On the proposal for a Council decision amending Decision (EU) 2021/1764 on the Association of the Overseas Countries and Territories with the European Union including relations between the European Union on the one hand, and Greenland and the Kingdom of Denmark on the other

As part of the preparation of the EU's next long-term budget, or 'Multi-annual Financial Framework' (MFF), the Commission has proposed a limited set of revisions of the Decision on the EU-Association of the Overseas Countries and Territories (OCTs), including Greenland (DOAG). This Council Decision, adopted in 2021 is the legal instrument underlying the association of the OCTs with the Union in line with the provisions of the Treaty on the Functioning of the European Union (TFEU) – Part Four. Article 203 TFEU empowers the Council to adopt the provisions and rules for the EU association of the OCTs through the special legislative procedure, after having consulted the European Parliament.

The thirteen Overseas Countries and Territories (OCTs) are EU-associated islands located in the Arctic, the Atlantic, the Caribbean, the Indian Ocean, and the Pacific, and are constitutionally linked to Denmark (Greenland), France (six OCTs) and the Netherlands (six OCTs), on which they depend to varying degrees as non-sovereign countries or territories. They are not part of the EU and its single market but are not considered to be third countries either.

DOAG, the Council Decision of 2021, provides for a funding programme for OCTs which is financed from the EU budget but is separate from NDICI-Global Europe. Since the ordinary legislative procedure does not apply to the OCT association, neither NDICI and DOAG, nor DOAG and the future Global Europe Instrument could be merged or adopted as one single package under the respective MFF.

In other words, the legal act providing the framework and legislative procedure for the EU partnership with the OCTs remains separate from the Global Europe instrument due to its distinctive legal nature and Treaty base, but a revision of DOAG is required for the financial programme under the next MFF.

This revision provides an opportunity to adapt the Association framework to other developments and changes, such as the launch of the Global Gateway Initiative in 2021, new needs and priorities and the drastically changed and increasingly tense and challenging geopolitical context - most visibly as regards to Greenland, but also as regards to geo-economic competition, disruption of global value chains, massive reductions in development assistance, challenges to maritime security, hybrid threats, global setbacks for democracy, multilateralism and the rules-based order, as well as escalating effects of climate change and biodiversity loss.

Against this backdrop, the Commission proposes to allocate an indicative financial envelope of EUR 999 million (in current prices) to the OCT association’s funding programme for 2028-2034. Compared to the current MFF, where the OCT allocations amount to EUR 510 million in current prices (excluding additional funds from the NDICI cushion and budgetary reallocations), this would amount to a doubling of the support for OCTs or a 74 % increase if calculated in 2025 constant prices. However, if one takes into account the recently announced mobilisation of an additional EUR 200 million for Greenland under the current MFF, the proposed increase is more modest, and in any case, risks being reduced in negotiations by the European Council.

Otherwise, perhaps surprisingly, the Commission proposes relatively modest or technical amendments to the Council Decision from 2021, primarily relating to (1) Global Gateway and its toolbox: allowing budget support, policy-based loans, budgetary guarantees, financial instruments, and blending as modalities to be used for cooperation with OCTs; (2) the merging of the bilateral with the regional envelopes for OCTs other than Greenland, and (3) cross-referencing and highlighting the complementarity of other EU funding programmes for which OCTs are eligible. Lastly, the Commission proposes to adjust the policy dialogue framework, but in fact the amendments seem to fall short of the stated objective of strategically enhancing dialogue with OCTs, not least by reducing the frequency of the OCTs-EU Forum.

The Commission proposal stresses that the future European Competitiveness Fund should make it possible "to accompany OCTs’ Global Gateway-related projects along the entire investment journey, from research, through scale-up, industrial deployment, to manufacturing, in addition to and/or in complementarity with DOAG".

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In line with Annex VI of Parliament's Rules of Procedure, the Committee on Development is responsible for matters relating to OCTs, and as such has appointed its Chair as Rapporteur for the consultation of Parliament on the DOAG revision.

The suggestions of the Rapporteur, presented in the form of legislative amendments, either to the initial Council decision on Overseas Association, or to the Commission proposal for amending that Council Decision, seek to reinforce democratic accountability and consultation, take into account the increased geopolitical relevance of the partnership, and to broaden social and economic and strategic opportunities for the people living in the OCTs by reflecting local voices, needs, and sustainable development priorities.

The future act, as all legal bases for expenditure under the next MFF should facilitate sound decision-making by the budgetary authority, and parliamentary scrutiny. The internal architecture of EU programmes should therefore be mirrored in the EU budget nomenclature through dedicated budget lines.

The amendments by the Rapporteur stress that the EU's Global Gateway should generate reciprocal and demonstrable mutual benefit, enhance safety and prosperity, and support stronger regional integration, and diversification of OCTs economies. The Rapporteur takes the view that financial support which does not meet OECD-DAC criteria for Official Development Assistance (ODA), for instance with private sector companies, should be provided by EU instruments, notably the European Competitiveness Fund.

The suggested amendments also take into consideration the OCTs limited human resources and administrative capacities and aim to ensure that priority is given to simplified access to EU programmes, and to capacity-building and training to make best use of EU support, and of more complex modalities or requirements for capital markets, blended finance or public-private partnerships.

The Rapporteur shares the view that the current geopolitical context underlines the OCTs role as a bridge towards countries of the 'Global South', and that OCTs – provided the EU fully recognises their importance and takes appropriate measures – could serve as regional nodes and foster networks of trusted connectivity, both in terms of hard infrastructure and on a human level. At the same time, the Union must be clear that it is willing to shield OCTs from external pressure and threats, while itself fully recognising their right to self-determination.

Cooperation priorities should be updated to include ocean governance, intercontinental seabed and satellite connectivity, and digital connectivity rather than mere digital accessibility.

The draft report recognises the importance of critical raw materials for the EU's strategic autonomy and for decarbonising economic growth, yet stresses that the OCTs' right to decide on extraction and investment choices must be respected, and that the EU and the OCTs should ensure that local communities benefit through jobs, infrastructure and fiscal revenues. Mining should respect high environmental and human-rights standards, including Extractive Industries Transparency Initiative principles.

In order to strengthen the resilience of the partnership and its democratic legitimacy and participation, the report recommends adjustments to reinforce the active involvement of youth and civil society in shaping the cooperation with OCTs, not least because active citizenship at the local level as much as across borders is crucial in an age of information manipulation and targeted interference in democratic processes.