EU aid embraces single instrument theory

Almost three years after the European Union sought to orchestrate most of its foreign spending via one instrument rather than 10, member states, and the European Parliament’s foreign affairs and development committees backed a text this week that does just that.

The Neighbourhood, Development and International Cooperation Instrument — Global Europe, worth €79.5 billion ($94.7 billion) for 2021-2027, will now undergo “legal linguistic revision” before its final adoption this summer.

A €60.4 billion geographic envelope covers objectives such as good governance, climate, and the environment in countries neighboring the EU (€19.3 billion), sub-Saharan Africa (€29.2 billion), Asia-Pacific (€8.5 billion), and the Americas and the Caribbean (€3.4 billion).

Meanwhile, €6.4 billion is foreseen for programs on human rights, civil society, and peace, with €3.2 billion for rapid response to crises. Some 30% of spending must go toward climate issues.

Niels Keijzer, a senior researcher from the German Development Institute, likened the precise targets to sheet music, “and the Commission now has to play it.”

The regulation — 93% of which must be countable as ODA — is also meant to provide flexibility, and proof, as Portuguese Foreign Minister Augusto Santos Silva said this week, that “the EU wants to be a global player.”

“We come from a situation where official development assistance was delivered in grants under seven-year indicative plans,” Keijzer told Devex on Thursday. “We now go to an approach where different modalities such as technical assistance, budget support, and guarantees, will be combined more purposefully, rather than managed separately. Now, the entire budget isn't 'programmed,' but a considerable part will be kept in reserve.”

Some €9.5 billion under the regulation will sit in an “emerging challenges and priorities” cushion for unforeseen needs. And the commission has vowed a bold mid-term review, allowing it to alter its course meaningfully if required.

The text agreed this week reflects the deal between member states in the council and the parliament last December. Among the thorniest issues were who gets a say in what money goes where; whether development assistance should be made conditional on recipient countries’ cooperation on migration issues; and the role of the European Investment Bank vis-à-vis other development banks vying for access to EU budget guarantees.

The latter was resolved by creating three EIB-dedicated windows worth €26.7 billion. However, the other two points remain contentious. There are still varying expectations among EU states and MEPs on if and when the commission should use development money as “necessary leverage” to ensure countries’ cooperation on migration.

And when member countries endorsed the text Wednesday, they added a statement, not yet public but obtained by Devex, reminding the commission that they intend to provide regular “strategic guidance” on all major aspects of the regulation. That follows a similar statement from the commission in December, promising a “high-level geopolitical dialogue” with the parliament twice a year.

“We will have to develop this dialogue into a meaningful exercise,” center-right German Member of the European Parliament, Michael Grahler told the committees Thursday. “Not only looking back in a scrutiny way but looking forward [to] what we want to achieve, which policies we want to be pursued.”

Following a final vote in the parliament plenary, likely in June, these statements — along with one from the commission on migration and two still being prepared by MEPs on strategic coordination and the suspension of assistance — will be published along with the final regulation in the official journal of the EU.