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08/12/2016

France rows back on development aid cuts

Development Policy

France rows back on development aid cuts

A farmer prepares to plant his crops in Malawi.

[Department of Foreign Affairs and Trade/Flickr]

After four consecutive years of cuts, France will stabilise its aid budget in 2016. This is a first step towards the €4 billion increase promised by president François Hollande. EurActiv France reports

The additional €4 billion for climate action and development aid promised by the French president at the UN in September will be several years in the pipeline.

After originally presenting another reduced development aid budget for 2016, the French government has back-tracked and submitted an amendment to bring the situation more in line with its promises. For the first time since 2012, the official development assistance (ODA) budget will not be reduced in 2016.

The amendment submitted by the French government on 13 October proposed to increase the share of the Financial Transaction Tax (FTT) allocated to development aid from €160 to €260.

>> Read: French development aid declines

Another amendment, allocating an additional €50 million to countries bordering Syria (Turkey, Lebanon, etc) will also be tabled. “This contribution will be entirely funded by savings on state operating costs,” a source close to Annick Girardin, the secretary of state for development told EurActiv.fr.

Channelled through the World Food Programme and the UN Refugee Agency, and supplemented by a further €20 million from the French Social Development Fund, this extra funding will cancel out the cuts originally planned by the government.

“In this budgetary context, the stabilisation of the ODA budget is a substantial effort, and we are satisfied with it,” a government source said. This brings to an end four years of cutbacks.

Chronic decline

Since 2012, France has cut national spending across all sectors. The country’s development aid budget has been hit particularly hard: in four years it has plummeted by €700 million, taking France ever further from its target of spending 0.7% of gross national income on ODA.

>> Read: France cuts its development aid more than Greece

But this year, the presidential promises made at the adoption of the new Sustainable Development Goals and ahead of the upcoming COP 21 in Paris have kindled hopes of a change of direction.

“We have checked the decline of development aid for 2016. We now have four years, until 2020, to push the budget back up,” our government source said.

That is assuming the left stays in power after the 2017 presidential election.

>> Read: French Parliament launches aid budget rescue package

At the UN General Assembly in September, François Hollande committed to increasing France’s official development assistance budget by €2 billion by 2020, and announced a further €2 billion specifically for the fight against climate change. In total, these €4 billion will include “at least €350 million of grants” by 2020.

But these extra finances will not materialise in 2016, and still no guarantee has been made for 2017.

The promised increases depend heavily on the success of the merger between the French Development Agency and the Caisse des Dépôts et Consignations, the public financing group. By lightening the regulatory burden, Paris hopes this union will boost the financing capacity of the French public development bank.

Members of the French parliament, who are currently examining the draft budget, are beginning to lose patience with certain decisions.

“We should be providing at least five times more grants,” said the Socialist MP Pouria Amirshahi. “France is not the worst, but there are serious questions over the strategic vision and the means given to development assistance,” he added.

>> Read: Oxfam: ‘French 2016 budget contradicts development promises’

Background

As part of a policy of budgetary consolidation, France has reduced its aid budget by more than 20% since 2012.

With several important international agreements due to be finalised in 2015, the French president, François Hollande, has promised to provide extra funding to the fight against climate change in poor countries.

The United Nations General Assembly adopted the future Sustainable Development Goals (SDGs) in September 2015. Following on from the Millennium Development Goals, which expire at the end of this year, this international framework aims to mobilise and coordinate the efforts of all countries to make the world a fairer and more sustainable place by 2030.

The 195 United Nations member states will meet in Paris in December 2015 to try to reach an international agreement that will keep global warming below +2°C.