EU Budget: yesterday’s solutions no longer work today

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Villagers in the Ethiopian town of Lalibela, February 2016. [MattTempest/Flickr]

Those familiar with Brussels’ routines know that, at this time of the year, EU institutions’ representatives gather to agree on the budget for 2017. Negotiations are known to be passionate, to say the least, writes Tamira Gunzburg.

Tamira Gunzburg is Brussels director of the ONE campaign.

After all, the budget’s limits are defined in advance by the seven-year-long Financial Framework, approved back in 2013.

But the world is changing fast and yesterday’s solutions no longer work today.

Since 2013, the EU has a whole new Commission, and new faces populate the European Parliament. Just last year, European and other world leaders signed on to the Sustainable Development Goals, which aim to eradicate extreme poverty by 2030. Today, nearly 900 million people still live in extreme poverty, on less than $1.90 a day. Getting to zero will require substantial new resources, and the EU is still far from reaching its promised funding targets.

EU funds were indeed set aside in 2013 for this goal of poverty eradication. But in the meantime, the world has been confronted with new complex challenges, from global pandemics, violent extremism and weather disasters to protracted conflicts and growing instability. The need for humanitarian financing is at its highest level in decades, and is growing every day. Yet, an ever smaller portion of this need is being met, while the financing has been decreasing, and stands at 33% halfway through this year. Extreme poverty will not be eradicated if humanitarian crises are not properly addressed. At the same time, short-term emergency aid will not be sufficient to stem humanitarian crises in the long term.

One such crisis that has reached Europe, and illustrates this reality, is the refugee crisis. More than one million people arrived by sea in 2015: a more than fourfold increase from 2014. As a reaction, some member states have been responding to the domestic impact of the refugee crisis by using investments intended for overseas to cover so called ‘in-donor costs’ at home.

The Netherlands, for example, gave more aid to itself in this way last year than to the whole of Africa in 2014.The total amount that EU countries spent on refugee costs within their own borders more than doubled in 2015, representing 13.4% of total aid. This means that even fewer funds are available to address humanitarian needs and long-term development overseas.

The EU should remain a safe haven for refugees and must continue to allocate additional resources to support their needs. But this cannot come at the expense of the world’s poorest. When leaders agreed on the annual spending limits for aid back in 2013, they could never have foreseen these crises. In today’s changed world, those limits are no longer enough to address these priorities without forcing deadly trade-offs between them.

That is why ONE is launching a campaign today urging European leaders to increase the aid budget beyond the old ceilings, so that the EU can both respond to the refugee crisis and fulfil the EU’s commitment to end extreme poverty by 2030.

But it is not just about numbers. How and where aid is spent matters. Nowhere is an ambitious increase more needed than in the so-called “Least Developed Countries”. Not only are these some of the poorest countries on earth, which struggle the most to attract private investment, raise domestic revenues, and provide even basic services to their own populations. They also hosted some 4.2 million refugees, compared to 1.3 million in Europe in 2015. And yet, their share of EU aid has been shrinking in recent years, receiving now only a quarter of all development funds, down from 27% last year. The EU must make sure aid is focused on eradicating extreme poverty, especially in the poorest countries.

European leaders are called to answer tough questions, both at home and abroad. Rather than reaching for quick fixes, they should recognise that increasing both humanitarian and development financing is a forward-looking foreign policy move, alongside an enhanced use of other policy tools, such as migration policy, fighting corruption, and supporting regional peacekeeping forces. All these sectors must work collaboratively to effectively address current crises and prevent instability and violence from spreading. Only an ambitious new level of funding can achieve that.

Further Reading

Mimica: Europe's new plan for Africa 'could reach €88 billion'

EXCLUSIVE / One of the keynote announcements of Jean-Claude Juncker's State of the Union address last week was the European External Investment Plan. EU development aid chief Neven Mimica gives the details in an interview with EURACTIV.com