The Budget Support System in Eastern Partnership Countries
The Budget Support System in Eastern Partnership Countries

Author(s): Elżbieta Kaca
Subject(s): Supranational / Global Economy, Economic policy, Government/Political systems, International relations/trade, Economic development, EU-Accession / EU-DEvelopment, Fiscal Politics / Budgeting, Geopolitics
Published by: PISM Polski Instytut Spraw Międzynarodowych
Keywords: European Union; Eastern partnership countries; budget support system; bilateral financial resources; national administration and EU delegation; sector budget support;
Summary/Abstract: Here we present the general aims and characteristics of budget support in the EaP region, the volume of support and a breakdown by country. Budget support is the predominant EU tool in the Eastern Partnership countries, as around 60% of bilateral financial resources are scheduled to be spent through such means. This comprises financial assistance supporting government reforms and paid directly to the state budget of a specified country. Therefore, it requires close cooperation between the national administration and the EU delegation, ensured by frequent communication as well as the participation of common monitoring committees. Two types of budget support have been in use in the EaP region: general budget support and sector budget support. Under the former, funding is provided for a broad range of reforms planned by the government for a given period of time, for instance, implementation of the association agenda or action plans. The latter, sector budget support, goes for reforms only in a given sector, e.g., energy or health. Sector budget support has been the dominant form of support in all of the EaP countries except Armenia, where general budget support was employed.

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