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09/12/2016

Aid programmes hit hard by EU budget woes

Development Policy

Aid programmes hit hard by EU budget woes

Commissioner Kristalina Georgieva will become Vice-President for the Budget in the new Commission. [European Commission DG ECHO/Flickr]

The European Union’s humanitarian aid and development aid programmes are being compromised by EU debts, and budget cuts forecast for 2015. EurActiv France reports

Europe’s unpaid bills are accumulating, and with them fears for development aid and humanitarian aid.

Since 2011, the European budget has been amassing unpaid bills, which continue to rise in value. The budget is currently 26 billion euro in arrears, €23 billion of which are owed to the cohesion policy. This impacts the whole spectrum of European politics.

Unpaid bills

“Unpaid bills in the budget category of “Global Europe”, which includes development aid and humanitarian aid, have reached 1 billion euro,” according to a source close to the dossier.

Jacek Dominik, the European Commissioner in charge of the budget, has also raised the alarm. In a speech on 24 September, the Polish Commissioner said that the debts of the Financing Instrument for Development Cooperation (DCI) had accumulated to a value of “14 million euro since July”.

The European Commission says that these arrears relate to payments to the Multi-Donor Food Security Trust Fund for 2009-2018 in Burma.

The lack of funds has also forced the EU to roll back some humanitarian aid programmes. “Some projects in the Sahel region of Africa, the Horn of Africa and Haiti have been postponed,” the budget Commissioner announced.

Paring back humanitarian aid

According to Oxfam, the lack of funding will also affect other humanitarian aid programmes. “The impact of the EU’s current constraints on humanitarian aid is already being felt by the beneficiary countries. For example, aid to Iraqi refugees in Jordan has been reduced. We are sending less aid to Yemen (housing, food security, etc.)” says Hilary Jeune, the head of European policy at Oxfam.

>> Read: EU aid operations hit by shock €400 million funding gap

“Furthermore, NGOs are signalling that food security operations […] in Somalia and Ethiopia are being delayed and that their priority level is being reduced,” she added.

Today, the coffers stand empty. A source told EurActiv France that “the Directorates General responsible for development aid and humanitarian aid have no money left to pay for their projects until the end of 2014”.

2015 budget in danger

The strain on the 2014 budget is in danger of becoming even worse in 2015, as member states have proposed significant cuts to the European Commission budget. These cuts would leave the EU unable to pay its currently outstanding bills and those that would arise in the course of the 2015 budget.

The cut of 2.1 billion euros, equivalent to 1.5% of the total approved expenditure for 2015, will affect a broad range of European projects, but spending on development aid and humanitarian aid “will be the hardest hit by these proposed cuts”, according to a source close to the dossier.

The total budget of the section “Global Europe” could be reduced by 10%, representing €384 million. The budget of EuropeAid, dedicated specifically to development aid, will soak up a large part of these cuts, losing 192 million euros; 12% of its funding.

“This cut will worsen the budget situation next year, all the more because the 2015 budget will be partly consumed by the unpaid bills from 2014, which already represent 36% of the current EuropeAid budget!” a source within the European Institutions revealed.

“Next year, we are in danger of breaking the budget even earlier in the year”.

NGOs have responded to the cuts with disbelief, particularly as the External Action Service does not account for a very large proportion of the total EU budget.

“Only 6% of the EU’s total budget is allocated to the External Action Service, which allows the EU to maintain its position as the biggest donor of humanitarian aid and development aid in the world,” Hilary Jeune from Oxfam explained.

Parliament on the defensive

For now, the European Parliament is united in opposition to the member states’ plans.

The Development Commission raised the alarm, judging that “certain cuts proposed by the Council are unacceptable, given that the Union’s development aid requires adequate funding that should also be acceptable to our partners”.

The final budget will only be made public after negotiations between the European Institutions in mid-October, and a vote in the European Parliament in Strasbourg on 22 October.

Georgieva to the rescue

By a quirk of fate, the current European Commissioner for International Cooperation, Humanitarian Aid and Crisis Response, the Bulgarian Kristalina Georgieva, will be handed the Budget portfolio in the Juncker Commission.

“Kristalina Georgieva is extremely well informed on the budget problems that affect development aid and humanitarian aid,” according to a source from the European Institutions.

The mission letter of the future Commission Vice-President, due to take up her new position on 1 November, says that she will be expected to “address systematic shortcomings of the EU budget”.

Background

The European Union is the world's number one donor of humanitarian and development aid. In the face of budgetary restrictions, member states are trying to bring down their annual contributions to the EU, even if this means slashing certain priority programmes like cohesion policy, Erasmus or humanitarian and development aid.

Timeline

Mid-October: discussion of 2015 budget by European Institutions

22 October: vote on 2015 budget in Strasbourg plenary session

Further Reading