Luxembourg's development cooperation - Annual report 2017

Under the Maltese Presidency, Luxembourg took part in the informal meeting of Development Ministers held in Brussels on 16 March 2016 and in the Foreign Affairs Council meeting in its development configuration in Brussels on 19 May 2016. Under the Estonian Presidency, Luxembourg also took part in the informal meeting of Development Ministers held in Tallinn on 11 September 2016 and in the Foreign Affairs Council meeting in its development configuration in Brussels on 11 December 2016. Luxembourg also took part in the European Development Days held in Brussels on 7 June 2017.

Over the course of 2017, the Council, in its development configuration, addressed the following major issues:

The European External Investment Plan (EIP) and the European Fund for Sustainable Development (EFSD)

On 14 September 2016, the European Commission presented a new External Investment Plan (EIP) to support investments in Africa and in neighbouring EU countries (southern and eastern) by emphasising job creation. The EIP aims to leverage funds from the EU, international financial institutions, Member States (and possibly third countries), other donors and the private sector. It is a long-term strategy that will contribute to the objective of tackling the deeper causes of migration and the international commitments to development financing, as well as contributing to the implementation of the Paris Agreement on climate change (COP 21). The EIP has a budget of 3,35 billion euros from the EU budget and the European Development Fund and aims to support innovative guarantees and similar instruments in support of private investment.

The cornerstone of this plan is the European Fund for Sustainable Development (EFSD), which is expected to mobilise 44 billion euros – and this amount could even be doubled if the Member States and other donors contribute to the EFSD to the same extent as the EU. The main objective is to supply an integrated financial package to finance investments, starting with regions of Africa and neighbouring countries. The fund offers a guarantee to encourage the private sector to invest in riskier contexts (fragile states, conflict-affected areas) and is based on the experience acquired through the use of “blending”. Investments mainly focus on improving social and economic infrastructure, such as municipal infrastructure and local services, support to small and medium-sized enterprises’ projects, microfinance and job creation.

The EFSD Regulation had been negotiated since October 2016 within the Friends of the Presidency Group created for that purpose under the Slovakian and Maltese Presidency respectively and, in 2017, also in tripartite dialogue with the European Parliament. The Parliament adopted the text on 6 July 2017. On 25 September 2017, the Council adopted the Regulation establishing the European Fund for Sustainable Development (EFSD), which was published in the Official Journal on 27 September 2017.

Alongside other Member States, Luxembourg insisted throughout the preparatory work that the management of the assets should be given to the European Investment Bank (EIB) rather than to the European Commission. Unfortunately, this stipulation was not retained. In addition, Luxembourg stated its regret many times that the text proposed gives too much importance to migration compared to development cooperation and that the text refers to migration in the wider sense rather than irregular migration.