Financing for Development
In 2002, the world leaders gathered in Monterrey, Mexico, to address the challenges of financing for development, particularly in developing countries. Their goal, in line with the 2000 Millennium Declaration, was to eradicate poverty, achieve sustained economic growth and promote sustainable development as we advance to a fully inclusive and equitable global economic system, in a partnership between developed and developing countries. The outcome of the conference is known as the Monterrey Consensus.
The EU, which provides today almost 60% of all official development assistance worldwide, made a number of commitments to achieve this consensus and, in 2005, made additional commitments to collectively reach official development assistance of 0.56% of GNI by 2010. They are set out in the May 2005 May 2005 Council Conclusions (doc. 9266/05) and reiterated in the following years until the November 2008 Council Conclusions (doc. 15480/08) adopting the Guidelines for the participation of the EU in the Doha Conference and the Council Conclusions on May 2009.
Since 2003, the Commission has been monitoring the EU performance on the achievement of such commitments in the context of an annual Monterrey Report. In spring 2009 the Commission presented the seventh EU monitoring report.
The Doha Follow-up International Conference on Financing for Development, which tool place at the end of 2008, while preserving the commitments of the Monterrey Consensus, aimed to evaluate progress and find ways to face new challenges and emerging issues, as reflected in the Doha Declaration 2008, which was adopted by consensus. The conference also decided the organisation of a UN conference at the highest level to discuss the impact of the financial and economic crisis on development.
The global economic downturn jeopardized the EU member states' engagement to disburse, by 2010, collectively 0.56% of the EU GNI as ODA and, by 2015, 0.7%. In June 2010, the Council expressed satisfaction that despite the economic and financial crisis, many Member States had managed to maintain or raise their ODA spending. However, it acknowledged that the EU will not reach the collective EU intermediate target of 0.56% ODA/GNI by 2010 and therefore urged the Member States, particularly those clearly behind schedule, to deploy necessary efforts in order to meet 2015 ODA commitments as set out by the Council in May 2005. [1]
Where ODA is unquestionably necessary the mobilisation of domestic resources is also crucial. Fair, effective and efficient tax systems, as well as sustained commitment to address harmful tax practices and tax evasion will increase domestic resources. The EU will support developing countries in building their capacities, and will also push for a more development-friendly international framework. In this regard, following on from the Commission Communication on Tax and Development of 21 April 2010, the Council has adopted Conclusions on Tax and Development - Cooperating with Developing Countries on Promoting Good Governance in Tax Matters (doc. 11082/10).
[1] Council Conclusions of 24 May 2005 (doc. 9266/05, including Annexes 1 and 2), para. 4.
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