Amid populist tensions, EU aid advocates weigh next move in budget battle

BRUSSELS — When the European Commission proposed bringing most of the European Union’s external spending under a single instrument for the 2021-2027 budget earlier this year, it left members of the European Parliament and NGOs with a dilemma. Both had previously opposed the idea, with some arguing it would make it easier for short-term political objectives to undercut long-term development goals.

Now civil society and MEPs — who passed a resolution against a combined neighborhood and development tool in March — must decide whether to defend their original position or to negotiate on the basis of the proposed €89.2 billion ($103.3 billion) Neighbourhood, Development and International Cooperation Instrument, hoping to win improvements in time for European elections in May. That’s when the commission wants to conclude negotiations with parliament and member states in the council. Much also depends on what the EU countries decide. Without their support, any attempt to split the NDICI is a non-starter.

As the players weigh their options during the midsummer lull, activists told Devex they are increasingly concerned about next year’s European elections. With populist governments in Italy and Austria, some NGOs worry that more Eurosceptic parties in the European Parliament, combined with populist commissioners nominated by member states, could see more claims on development money for issues such as border security and migration.

Last month, EU foreign affairs chief Federica Mogherini hinted at fears of what might be to come when she addressed the foreign affairs and development committees in parliament. “We know, all of us here in this room, that we have faced pressures in these recent years to divert development funds for other kinds of ‘emergencies,’” the Italian said, with air quotes as she explained the need for a proposed €10.2 billion cushion for “emerging challenges and priorities.”

Both Mogherini and her colleagues managed to resist that pressure, she said, “but we think it would be wise to avoid [a situation in which] our successors would face similar pressures.” The cushion could be used to absorb crisis needs, she suggested, “making sure that development money will only serve long-term development-related goals, and there will be no temptation or no pressure to move it.”

“We don’t know what kind of commission we are going to get,” said Jonathan Beger, director of EU advocacy at World Vision EU, adding that there is no guarantee that responsibility for the development portfolio won’t go to a country with an anti-migration agenda.

That has led some activists to consider whether they would be better off negotiating the next long-term budget quickly, even if that means doing so on the basis of the commission’s combined instrument, rather than risk talks continuing under the new regime in 2019.

Kasia Lemanska of Global Health Advocates, who is working with European NGO confederation CONCORD on the EU’s long-term budget, said that the architecture matters less than the final outcome. If political winds are blowing in favor of a budget deal by May, she said, civil society can still pursue its agenda of protecting development spending within the single instrument.

“For the parliament that would probably be a good solution, and for us … it wouldn’t be the best but it wouldn’t be the worst,” Lemanska said. “Now the question is: How do you strengthen the regulation? Splitting it is one way to go, but not the only way to go.”

The confederation expects to agree its formal position at a meeting next month.

Currently, the EU’s development work is undertaken through multiple funding streams with particular thematic or geographic focus areas, but the European Commission is proposing uniting them into a single instrument, covering most of its external spending, to offer more coherence.

NGOs have a long list of concerns: References to civil society in the proposal appear only in annexes, which can be amended; gender equality is included under the heading of human development, which they fear could signal a drop in funding for both; the benchmark for spending on climate objectives is up from 20 percent to 25 percent, which they say is insufficient; there’s an overemphasis, they say, on geographic spending and flexibility, rather than thematic priorities; it’s unclear which EU department will allocate resources; and there is little guidance on how the expanded role of blended finance and private sectors guarantees will work under the new, souped-up European Fund for Sustainable Development.

The parliament meanwhile, is waiting for the response of member states in the council. There, contentious elements will likely be the inclusion of spending for the EU neighborhood — those countries surrounding Europe’s borders — as well as the European Development Fund, which was previously outside the EU budget.

“If both of those strings are pulled then the whole rationale [of the single instrument] I think falls down,” said Alva Finn from Save the Children, who is also following the long-term budget — or Multiannual Financial Framework — for CONCORD.

The parliament has elected four rapporteurs to examine the NDICI under the joint committee procedure: Two from foreign affairs and trade and two from the development committee. But, as Lemanska explained, with more MEPs on the foreign affairs committee, “whatever the position of DEVE [development committee] may be, if they don’t manage to convince AFET [foreign affairs and trade] they are just going to be outvoted.”

So far, of the political groups within the European Parliament, only the Greens have declared their position publicly, calling for the commission to go back to the drawing board and abandon the single instrument idea.

The split between committees also highlights the organizational challenges posed by the commission’s proposal, which would replace the current system under which EU assistance is funneled through about 10 different instruments, such as the European Instrument for Democracy and Human Rights.

“I know that some of you would prefer separate instruments,” Mogherini told MEPs, adding that this would pose less of an organizational challenge to other arms of the EU too. But she said the question was whether “we put our comfort zone ahead of what we believe could be needed in terms of instruments to be effective as global player for the European Union? … We have put on the table an innovative proposal out of our experience and out of the needs we see to guarantee coherence, most of all coherence, and an impact.”

Perhaps most alarming for NGOs, is the omission of the pursuit of the Sustainable Development Goals as one of the objectives in the legally-binding regulation for the NDICI. Development commissioner Neven Mimica and Mogherini sought to allay concerns last month, with Mogherini telling MEPs “this proposal will serve the Sustainable Development Goals [and] the European Consensus [on] Development [the EU’s development framework] with the primary aim of poverty eradication, that is clear to us.”

But it’s not yet clear to everyone else. “No one understands what the Commission is thinking,” said Beger from World Vision on the lack of poverty eradication and sustainable development language in the proposal’s objectives. “It would be astonishing if it were just an oversight.”