INFOGRAPHIC / Andris Piebalgs, the European development commissioner, has called on EU member countries to compensate the aid cuts from the bloc's long-term budget that were agreed by EU leaders at a summit last Friday.
Speaking at an informal meeting of EU development ministers in Dublin on Tuesday (12 February), Piebalgs said he regretted the deep cuts to the EU budget for 2014-2020.
“Cuts must not cost lives,” Piebalgs said, adding that the EU and most national governments had promised to allocate 0.7% of gross national income (GNI) for development purposes by 2015.
“This is the absolute minimum. Today, the EU stands at 0.42% – just a little more than a half. If the EU wants to address the problem of development, it needs to deliver on its promise,” Piebalgs said.
The EU budget cuts, the Commissioner said, “mean that EU individual member states will need to increase their own national development budget in order for the EU to respect its global commitment.”
European leaders committed to boost overseas aid to 0.7% of GNI at a meeting in June 2005 (see European Council Conclusions, paragraph 27). An exception was made for the 12 new member states that joined the EU in 2004 and 2007, which were handed a lower target of 0.33% of GNI.
Joe Costello, Ireland's trade and development minister who chaired the Dublin meeting, told EURACTIV that the Irish EU presidency would be looking for the older 15 member states to recommit to the 0.7% target.
How big are the cuts to development aid budget?
Comparing the figures agreed by EU leaders a week ago with the Commission's original budget proposal – which kept with the 0.7% commitment – EURACTIV has evaluated the difference at €6.3 billion in total.
The two main pillars for the EU’s development aid are the European Development Fund (EDF) and the Development Cooperation Instrument (DCI). Both have been slashed significantly more than the EU budget as a whole.
Last Friday, EU leaders agreed on a total budget of €960 billion for the EU for 2014-2020, significantly less than the €1.025 trillion originally proposed by the Commission – a difference of at least 6.34%.
The amount reserved for overseas aid in the EDF amounts to €26.986 billion, compared with €29.998 billion in the Commission proposal – a difference 10.1%
Similarly, EU leaders agreed earmarked €20.6 billion for the Development Cooperation Instrument (DCI). However, the DCI calculated as a proportion of cuts to the heading Global Europe, as no breakdowns are available, is €17.3 billion. The difference there therefore amounts to 16%.
Playing with numbers?
At a press conference after the summit, both Council President Herman Van Rompuy and Commission President José Manuel Barroso stated that the budget for development aid had been preserved, and even benefited from a small increase.
However, both referred to the development aid budget for the previous multi-annual period (2007-2014), and not to the Commission's original proposal for 2014-2020, which aimed at keeping with the 0.7% GNI pledge.
Asked by EURACTIV to comment on the reduced budget for development aid, Barroso compared the new figures with the former seven-year period and called it an increase.
“Not big, but an increase. I think we can say the EU keeps its commitments for the poorest of the world,” Barroso said. He added that the Commission would had preferred “bigger amounts”, but in a difficult financial situation, “this was the biggest possible result”.
Where could the missing billions come from?
It is still unclear whether the European Parliament will approve the EU budget for 2014-2020 as agreed by EU leaders.
If the budget is rejected, annual budgets to the level of the budget of 2013 will apply. The impact on development policy is not expected to be too big, but longer-term initiatives such as the Global Alliance for Resilience Initiative (AGIR) would be more difficult to plan and implement.
Could the FTT provide a solution?
Additional finance could come from other sources, like the Financial transaction tax (FTT) recently agreed by 11 EU countries – Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain. Under the ‘enhanced cooperation’ procedure, other EU countries can join at any time.
France said it was willing to allocate 10% of the revenue “to the benefit of the poorest in the world".
It is unclear however how the new revenue, estimated by a German institute at €37 billion per year, would be spent.
“Europe contributes about 60% of money that’s spent on the developing world. But if we don’t have enough, we have to look for other sources. And of course if we want to show the leadership on this, we expect the wealthy member states to cough up,” Costello said.