"European Community (EC) aid" refers to assistance that is channelled via and managed by the European Commission, excluding Member States' bilateral aid.
The European Community and its Member States together make up the world's largest donor of international aid. In 2005, they accounted for 52.32% of global Official Development Assistance (ODA), amounting to €44.8 billion (USD 55.7). This collective European Union (EU) aid effort, expressed as a proportion of the combined EU national income, reached 0.44% in 2005.  Taken alone, the European Community ranks as the world's fifth largest aid donor accounting for 9% of global ODA. This equals net disbursements of € 7.5 billion (USD 9.4 billion) in 2005.

In May 2005, the EU increased the initial ODA targets set by those Member States that participated in the ‘Barcelona commitments’ (= EU15): By 2006, the EU member states had committed to spend 0.33% ODA/ gross national income (GN)I on development assistance. In order to achieve the 0.7% UN goal by 2015, all 25 member states subscribed to new intermediate commitments for 2010:

• The EU15 that are below a level of 0.51% ODA/GNI undertake to achieve that level; while those that are above promised to sustain their efforts.
• The Member States that joined the EU after 2002 (=EU10) and have not yet attained a level of 0.17% ODA/GNI will strive to increase their aid to that level by 2010 and to 0.33% by 2015. Romania and Bulgaria aligned themselves to these commitments.

Community aid is derived from two distinct financial sources:

• The annual EC budget. The legal basis for the development co-operation budget is Art 177 of the Treaty of the European Community.
• The European Development Fund (EDF). Its legal basis is the revised Cotonou agreement.

The European Development Funds (EDF) supports African, Caribbean and Pacific (ACP) countries, while the EC budget provides for co-operation with developing countries in all geographic regions.

The EC’s key development policy document is the European Consensus on Development adopted in December 2005. It sets out common objectives and principles for development co-operation reaffirming the EU’s commitment to poverty eradication, ownership, partnership, delivering more and better aid, and promoting policy coherence for development. It will guide the European Union’s development co-operation with all developing countries for the coming years.

The Declaration is divided into two parts:
Part I sets out the EU’s common vision of development, the primary objective being the eradication of poverty, considered in its multidimensional aspects and in the context of sustainable development, in line with the Millennium Development Goals (MDGs). Human rights and good governance are other important objectives. It also stresses shared principles and sets goals in order to deliver “more and better aid”.
Part II sets out the policy guiding the implementation of this vision at the Community level. In each recipient country the EC will target its assistance in a limited number of priority areas of action from the following list:

• trade and regional integration
• the environment and the sustainable management of natural resources
• infrastructure, communications and transport
• water and energy
• rural development, territorial planning, agriculture and food security
• governance, democracy, Human Rights and support for economic and institutional reforms
• conflict prevention and fragile states
• human development
• social cohesion and employment.

In all its activities the Community will apply a strengthened approach to mainstreaming the following crosscutting issues:

• democracy, good governance, Human Rights, the rights of children and indigenous peoples
• gender equality
• environmental sustainability
• the fight against HIV/AIDS.

The responsibilities of the directorates involved in EC development aid are divided as follows:

DG Development is responsible for development policy formulation and co-ordinates the Community's relations with the sub-Saharan African, Caribbean and Pacific countries (ACP) and regions, including the African Union. The Commissioner in charge is Louis Michel. 

DG External Relations manages bilateral relations with the countries of Eastern Europe and Central Asia, the Middle East and the South Mediterranean, as well as North America, Latin America, Australia and Asia. It is responsible for the Commission’s relations with international organisations and administers the Commission delegations in third countries. The Commissioner in charge is Benita Ferrero-Waldner. 

DG Enlargement is responsible for relations and official assistance to EU candidate countries (FYRO Macedonia, Croatia, Turkey) and potential candidate countries (Albania, Bosnia & Herzegovina, Montegro, Serbia (incl. Kosovo)). The Commissioner in charge is Olli Rehn. 

EuropeAid Co-operation Office's mission is to implement the external aid instruments of the European Commission. The Office is responsible for all phases of the project cycle (identification and appraisal of projects and programmes, preparation of financing decisions, implementation and monitoring, evaluation of projects and programmes). EuropeAid handles the devolution to Commission Delegations of all operations, which can be better managed locally, and the de-centralisation to beneficiary countries. The Commissioner in charge is Benita Ferrero-Waldner. 

The European Community Humanitarian Office’s (ECHO) role is to provide emergency assistance and relief to the victims of natural disasters or armed conflict outside the European Union. The Commissioner in charge is Louis Michel. 

DG Trade is responsible for external trade including that with developing countries. The Commissioner in charge is Peter Mandelson. 

DG Research manages specific collaborative research projects and programmes, which may be relevant for developing countries. The Commissioner in charge is Janez Potocnik. 

DG Education and Culture manages a programme reaching out to young people, which may be relevant for developing countries. The Commissioner in charge is Ján Figel.

Key to the reform of EC aid is the change from centralised to decentralised management of development assistance. Mostly this entails that the management of aid is de-centralised towards the delegations of the Commission. The basic principle is that “everything that can better be managed and decided on at a local level, should not be managed or be decided on in Brussels”. Now, this devolution exercise has been completed with 77 delegations in the field responsible for the implementation of assistance. In practice this means that delegations now have increased influence over project identification and appraisal, contracting and disbursement of Community funds and project monitoring and evaluation. As part of its strengthened capacity in-country, the European Commission will also step up co-ordination between Member States on the ground in liaison with the county authorities. As a consequence, the headquarters structure of EuropeAid Co-operation Office was modified in March 2005 to provide more help and support to delegations.
A list of EC delegations web pages is available here. The External Service Directory is a database of delegation addresses. It is available here.

Over time, the EU has developed a broad spectrum of external aid programmes, which resulted in a complex set of more than 30 different legal instruments. The need to facilitate coherence and improve consistency of the Union’s action, and achieve better results and a higher impact with the resources available, led the Commission to propose a simplified framework for external actions over the 2007-2013 period. New (and fewer) external relations instruments have therefore been designed to cover in particular the EU co-operation, respectively with developing countries and industrialised countries, the EU neighbourhood policy, enlargement and other specific themes.

European Development Fund (EDF)
The EDF is a financial resource from the European Community for development co-operation with 76 ACP (African, Caribbean and Pacific) countries. It is constituted by contributions from EU member states and managed by the Commission. It is not part of the Community budget and has specific procedures. € 22.7 billion have been allocated to the EDF for the period from 2007 to 2013.

Development Co-operation Instrument (DCI)
Through the DCI, the European Community pursues a development co-operation policy aimed at achieving the objectives of poverty reduction, sustainable development and the smooth and gradual integration of developing countries into the world economy. For the period from 2007 to 2013, € 16.897 billion have been allocated to the DCI. The DCI comprehends geographic programmes targeting the countries and regions of Latin America, Asia, Central Asia, the Middle East and South Africa (€ 10.057 billion). Further, the DCI includes thematic programmes covering all countries eligible for the geographic programmes of the DCI, EDF and ENPI (€ 5.596 billion).

European Neighbourhood and Partnership Instrument (ENPI)
The ENPI provides Community assistance for the development of an area of prosperity and good neighbour relations targeting Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Palestinian Authority of the West Bank and Gaza Strip, Russian Federation, Syria, Tunisia, and Ukraine. For the period from 2007 to 2013, € 11.181 billion have been allocated to the ENPI. The ENPI is divided into country and multi-country programmes (€10.621) and cross-border co-operation programmes (€ 0.560 billion).

Instrument for Pre-Accession (IPA)
IPA aims at providing targeted assistance to countries, which are candidates and potential candidates for membership to the EU. This applies to FYRO Macedonia, Croatia, Turkey and Albania, Bosnia & Herzegovina, Montenegro, Serbia (incl. Kosovo). For the period from 2007 to 2013, € 11.468 billion have been allocated to the IPA.
IPA has five components:

• the transition assistance and institution building (which principally
• involves institution building measures with accompanying investment);
• cross-border co-operation;
• regional development;
• human resources development;
• and rural development.

Instrument for Stability
The objectives of the Instrument for Stability are twofold:
(1)in a situation of crisis or emerging crisis, to contribute to stability
(2) in the context of stable conditions to help build capacity both to address specific global and transregional threats having a destabilising effect and to ensure preparedness to address pre- and post-crisis situations.
€ 2.062 billion have been allocated to the Instrument for Stability for the period from 2007 to 2013.

European Instrument for Democracy and Human Rights (EIDHR)
The EIDHR is a financing instrument for the promotion of democracy and human rights worldwide allowing for assistance independent from the consent of third country governments and other public authorities. 
€ 1.104 billion have been allocated to the EIDHR for the period from 2007 to 2013.

Humanitarian Aid Instrument
The humanitarian aid instrument comprises assistance, relief and protection operations to help people in developing countries and as a priority those in developing countries, victims of natural disasters, man-made crises, such as wars and outbreaks of fighting, or exceptional situations or circumstances comparable to natural or man-made disasters.

EC policy texts are strong on SRH and population issues. The EC’s objectives described in the European Consensus on Development refer to the Millennium Development Goals (MDGs) recognizing the multi-dimensional problem of poverty including the role of health. In addition, HIV/AIDS and SRH together with the ICPD agenda receive a high attention and are explicitly addressed. However, there is no direct link between policy texts and funding.

As a rule, EC reproductive health assistance in developing countries is channeled through:
horizontal operations: It seems that funding going to SRH and population programmes through horizontal programmes is decreasing. Most importantly, in the course of restructuring EC external assistance, the budget line dedicated to SRH and population programmes has disappeared. The same is true for the budget lines focusing on poverty diseases and for gender equality in development co-operation. They have been merged into one programme called “Investing in people” which focuses on a range of topics as varied as health, education, gender equality protection of children or protection of cultural diversity. An advice for NGOs working in the sector of sexual and reproductive health is to see how their projects also could fit into other horizontal programmes (E.g. the non-state actors, the food security programme of the EIDHR).
Geographical instruments: At the time of publishing country strategy papers (CSP) for the period of 2007 to 2013 were still being drafted. It remains to be seen whether these CSPs will sufficiently incorporate sexual and reproductive health.

The role and added value of NGOs in the EC’s development assistance is an ongoing debate within the European Commission and the co-operation with NGOs has been shifting over the past decade.

In 2002, the European Commission drafted a document laying down principles and recommendations concerning non-state actors and development policy. In this document, the European Commission acknowledges that NGOs are gradually becoming one of the key partners in development policy: involved in the development process either as partners in dialogue or consultation with the relevant authorities, or as "full" actors (proposing and implementing projects).
Indeed, part of EC aid allocations has been channelled through NGOs. The thematic programmes are an example of this. In the past these programmes were reserved to NGOs with a basis in Europe, at the same time excluding Southern NGOs. This is about to change with the Commissions proposal aimed at untying aid which in the long run aims at opening these programmes to Southern NGOs. Similarly, efforts have been made to implement the Cotonou Agreement, which asks to involve Southern NGOs into the development process. At the same time many donors including the EC are shifting towards a new assistance paradigm with the objective of giving more responsibility to partner countries: More and more development assistance is devoted to sector-wide approaches and budget support managed by the national governments. This means that proportionally fewer funds will directly be channelled to NGOs. Development assistance funds reaching NGOs increasingly will depend on the good will of national governments issuing calls for proposals open to NGOs.

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Annual Report 2006 on the European Community’s Development Policy and
the Implementation of External Assistance in 2005
Annual Report 2005 on the European Community’s development policy and the implementation of external assistance in 2004
Cotonou Agreement (incl. revisions), Partnership agreement between the members of the African , Caribbean and Pacific froup of states of the one part, and the European Community and its member states, of the other part.
Development Co-operation Instrument: Common Position (EC) No 28/2006 adopted by the Council on 23 October 2006 with a view to the adoption of Regulation (EC) No …/2006 of the European Parliament and of the Council of …  establishing a financing instrument for development co-operation.
EU Donor Atlas, Mapping Official Development Assistance.
The European Consensus on Development (20 December 2005): Joint statement by the Council and the representatives of the governments of the Member States meeting within the Council, the European Parliament and the Commission on European Union Development Policy.
European Instrument for Democracy and Human Rights: Regulation (EC) No 1889/2006 of the European Parliament and of the Council of 20 December 2006 on establishing a financing instrument for the promotion of democracy and human rights worldwide
European Neighbourhood and Partnership Instrument: Regulation (EC) No 1638/2006 of the European Parliament and of the Council of 24 October 2006 laying down general provisions establishing a European Neighbourhood and Partnership Instrument
Instrument for Pre-Accession Assistance: Council Regulation (EC) No 1085/2006 of 17 July 2006 establishing an Instrument for Pre-Accession Assistance (IPA)
Instrument for Stability: Regulation (EC) No 1717/2006 of the European Parliament and of the Council of 15 November 2006 establishing an Instrument for Stability
Participation of non-state actors in EC development policy: Communication from the Commission to the Council, the European Parliament and the Economic and Social Committee, Brussels, 07.11.2002, COM(2002) 598 final
ECDPM. 2004. InfoCotonou No. 6: Rethinking the added value of European NGOs. Maastricht: ECDPM.

Webpages:

European Commission, DG Development
European Commission, Europe Aid Co-operation Office (AIDCO)
European Commission, Humanitarian Aid department (ECHO)
European Commission, DG External Relations 
European Commission, DG Enlargement
European Commission, DG Education and Culture
European Commission, DG Research
European Commission, DG External Trade
European Commission, DG Health and Consumer Protection