MEP Pedro Silva Pereira: Austerity-minded countries are wary of providing more ODA

Pedro Silva Pereira [Georgi Gotev]

The European Parliament hopes to contribute to a strong EU position at the International Conference on Financing for Development in Addis Ababa next July. But some EU countries are concerned about having to allocate more resources to official development assistance, MEP Pedro Silva Pereira told EURACTIV in an exclusive interview.

MEP Pedro Silva Pereira (S&D, Portugal) is Vice-Chair of the European Parliament Constitutional Affairs Committee and member of the Committee on Development

He spoke to EURACTIV’s Senior Editor Georgi Gotev

You are in charge of the European Parliament report for Financing for Development of the post-2015 development agenda. I understand that the vote is expected in May. Can you briefly explain what’s at stake with this report?

The European Parliament report will be a reaction to the communication recently presented by the European Commission [A Global Partnership for Poverty Eradication and Sustainable Development after 2015]. The Parliament position will be an input ahead of the International Conference on Financing for Development in Addis Ababa [13-16 July 2015].

This is a very important and defining moment for the future and in terms of shaping policies for the development. This year, we will have three major conferences, the one I mentioned in Addis Ababa, the in September in New York another conference on the sustainable development goals, and finally in December we will have the conference in Paris on climate change.

What the European Parliament will surely insist is that the European Union keeps a leading role in these global negotiations. The EU is already the major donor in ODA [official development assistance] and we want that to continue, despite the fact that a commitment is needed also from our major partners in the international community.

At this stage, we are still preparing the European Parliament report. This is my task as rapporteur, in dialogue with other political groups. My first impression is that we should welcome the political will that was shown by the Commission and all its efforts to show policy coherence, but I’m afraid we have a certain lack of commitment regarding the financing of development.

Lack of commitment from whom?

At this stage, from the European Commission, taking into account the communication which was presented. Because in fact the Commission says the EU should be ready to meet the 0.7 target [0.7 refers to the repeated commitment of the world’s governments to commit 0.7% of rich-countries’ GNi to ODA], provided that the same commitment is adopted by other major partners, and in a timetable that has still to be agreed with other major partners.

So you say too many caveats?

Yes. If the EU wants to have a leading role in the process, it should lead by the example. In this particular case, it’s not enough to announce that we are willing to reconfirm the target of 0.7. We should present a timetable, and also a mechanism of monitoring in order to show that this time this is for real.

Let’s be realistic. Sweden and Luxembourg are above of 1% of GNI, Denmark and the UK are above the 0.7%, but as recent communication from the Commission has shown, most EU countries lag far behind. But let’s face it, many countries are in a difficult economic situation. Your country, Portugal, is under program, and the Troika, or the institutions as they are called now, require austerity and belt-tightening. How about that?

It really depends on the timetable we have to present. It has to be realistic. Of course, if you want to lead by example, we shouldn’t follow the example of Portugal, because it is true that the country is far from complying with its commitments. But the European Union can do it and our task is to be credible. For that purpose, I think it is possible to establish a timetable in order to meet this target. And if major economies in the EU are ready to do their part, I think the European Union can meet the target, yes.

So what’s the added value from the European Parliament? Adding a calendar to the Commission paper?

At least I believe the European Parliament will press for a more clear commitment from the European Union in Addis Ababa. And in doing so I think we are also contributing for a global discussion which is not only about official aid. Because there is much more than the ODA. We have to consider the need to mobilise all available domestic resources, even from developing countries, and we have to involve the private sector, so we want a much broader debate on financing in Addis Ababa.

But if we enter the debate with a position which is not clear, that will be a pity. There are two more important topics which should be at the centre of the debate. The first has to do with international tax cooperation. In fact we have to mobilise the available domestic resources, and that is only possible by improving the tax system of developing countries and applying a much more reasonable and effective international tax cooperation.

The other issue has to do with the alignment of the private sector with sustainable development goals, How can we ensure that investments contribute to the sustainable development goals? What do we need to change in the international financial instruments in order to achieve this result? Those are the issues we will need to discuss.

The latest leaks from HSCB have revealed that developed and developing countries are depleted of tax revenue. What will the European Parliament do to address this problem?

We will have a separate report on tax issues. The intention of the Parliament is indeed to contribute in that area and I think this is really essential.

A recent report has shown that the total volume of ODA is more or less equal to the total volume of income depleted as a result of tax evasion. ..

We held in the Parliament a number of discussions with NGOs. Also major financial institutions draw our attention to the fact that an improvement in the fight against tax evasion and tax avoidance would bring even more resources than those which are now available through ODA. But of course we need there three pillars: we need the pillar of domestic resources, we need the pillar of private sector financing, and also international public financing, which is still important. Those who say ODA in the future will not count are wrong, it will still be important for the next 15 years.

What we are talking about is how to finance the future MDGs. Is that correct?

Yes, in their new form of the new sustainable goals for the next 15 years, which are under review.

So there is no fundamental divergence between the Parliament and the Commission?

We have a good dialogue with the Commissioner [Neven] Mimica [responsible for International cooperation and Development], but I would say that the European Commission takes into account the need to adopt a European position in the Council. And there might be some problems, because some countries are not ready at this stage to adopt commitments about the financing of development.

You are a member of the European Parliament, you don’t need to be diplomatic. Can you name those countries?

What we’ve heard from the Commission and from the Presidency of the EU is that on the one hand you have the countries that are far from the 0.7% target, which are concerned from the idea of having to allocate more resources to ODA, and also those who are promoters of the austerity policy. And this is less for budgetary reasons than of not wanting to adopt compromises. That’s the real political problem of commitments.

Of course, we understand the European Commission has to find a way through all these obstacles, and I believe the role of the European Parliament will be to push for concrete commitments of the EU. That will be useful for the successful negotiations in Addis Ababa.

It seems to me, and you will correct me if I’m wrong, that the European Parliament is largely united when it comes to voting on development issues.

Yes, I can confirm that. The first exchange of views we had on financing of development has shown a large consensus among all political groups.

So you don’t expect a flurry of amendments?

I expect a constructive approach from all political groups.

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