WHY does the EU find it so hard to choose between self-satisfaction and self-criticism ?

The European Union is proud to present itself as the world’s leading purveyor of public development aid, far ahead of the USA, Japan and the emerging countries. However, EU aid still has a relatively low profile, is not very coherent and sometimes not very efficient.

Let us first take a look at the reasons for self-satisfaction (I) and then at why the EU can also be self-critical (II).

I. SELF-SATISFACTION : THE EUROPEAN COMMISSION PROVIDES MORE THAN HALF OF THE WORLD’S PUBLIC AID TO DEVELOPMENT

Firstly, we shall do some sums and examine the EU mantra (A). We shall then see how the ongoing programs fit together (B) and finally look at the forecasts for 2014-2020.

A. The sums and the EU mantra

On the global scale, the European Union is by far the leading provider of development aid. In 2009, this aid totaled €49 bn, i.e. 0.42% of the EU’s Gross National Income. The EU accounts for nearly 60% of public aid to global development. This is Europe’s biggest foreign investment. “In reality, European development policy covers a system of ‘27+1’ policies – namely the 27 bilateral policies of the 27 Member States + the policy led by the European Commission in the name of the EU – dictated by a shared competency and an obligation to coordination, complementarity and coherence (the three Cs) long ignored.” [1]

The individual States directly fund more than three quarters of this aid, leaving the Commission to provide less than a quarter of the total.

The individual States directly fund more than three quarters of this aid, leaving the Commission to provide less than a quarter of the total. In 2009, the Commission committed €12 bn and spent €10 bn. The sectoral allocation of the public development aid resources managed by the European Commission breaks down as follows : social infrastructures (education, health, water, etc.) 34.7% ; production (agriculture, forestry and fishing, industry, etc.) 14.5% ; multi/intersectoral (environment, etc.) 13.7% ; economic and services infrastructures (transportation, communication, energy, etc.) 10.6% [2]. The aid was delivered to over 140 countries worldwide.

In its 2010 Annual Report on the European Union’s development and external assistance policies and their implementation in 2009, the European Commission underlines its efforts to make its aid more efficient, portraying itself, in the relevant forums, as a front line player. The European Commission sees itself as a “catalyst and coordinator to improve synergies among [EU] Member States” [3]. The college of commissioners claims to be ambitious, careful about the sustainability of the acquis, capable of delegating the implementation of support programs to Member States, attached to the predictability and transparency of aid, capable of working in close collaboration with international organizations like the UN and the World Bank, and concerned to cooperate with local authorities and non-state players … We should add that one of the particularities of community aid is that two thirds takes the form of donations, while most international funding organizations (International Monetary Fund, World Bank) offer refundable loans. In a word, the European Union is well-nigh perfect !

To prove the point, the EU was to raise its public development aid to €69 bn in 2010, true to its collective commitment, made at the G8 summit in Gleneagles in 2005 to raise it to 0.56% of the EU’s Gross National Income. This would mean releasing a further 20 bn for development. It is worth noting that the EU committed to raising its public development aid to 0.7% of Gross National Income by 2015, in order to comply with the United Nations goal. This, as we shall see later, is not yet an acquis.

Behind the figures and the spectacular announcements, it is not always easy to get at the facts.

B. How the ongoing programs fit together

In fact, the European Union’s development aid policy is hard to apprehend as it is split between several envelopes and different instruments. The diplomat Maxime Lefebvre claims that some 6% of the EU’s budget is “devoted to external aid, i.e. a total of around €50 bn for the 2007-2013 [multiannual] financial framework. To which should be added €22 bn from the separately financed European development fund [multiannual] (2008-2013).” [4]

The author is talking specifically about :

. The Development Cooperation Instrument (DCI) and the European Development Fund (EDF) which together amount to €40 bn of development aid.

. The Instrument for Pre-Accession Assistance (IPA), €12 bn targeting the Western Balkans and Turkey.

. The European Neighbourhood and Partnership Instrument (ENPI), €12 bn for the 16 neighborhood countries [5] (10 countries in the South with a total population of around 200 million and 6 countries in the East with a population of around 75 million). Tension exists between Member States as to whether the South should take priority in the allocation of these funds. France would willingly favor the South, while the Central and Eastern European nations have a preference for the Eastern neighborhood [6].

. Humanitarian aid of around €6 bn.

. Foreign policy and crisis response account for €4 bn : one half for the stability instrument, the other for Common Security and Defense policy (CSDP).

It is worth remembering that the European Union is by far the world’s leading provider of public development aid. The aid, however, is hard to assess, reflecting the multi-polarity that is the nature of the EU. In reality, most aid is dispensed by the Member States and less than a quarter by community institutions. Accounts are hard to access, indeed slightly murky [7].

It is also worth noting that the gradual enforcement of the Lisbon Treaty brings legally constraining modifications that could contribute to a reinforcement of the community’s part in European aid. The High Representative of the Union for Foreign Affairs and Security Policy and the European External Action Service might gradually be brought into play to provide a political framework for this.

---

Pierre Verluise, “The Geopolitics of the European Union Borders, Where should expansion stop ?” Eska, 2014.

Pierre Verluise delivers a master stroke with this work that operates on two levels : as a manual of geopolitics and an essay on the Eastern and Southern borders of the European Union. Thorough and informative, it steps outside the box of back-slapping political correction.

Director of the geopolitical Web site Diploweb.com. Pierre Verluise closely monitors the development of the European Union and its borders. He is a lecturer in geopolitics at the Sorbonne. He founded the seminar on European geopolitics at the French “War College”. He is Distinguished Professor of Geopolitics at GEM.

This work offers clear, precise answers to the following questions :

. How far does the European Union still plan to expand ?

. What relations does the EU now entertain with the Eastern countries that were so recently perceived as enemies ?

. How is the EU organizing its relations with the South ?

---

C. What are the forecasts for 2014-2020 ?

On June 29 2011, the European Commission suggested that €70 bn of European Union external aid instruments be dedicated to the multiannual financial framework (MFF) for 2014-2020 [8]. This would be an increase of some €114 bn on the budget provided for in the MFF for 2007-2013. This envelope would essentially be used for development aid policy and the European Neighborhood Policy.

2011. The Commission suggests a doubling of the multiannual amount dedicated to the development cooperation financing instrument.

In terms of development aid policy, the Commission suggests a doubling of the multiannual amount dedicated to the development cooperation financing instrument. This would rise from €10 bn to €20.6 bn.

The European Neighborhood Policy (ENP) would also receive a significant increase. The European Commission envisions a 40% rise in financial support to the 16 participants : Algeria, Armenia, Palestinian Authority, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldavia, Morocco, Syria, Tunisia and Ukraine. The multiannual budget for the ENP planned for the period 2014-2020 would be €16.1 bn, i.e. €4.7 bn more than over the previous period. Following the principles communicated on May 25 2011 for the revision of the ENP, the European Neighbourhood and Partnership Instrument (ENPI) would focus on the promotion of political, economic and social reforms, supporting the priorities defined in the ENP action plans and helping to bring beneficiaries into line with EU policies and standards.

Regarding the overall budget proposed in the 11th EDF – which falls, not under the multiannual financial framework, but under an intergovernmental agreement between EU member countries – the figure of €30.3 bn has been announced. This would represent a rise of some €8 bn.

It is worth noting here that since June 2011, the European Commission appears to have become more attentive to the fight against corruption. This should become an integral part of the policies of all the EU countries concerned, both internally and externally, be they official or potential candidates, neighborhood countries or partners.

Thus on June 6 2011, the European Commission issued the following : “The support for strengthening good governance and democratization granted by the EU as part of cooperation and development policy also covers anti-corruption policies [9]. The Commission follows in this context a partnership-based approach, engaging dialogue with partner countries’ governments and civil society, EU Member States and other donors. While recognizing that without political will inside the country, outside support is unlikely to deliver results, the Commission considers that incentive-based approaches may prove their benefits. [10] The Commission intends to strengthen dialogue with partner countries on anti-fraud and anticorruption issues and its support to capacity building, leading towards the adoption of national strategies to fight corruption in all its forms. During the programming period as well as throughout the implementation process particular attention will be paid to such strategies and their effective implementation.

In line with that objective, the Commission will promote greater use of the conditionality principle in the field of development to encourage compliance with minimum international anti-corruption standards as set out in UNCAC and other international and regional conventions these countries are party to. In the same vein, the Commission will promote a stronger use of the provisions covering anti-corruption matters already existing in the legal bases for cooperation with partner countries, undertaking specific consultations in response to instances of serious corruption cases, and applying sanctions if appropriate measures are not put in place.” [11]
Despite the figures put forward and the publicized good intentions, the EU’s development aid has not escaped criticism.

II. SELF-CRITICISM : WHEN EUROPE DOUBTS

Experts (A), European parliamentarians (B) and the European Union’s Court of Auditors (ECA) (C) are sometimes prompt to scathe the EU’s development aid policy.

A. Is the EU as blind as it is low-profile ?

In 2008, the geographer Yann Richard depicted the European Union as “a trompe l’œil champion of public development aid”. He wrote : “The European Union’s development aid, accounting for around half the world’s annual aid, suffers from structural flaws. It lacks coherence and remains dispersed. The EU is the leading donator in many of the world’s regions but this is a trompe l’œil domination resulting from the artificial addition of aid paid by the European Commission and by the fifteen EU countries that are members of the DAC [Development Aid Committee]. Taken individually, these countries do not often exert real domination in the regions benefitted by aid. Meanwhile, the Commission still only accounts for a minority share of total Union aid. All this undermines the visibility and efficiency of the Union and brings grist to the mill of those who see the EU as a political dwarf. The low profile of its action in development aid reduces the political capital that it could draw from these financial transfers in terms of influence.” [12]

The European Commission’s inefficiency is often readily denounced.

Sprinklings of dispersed European aid are inefficient. Multiplying the number of budget lines and community rules makes it hard to understand, whether for European citizens or the beneficiary countries. Moreover, the European Commission’s inefficiency is often readily denounced. For want of sufficient personnel, the Commission has to outsource much or the management of European aid, generating a lack of transparency and multiplying the potential irregularities. There is a clear contradiction between centralization, control, externalization, dispersal and the fight against embezzlement.

In 2011, Maxime Lefebvre wrote : “European aid is sometimes considered politically ‘blind’ insofar as it is insufficiently channeled towards serving political goals. Many examples have come under the media spotlight : the inauguration by the US Secretary of State in the latter half of the 1990s of Sarajevo airport, even though it was essentially rebuilt with European funds ; the destruction by Israeli bulldozers of Palestinian infrastructures financed by the EU ; and the delegation of European funds to UNDP (the United Nations Development Program) without the European flag visibly flying in places where the money is used.” [13]

Apparently, the European Parliament is sometimes even more critical.

B. The European Parliament’s Committee on Development denounces inconsistencies in the EU’s development aid

On May 5 2010, the European Parliament’s Committee on Development published a critical report [14]. Despite its commitment to Policy Coherence for Development (PCD), the European MPs deplored that the European Union’s “policies undermine development objectives in several ways” [15].

The Committee on Development weighed in with this criticism :

“. In developing countries, markets are flooded by heavily subsidized European products, which contribute to the weakening of these countries’ economic and social infrastructure, exacerbating malnutrition and famine and exposing local farmers to structural poverty and accelerated dependence on external aid ;

. Several countries, such as Malaysia, Indonesia and Colombia, as well as a number of African countries, have set aside large parts of their farmland for agrofuel production to meet the EU’s renewable energy need at the expense of food security and biodiversity ; […]

. The document ‘Global Europe : competing in the World’ containing the EU’s trade strategy shows that the bilateral and regional free trade policy strategies foster the EU’s access to developing countries’ raw materials markets, including agricultural commodities, by opening them to EU large companies at the expense of small scale farmers and infant industry ;

. The EU market access for developing countries is in practice relegated to raw material export, which is less taxed compared to processed goods. This policy perpetuates developing countries in their role as providers of raw materials for EU industry ;

. Financial liberalisation, including speculative and volatile financial flows, over which the developing countries have little control, has generated significant instability at international level with disastrous impacts on developing countries’ economies ;

. The different association and free-trade agreements under negotiation at present risk liberalising the banking and the financial services sector in an irresponsible way, threatening the already impoverished communities with unsafe financial products, speculation, tax evasion etc. ;

. In 2009 the European Commission reintroduced export subsidies for dairy products, which are mainly exported to ACP countries while at the same time markets in poor countries are unprotected. For instance, world market prices for milk dominate ACP countries prices and the high volatility of prices has serious impacts on local farmers and milk industry (including a sharp increase in import dependency and undermining local prices). In Nigeria, where 80% of the population are cattle farmers, the imports of dairy products have quadrupled since 1996, while the EU’s share accounts for 65% of imports ;

. As a major arms exporter, the EU exports or facilitates the shipment of arms across its borders. While the EU provides sustainable amounts of developing aid it exports arms, either directly or indirectly, to the same countries where millions are spent on development funds (the EU-15 spends approximately 70 billion € yearly on development funds, while the value of the EU arms exports amounts to approximately 360 billion € annually) ;

. Also, in the new Fisheries Partnership Agreements, overexploitation of fish stocks will still occur since reliable scientific data to determine a sustainable maximum catch is often lacking. Local fishermen do not have priority access to fishing grounds and will still be harmed by subsidized competition from European vessels. In this case, the local processing industry, which has the highest potential added value in the production chain, receives little support ;

. The EU has put sustainable development, deforestation, related biodiversity loss, climate change and poverty alleviation prominently on its policy agenda. The adaptation of the Forest Law Enforcement on Governance and Trade (FLEGT) Action Plan incorporates all ingredients for a coherent policy approach towards sustainable development. However, in putting these commitments into practice the EU does not show much progress. […]

. Regarding global warming, the EU is not cutting its emissions enough to reach the 2C goal and a rise of the global temperature will first and foremost hit developing countries.” [16]

The European Parliament’s Committee on Development also showed an undisguised lack of indulgence. It even reaffirms a serious accusation : “[…] EU export subsidies for European agricultural products have a disastrous effect on food security and the development of a viable agricultural sector in developing countries” [17]. The French group Doux, specialized in poultry, apparently received 65.5% of European export aid on poultry meat, amounting to a total of nearly one billion euros over a fifteen-year period [18]. It also apparently went through nearly a billion euros of “cattle feed subsidies” to export frozen chicken that had been fed with European cereals. With 66% EU subsidies and consequently sold at slashed prices in Africa and the Middle East, Doux’s poultry was far cheaper than local produce. This type of practice led the European Parliament’s Committee on Development to “call for the cessation of export subsidies […]” [19]. This would not be good news for the – notably French - agribusiness sector which takes advantage of the system. In the meantime, agriculture is not on the list of five areas of action earmarked to be made coherent with European development aid. Could this be the result of influence from Paris ?

We shall leave the last word to an institution with the power to check the sums : the European Union’s Court of Auditors.

C. The European Union’s Court of Auditors has reservations about EU development aid…

A partial success : this more or less sums up the verdict of the special report published by the European Union’s Court of Auditors on February 15 2011 on the subject of “EU development assistance for basic education in Sub-Saharan Africa and South Asia.” [20]

In fact, only 45% of the goals set in the funding agreements were completely reached, i.e. less than half.

Overall, the EU’s action has enabled a number of the improvements targeted in the field of education. Less, however, than planned. In fact, only 45% of the goals set in the funding agreements were completely reached, i.e. less than half. Progress has been slow, modest and partial. More diplomatically, the Court writes : “This is only partial success, but the achievement should not be underestimated. However, it demonstrates how necessary good management is to assure that EU funds are well targeted and monitored to ensure they are used to best advantage.” [21] Carefully chosen words indeed.

The Court of Auditors regrets that the European Commission’s management failed to consistently ensure that EU interventions were appropriately programmed and implemented.

Where aid was delivered by the method of sector budget support, this choice generally conformed to the Commission guidelines. In sub-Saharan Africa, the increasingly frequent recourse to general budget support clearly limited the setting of detailed targets and indicators for basic education, and sectoral dialogue was less intensive. The Court judged that the Commission did not fully consider the advantages of measures for mitigating fiduciary risks such as those used in pooled funding. It further pointed out that the beneficiary governments’ education management infor¬mation systems, on which the Commission relied, did not always provide sufficient, reliable and timely information.

Hammering in another nail, the Court reported : “The EU provided capacity development support [for education] but in most cases it did not work as intended.” [22]

The magistrates candidly noted that in these educational programs, “the EU contribution is only one among many and the [European] Commission has no direct power over implementation.” [23] Thus, the Court recommends the establish¬ment of well-chosen and realistic indicators and targets to ensure that European delegations assign staff with the expertise and seniority needed to main¬tain dialogue with partner governments to help ensure that EU aid leads to the intended results, notably in terms of education quality.

Conclusion

Why does the EU find it hard to choose between self-satisfaction and self-criticism ?

A study of the European Union’s development aid policy reveals a mixed bag of results. The effort expended by the European Commission on communication should not mask the fact that the Member States continue to have control of more than three quarters of the allocated funds and that the level of integration of this policy remains far below what is officially stated. However, it is clear that the EU is at once capable of producing a broadly self-satisfied assessment, while at the same time fostering in-house criticism, notably from the European Parliament and the Court of Auditors. This is the hallmark of a democracy, however flawed.

Looking forward, the European Union’s rank in development aid will be worth monitoring for both internal and external reasons.

Internally, the economic and budgetary crisis threatens the EU’s public development aid. While the planned share of the European Union’s budget could remain above the waterline, the share funded by the Member States could well be shaved down. While, in 2010, France significantly cranked up its public development aid (+16.9%), other countries were already engaged in cutbacks. In 2010, public development aid apparently fell by 12% in Germany, 18.9% in Ireland and 31.1% in Italy [24]. If we consider public development aid not as a volume but as a percentage of GDP, even France was back to its 2005 level in 2010, at 0.46%. This, therefore, is way below the 0.7% threshold advocated by the UN by 2015.

It is all very well for Andris Piebalgs, European Commissioner for Development, to declare that the crisis cannot be held up as an excuse, there are no guarantees that the European Union will remain so generous in the future, as the economic and monetary crisis continues to bite. The EU may even become more demanding. In fact, the European Commission appears to want the EU’s development aid to become increasingly conditional. “The mix and level of aid will depend on the country’s situation, including its ability to conduct reforms. […] Should a country loosen its commitment to human rights and democracy, the EU should strengthen its cooperation with non-state actors and local authorities and use forms of aid that provide the poor with the support they need. At the same time, the EU should maintain dialogue with governments and non-state actors. In some cases, stricter conditionality will be warranted.” [25]

Externally, the EU’s public development aid is already faced with competition from upcoming players : the emerging countries, headed by China and India. These players do not feature democratic conditionality in their development aid, making them less attractive to regimes that are sometimes reluctant to espouse this concern. Their scant interest in fighting corruption also facilitates “communication”. Finally, their company’s offerings come at an attractive price that their European counterparts cannot match. Chinese businesses are very active in the field of infrastructures (roads, railways, energy). Indian businesses are apparently appreciated in the field of agriculture and food, capacity development and intermediary technology transfer.

The correlation between a more demanding European Union and a breakthrough by dynamic emerging countries could change the public development aid landscape in the coming decades.

---

Sparks fly between the EU Parliament and the External Action Service

In 2012, the rapporteur of the European Parliament Committee on Development etched this picture of relations with the High Representative and the EAS.

“Equated by some with integration and by others with supervision, the dissolution of the Commission development services within the External Action Service — still under construction according to Lady Ashton — is no trivial matter. Your rapporteur considers it necessary to remain vigilant, as long as other EU foreign policy departments are casting covetous glances in this direction. In a free, frank and open dialogue, the European Parliament, among others, should be in a position to detect from an early stage any risk of drift on this matter. At the current rate of one meeting per year of the EP Committee on Development with the High Representative for EU foreign policy, we are well short of the mark. While there are no grounds for questioning the sincerity of the EAS representatives, who actively participate in all meetings of the Committee on Development, the true political dimension of the dialogue between this service and the EP is conferred solely by the presence at this committee of the High Representative, who is not exactly making her pressure felt to any excessive degree.” [26] In other words, Lady Catherine Ashton is spectacularly uninvolved.

---

Copyright 2013-Verluise
English Translation : Alan Fell