EU breaks impasse on aid budget

BRUSSELS — European Union states on Friday backed a compromise on how to spend the bloc’s 2021-2027 development budget, paving the way for a final legal text in the first half of next year. The only problem? Not everyone has the same interpretation of what was agreed.

The breakthrough, after months of negotiations between the European Parliament, European Commission, and member states, provides €79.5 billion ($97.2 billion) for spending under the Neighbourhood, Development and International Cooperation Instrument, or NDICI.

The institutions will now convert Friday’s political deal into a legal text. That process could still generate tensions though, an EU official told Devex on Monday, adding that the agreement should be ready around March for final signing off.

With the overall amount largely set over summer, the most difficult issues over recent months were the links between development aid and migration, as well as the role of the Parliament, which was keen for a greater say in how funds are spent.

Migration

The commission has long highlighted its ability to tackle the “root causes” that push people to leave home, though some member states argued this was too vague and wanted a more explicit focus on support for countries’ border security. As a result, the text agreed Friday states that the targeted 10% of NDICI earmarked for migration should “include actions to address the root causes of irregular migration and forced displacement when they directly target specific challenges related to migration and forced displacement.”

Another flashpoint was whether development funding should be made conditional on partner countries stopping their citizens from traveling to Europe and accepting those whom EU states try to send back — one of the approaches that EU development chief Jutta Urpilainen was instructed to use when she took office a year ago.

Friday’s deal states that the EU will “combine all appropriate tools and the necessary leverage through a flexible incitative approach with, as appropriate within this context, possible changes in allocation of funding related to migration in accordance with the programming principles of this Regulation.”

On one reading, this would allow aid to be used as leverage only in cases of “funding related to migration,” thus offering a concession to the Parliament, whose official negotiating position opposed making aid conditional on migration cooperation.

“For the 10% conditionality is, in a way, not excluded, but for the remaining 90%, no — that’s clear,” Charles Goerens, a liberal deputy from Luxembourg, told Devex. “If everyone can interpret this unilaterally, it won’t work.”

However, a member state source told Devex that the “deliberately ambiguous” wording of Friday’s agreement “means different things to different people” when it comes to using aid as leverage with partners.

Another EU diplomat said that around 10 countries asked the commission Friday to guarantee that the latest language on using aid as leverage would apply to all NDICI funding, not just money going to migration issues. France, the Netherlands, Hungary, and Italy were among those to speak out in favor of this overarching reading, sources said.

Both the commission and Germany, which has represented EU states in negotiations for the past six months and chaired Friday’s meeting, declined to comment Monday on how the text should be interpreted.

Raphael Shilhav, a migration policy adviser at Oxfam EU, told Devex on Monday that it is “extremely worrying” to see the EU planning to use even some of its development work as leverage with its partners. “We hope that the regulation has enough safeguards to prevent political priorities from undermining the global fight to end poverty,” Shilhav added. “The burden will be on the commission to protect the integrity of [official development assistance] and assess the effectiveness of this new leverage approach.”

Governance

One of the main changes for the next seven years is the decision to bring the European Development Fund, a €30.5 billion pot of member state money, inside the EU’s general budget. For the Parliament, that marked a chance for greater say in how funds are distributed.

Friday’s text reveals the assembly’s gains, including greater dialogue on programming priorities with top officials from member states and the commission.

Arguably Parliament’s biggest win, however, is through so-called delegated acts, granting MEPs the right to veto the commission’s choices on topics such as where it deploys budget guarantees and with what risk appetite, as well as which issues it prioritizes in different regions.

Goerens recognized those forms of progress, which he argued were normal powers for a legislative body, while adding that Parliament’s exclusion from final programming decisions at the country level would remain a point of disagreement into the future.

“Programming translates political choices into numbers,” he said. “In the end, we’ve reached an agreement because we can’t prevail on everything [but] ... if the Parliament only stamps the choices made by the commission, that’s not enough for me.”