings show that processes and practices have evolved to meet these challenges, but that the EU’s institutional structure has largely remained unchanged, which should be an issue of concern. 

    The future of NDICI-Global Europe under a new EU leadership


    This rich body of knowledge is timely and will feed into future international cooperation discourse to inform the newly elected members of the European Parliament and the new leadership at the helm of the European Commission.

    Further evidence and reflection will be needed on the extent to which the EU manages to combine its values, interests and commitments in a complex international environment. It is also crucial to assess the feasibility of the ambitions for EU external action within existing frameworks and explore how lessons from the EU’s cooperation with its neighbourhood could inform the EU-Africa partnership, and vice versa.

    Beyond that, we are left with several operational questions, for instance on the effectiveness of the EU’s institutional set-up to promote more policy-driven approaches and innovative partnerships, or on the extent to which ambitious goals of mobilising development finance, including private sector investments, can be realised. There are also big questions on the ‘different approach’ needed for fragile countries, as emphasised in DG INTPA’s briefing to its next commissioner. Research and dialogue will be needed on the effectiveness of existing instruments to promote resilience and the flexibility of the institutional set-up in dealing with protracted crises situations.

    ECDPM will nurture this discourse in the coming weeks and months – including in our commentary series ‘To the new leaders of Europe’.

    The views are those of the authors and not necessarily those of ECDPM.

    Thank you to Mariella Di Ciommo for her useful suggestions and review.

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