| On the aid front, this new funding cycle is expected to include more “innovative” instruments such as loans and guarantees. The rollout of such financial tools, which would also include equity and risk-sharing instruments, is aimed at encouraging private investments and developing local institutions in EU aid recipient countries.This is according to the commission’s latest annual report on the European Union’s development and external assistance policies. The report, released Aug. 6, identifies milestones of EU aid policies and programming in 2011, including the proposal of a new development framework dubbed Agenda for Change. This proposal was adopted by the Council of the European Union in May 2012. The strengthening of local institutions and encouragement of private investments are actually in line with the proposal included in the Agenda for Change. The policy emphasizes support for economic growth and good governance. Aside from the introduction of new financial tools, which will complement grants currently disbursed by the European Union, the annual report teases the “significant impact” the adoption of Agenda for Change will have on staff allocation. Staff resources at the EU headquarters and delegation will be distributed in ways that will best support proposed policies in the framework and make sure these are implemented rapidly and efficiently, the report says. The European Commission introduced its first proposal for the bloc’s 2014-2020 financial framework in July 2011. This proposal has since been updated following discussion with other EU institutions, among other factors. The latest version of the draft financial framework was presented July 2012. It seeks €1.03 billion ($1.27 billion) worth of commitments, of which €70 billion is allocated for “Global Europe.” This account covers funds for the Instrument for Pre-accession Assistance, the European Neighborhood Instrument, democracy and human rights programs, and the Common Foreign Security Policy, which covers the European External Action Service.
To read the annual report, please refer to the annex. | 
