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Commission laments EU development aid cuts

Development Policy

Commission laments EU development aid cuts

Farmers gather the harvest in Ethiopia.


All eyes are on the International Conference on Financing for Development in Addis Ababa this week, but the EU is still failing to meet its development targets. EurActiv France reports

Several member states have reduced their development aid budgets in recent months, falling short of the objective of dedicating 0.7% of gross national income (GNI) to international solidarity efforts. This objective was supposed to be achieved by 2015.

“There have always been member states that are very much below the average percentage of GNI directed to official development assistance (ODA) and countries that are above the 0.7% target. Unfortunately, there are more below than above the 0.7 line,” said the European Commissioner for International Cooperation and Development, Neven Mimica.

The Nordic countries have traditionally been reliable donors of development aid, but Finland and Denmark both recently announced major cuts to their ODA budgets.

In May this year, Finland’s new centre right government made the unexpected decision to cut its ODA by 43%, or €300 million.

From its peak at 0.82% of GNI in 1991, Finnish ODA dropped to 0.31%, and then rose steadily to reach 0.6% of GNI in 2014.

NGOs’ fears of a snowball effect were confirmed after the Danish elections in June, when the new liberal-conservative coalition promised to cut ODA from 0.87% to 0.7% of GNI.

Broader trend

But the phenomenon is not limited to the Nordic countries. France, the world’s fifth largest contributor of development aid, has also been chipping away at its ODA budget in recent years. From 0.5% of GNP in 2010, French development aid fell to 0.36% in 2014. This downward trajectory will be maintained until 2017, despite the country’s promise to aim for the 0.7% objective as soon as economic growth is restored.

>>Read: French development aid falls below EU average

Since the 1980s, Luxembourg had consistently allocated between 1% and 0.7% of its GNI to development aid. But the grand duchy also fell below the internationally agreed objective of 0.7% in 2013.

Other EU member states are still struggling to get anywhere near this objective: Italy, Greece, Portugal and Spain, the countries worst affected by the 2008 financial crisis, all allocate less than 0.2% of their GNI to development aid.

The newer members of the EU had accepted an objective of 0.3% of GNI, but are left hovering around the 0.1% mark.

An “unfortunate” choice

With the Addis Ababa conference on development financing taking place this week, the EU members’ cuts have come at an inopportune time.

The European Commission shares this view. “When it comes to Finland and Denmark, these countries are among the highest contributors and therefore, it would really be an unfortunate development if the governments were to decrease their ODA contributions,” Commissioner Neven Mimica said.

“But the overall development and support for the agenda will enable us to collectively keep increasing our ODA contribution. It won’t be an easy challenge to keep everybody on board with the increasing trend, but we as the Commission will do our best to always promote enthusiasm for development in the member states,” he added.

The Commissioner recalled that the European Union spent €58 billion on development aid in 2014, the largest contribution in the world. He said, “If we increase this by €4 billion each year until 2030, then we will be above 0.7% target. This year we will increase our aid by €5 billion.”

Increases to the development aid budgets of certain big donors, like Germany, should make this objective possible.

“The German government continues to stand by its target of allocating 0.7% of GNI annually to development cooperation,” the German Minister of Economic Cooperation and Development, Gerd Müller, said in an interview with EurActiv.

“With a 13.5% increase, our budget shows the highest jump in its history. Funds for economic cooperation and development have doubled in absolute numbers under Chancellor Merkel,” he added.