European Commission presented the 'Agenda for Change' of EU Development policy and a new policy for EU budget support Communications. These reports aims to set out a more strategic EU approach to reducing poverty, including through a more targeted allocation of funding.

Andris Piebalgs, EU Commissioner for Development, presented the 'Agenda for Change' of EU Development policy and a new policy for EU budget support. With these two communications, the Commission intends to increase aid impact, concentrating on fewer sectors, focusing on countries most in need. Mr Piebalgs defending these measures because the EU must keep pace with changing realities in the world and adapt the way the EU fight poverty as a result. That's why Commission is proposing to refocus the EU's aid priorities to ensure that countries are on track to achieving sustainable and inclusive growth.

With regard to the Agenda for Change of EU Development policy, it is proposed that the EU aid should focus on sectors setting the foundations for inclusive and sustainable growth. These include good governance, including respect of human rights and democracy; gender equality, role of civil society and the fight against corruption, social protection, health and education, supporting a favourable business environment and deeper regional integration and sustainable agriculture and clean energy, helping to provide safeguards against external shocks and turn challenges of food security and climate change into opportunities for growth. In addition, the EU will explore innovative ways of financing development, like the blending of grants and loans, in order to generate more resources. The Commission will also encourage the EU and its Member States to jointly prepare strategies and programmes (so called "joint programming") and better divide labour amongst themselves in order to increase aid effectiveness.

A new contractual approach for EU Budget support is also suggested by the Commission. It proposes an EU approach to make budget support more effective and efficient in delivering development results by strengthening the contractual partnerships with developing countries. "Good governance and Development contract" will be set up for providing general budget support where the partner country can demonstrate a commitment to fundamental values. Moreover, the promotion of sector service delivery will go through "Sector reform contracts". Sector budget support remains a useful tool even when the conditions do not exist to permit the use of a Good Governance and Development Contract. Budget support will be used in fragile countries on a case by case basis to ensure vital state functions and support the transition via "State Building contracts".

The European Commission launched a consultation on the future of development policy and on the instrument of budget support in autumn 2010. The adopted proposals draw on the analysis of the feedback received from global partners, governments, NGOs and the private sector. It is also based on the results from 2010 report on EU development aid. The main principles of the 12-point Agenda for Change will be progressively reflected in the remainder of the current programming cycles, and then in future EU programming. In spring 2012, the Commission will ask EU Foreign Ministers to endorse the new EU budget support approach.