European development cooperation policy

in the next Multi-Annual Financial Framework 2021–2027
2019

Cristina Linaje Hervás
The Cáritas Española Political Advocacy Team – Partner Organisation of the NGDO Coordinator

The European Union (EU) plans its budget with a long-term outlook by means of a complex negotiation process which relies heavily on the domestic situation of its Member States (MSs), in addition to the difficult balances of power between European institutions; a key negotiation that shapes priorities and necessitates resources to make them happen, conditioning European policies, including cooperation policy, over seven-year periods in both form and content. Despite this, the support this process receives in Spain is not proportional to its importance, and even less so if we bear in mind that Spain is among the five main contributors to the EU budget, or that almost half of Spanish Official Development Assistance (ODA) in 2018 was paid out via European institutions.     

More than two years after getting under way, the negotiation process is still open, and is not forecasted to conclude until the second six months of 2020. Its reference is the legislative package presented by the European Commission between May and June of 2018, on which the outgoing European Parliament (EP) already submitted its position with a report approved in March of this year, welcomed in a favourable light by civil society organisations (CSOs). Nevertheless, we must bear in mind that the Parliament voted for in the European elections held in May this year will take over, once active, the negotiation for the tripartite dialogue — called Trilogue — at the start of November. In the same dialogue, the European Council and Parliament, with the mediation of the European Commission, will look to reach an agreement that requires unanimous support from Member States in the Council and the approval of Parliament.       

The European Council, for its part, is struggling to define its joint position. In these days of Brexit, difficulties are mounting for Member States; the UK is the fourth largest contributor to the Union’s budget, which means its exit leaves a void that, in accordance with the Commission’s global proposal, duly involves a greater effort from the 27 EU countries (EU-27). At the same time, an increase in Member States’ contributions would transmit a sign of commitment with a strengthened EU after a sustained period of identity crisis in the integration project, yet not all countries appear to be on board. In short, at the time of writing this article, in late September 2019, there are still many uncertainties and debates outstanding which must be clarified in the coming months.   

Migration management as a priority

Let’s start from the beginning. Under the title “A Modern Budget for a Union that Protects, Empowers and Defends,” the Commission’s proposal is structured in six major chapters or blocks of public policies, each one specified with different legal instruments reflecting three core areas of priority actions: the competitiveness of the European economy in the digital age, migration management from a markedly defensive approach, and the drive towards a common front with regard to external security. Proof lies in the funds for migration, border management and security being almost tripled and representing 3% and 4% of the global budget. Traditional EU spheres, meanwhile, such as the social cohesion and common agricultural policies, would have 7% and 5% fewer resources, respectively. Adding up to a declaration of intent in these 2030 Agenda times.  

Development cooperation policy in europe’s external action

External action is possibly the area where the two characteristics running through the Commission’s budget proposal for the next two years are specified more explicitly: greater flexibility to deal with unforeseen requirements and changing circumstances, along with a more simplified internal structure of the chapter, which, in practice, involves moving from the eighteen current instruments to just eight. Therefore, the Commission asserts that it is looking for greater coherence and to limit the current fragmentation, which in turn would limit synergies arising between instruments and make it possible for the Union to be “better equipped to pursue its goals and protect its interests, policies and values globally”. The chapter as a whole has an unprecedented total budget of 1.23 billion euros spread over seven years; that is, 30% more resources than the current budget, although the said increase is largely explained by the incorporation of the European Development Fund (EDF), hitherto managed in an extra-budgetary manner.  

The above is specified in the proposal to create a large programme called the Neighbourhood, Development and International Cooperation Instrument (NDICI), endowed with 89 billion euros, which would take on up to twelve instruments linked to areas such as neighbourhood, peace and stability policies, Human Rights (HR) and development cooperation, which currently has specific regulations managed with a degree of independence. In essence, a mishmash of strategic spheres that could engender a high risk of diluting European development cooperation in line with goals defined in agreements to accommodate other short-term priorities related to external security and containing migratory flows. As evidence, the Commission’s initial proposal did not incorporate among the goals defined in the instrument’s articles its alignment with the fight against poverty, the promotion of sustainable development and the exercise of rights inside the framework of the 2030 Agenda. Both the European Parliament and Member States have demanded a clearer and more obvious NDICI alignment with such goals, while Humanitarian Action (HA) would continue to be managed via a specific instrument and with a global budget of 11 billion euros, representing over 8% of the global amount from the external action chapter.    

An international development policy for which goals?

Internally, the NDICI distributes its resources across four pillars. The main one is a geographical pillar and has 76% of resources and two focal points of priority care: Sub-Saharan Africa and so-called neighbouring countries, which together take up 80% of the distributable budget. Furthermore, Africa tends to receive additional funds from the thematic and rapid response pillars, and also potentially the reserve. Asia and Latin America are some way behind with scarcely 14% and 16% of the total resources of the geographical programme, respectively. For its part, the thematic pillar, including initiatives aligned to areas such as Human Rights, the approach to global challenges or strengthening civil society organisations, barely has 8% of resources, representing a decrease of almost 48% with regard to the current Multi-Annual Financial Framework. The European Parliament and some Member States — among them Spain — have stated the need to expand the budgetary share of this pillar and especially the rubric of “global challenges” in line with a working framework within the logic of the 2030 Agenda.

NDICI
Source: prepared by the authors through an analysis of the European Commission’s proposal for the Neighbourhood, Development and International Cooperation Instrument (NDICI).

Finally, the previously mentioned backing of greater flexibility in the management of resources takes shape in the two remaining programmes that make up the NDICI. On the one hand, 4 billion euros in funds would be put aside to finance rapid response actions to tackle emerging crises, establishing links with initiatives deployed under the Humanitarian Action instrument. Furthermore, a reserve of up to 11% of NDICI resources is proposed, representing over 10 billion euros that are non-programmable, which the Commission will make available as a response to a broad and ill-defined set of circumstances via a decision-making process that also lacks clarity. At a time in which the EU’s relationship with a large part of the world appears to be obstructed by anti-immigration bias and other interests of short-termism, the risk of discretionary use, a long way from the real goals of promoting sustainable development, seems a more than real possibility. Thus, the role the European Parliament could play in control over its management will be crucial.         

Salvaging: the role of transversal priorities and sectoral percentages to steer programming and expenditure

One positive aspect in the proposal is the commitment that at least 92% of the expenditure under this instrument is calculated as Official Development Assistance, a percentage that could be increased if the Council accepts the Parliament’s proposal to raise it to 95%. Although it is true that it constitutes a significant safeguard, it is also true that, in a period in which ODA frontiers are widening, ultimately it may not be enough, which is why at the Organisation for Security and Cooperation in Europe there is insistence on the need to establish predetermined allocation percentages by themes and transversal priorities, thereby steering the programming process and serving as a route map to define actions. The European Parliament has largely backed this view and has demanded the inclusion of, inside the construct of the instrument, the following commitments: allocating at least 20% of resources to Least Developed Countries (LDCs); setting aside 20% of expenditure for human development and social inclusion; guaranteeing that 45% of initiatives contribute to the fight against climate change and environmental protection (as opposed to the 25% advanced by the Commission); or that 85% of actions incorporate gender in a central role.         

Nevertheless, this approach comes up against the vision of the Commission and some Member States, who consider that predetermining expenditure percentages by sector and transversal priorities makes little sense given that they must be determined on the basis of the development needs of each member country, specified through political dialogue with each country. The appeal to this agreement attracts attention when, on the other hand, the Commission’s proposal does include at least 10% of NDICI resources assigned to “address the deep-seated causes of irregular immigration and supporting migration management and its governance,” a percentage that could even rise as a result of pressure being exerted on some Member States. Under the same logic, it doesn’t seem well-reasoned either that the cooperation of the member country’s level of cooperation has been incorporated with regard to migration as one of the criteria conditioning resource allocation.

European cooperation with which actors?

We have seen how working with civil society organisations is tied to the thematic pillar with keys to strengthening civic space and networking to foster their involvement in dialogue on development policy-making. That being said, the current proposal does not offer an overabundance of clarity on the exact participation of SCOs and Non-Governmental Development Organisations (NGDOs) in implementating programmes under the geographical pillar, where the bulk of resources lies.

What does seem obvious, however, is that the private sector will see its role fortified in the coming years due to the Commission’s interest in attracting additional investment from this sector in NDICI resources. There will be two main vehicles for such an end: the European Fund for Sustainable Development Plus (EFSD+, an expanded version of the current EFSD), and the Guarantee Fund for External Actions, operating to support the operations of EFSD+. In terms of the volume of resources, the Commission’s initial proposal reached 60 billion euros, but has not fully clarified which of these resources will come out of the NDICI budget. Some voices claim it would be between 10 and 11 billion euros, coming from the geographical pillar. The concerns of SCOs around this instrument are significant and are owing to different reasons that we cannot address in any depth in this article. We can only highlight that the dimension which the Commission proposes to adopt this instrument is not reasonable judging by past experience, and it has not been able to clearly demonstrate its additionality or impact on development, and, moreover, in accordance with the current regulations, safeguards have not be established to ensure financed operations meet environmental standards and Human Rights and do not develop into the privatisation of basic rights such as health and education.

In summary, at the time of concluding this article the open debates and uncertainties around how the European cooperation policy will be ultimately configured in the coming years are large in number, and more so if we bear in mind that the process is taken up again with new representatives in European institutions, following the May elections, and changes to the political contexts of some Member States. What does seem clear, however, is the proposal serving as a reference for negotiation is nothing other than the coming of age of visions and trends that have been unfolding from the European area in recent years: commercial diplomacy, migration management and increased concerns over external security. A debate that is worth persevering with, insofar as it will configure the role the EU is being called upon to play in a global context like the present one.