NGOs call out Team Europe for lack of transparency

Aid from the European Union institutions and member states remains insufficient to meet the Sustainable Development Goals by 2030, amid growing concerns over how funds from Brussels are allocated, according to the flagship annual report from European NGO confederation, CONCORD.

The AidWatch report, now in its 17th year, routinely takes the European Commission and European Union countries to task for “inflating” their official development assistance figures with in-donor refugee costs, interest payments on concessional loans, debt relief payments, and tied aid.

This year’s report found that such “inflated aid” represents 13% of all reported EU ODA, falling for the fourth consecutive year.

“While inflated aid across the EU is decreasing, it is not doing so quickly enough,” the report found. “At current levels, if only genuine ODA is counted, the EU will not meet the target of spending 0.7% of GNI on ODA until 2038.”

Other concerns included uncertainty over how much of the EU’s response to the COVID-19 pandemic represented fresh rather than reallocated funding; the fact that in 2019 just 5.56% of EU ODA, including member states and the commission, had gender equality as a principal or significant objective; and the finding that 12.9% of bilateral EU ODA was disbursed through civil society organizations.

In addition, the report noted, “the vast majority of EU ODA disbursed to CSOs comes in earmarked funds, which must be spent on specific projects initiated by the donor,” with only 20.3% for organizations’ core funding.

The report also reprised civil society’s misgivings about the EU’s €79.5 billion ($91.9 billion) Global Europe 2021-2027 budget. “The budget allocation of just 8% to thematic programming is grossly insufficient, and represents a reduction of 29.72% from the 2014-20 budget cycle,” the authors wrote.

And they added their concern that the €9.53 billion cushion for unforeseen challenges, “gives the Commission too much power to allocate huge sums with limited predictability, transparency and accountability.”

At a webinar on the report Wednesday, the commission’s department for international partnerships fought back.

The report asserted that “politics have compromised EU ODA,” through member states claiming the costs of hosting refugees at home as part of their foreign aid contributions, the orienting of aid to try and stop people reaching Europe, and the move to make funding conditional on recipient countries’ taking back failed migrants.

“I don’t see what’s wrong about playing politics, we play it every day. But people depict it as something wrong,” Felix Fernandez-Shaw, a director at the commission, told the webinar. Though the EU has a “strategic compass” he said it has “tried to push progress on the SDGs as much as we can.”

The report also took aim at Team Europe Initiatives, the commission’s plan to complement EU member states’ money in a few key sectors in low-income countries, to maximize the impact and visibility of European development assistance. TEIs have been discussed in regular webinars with member states and development finance institutions, the latest of which occurred this week. But that’s left the European Parliament and NGOs feeling shunned.

The report argued most initiatives have been developed with some of the EU’s largest states — Germany, France, Netherlands, and Spain — and that “partner country ownership seems nominal at best, while all aspects of Team Europe lack transparency, and civil society has so far been largely shut out of the process.”

Addressing concerns on local country ownership, commission official Laurent Sarazin, said the seven-year development assistance plans now being finalized represent the “overlap” between the EU’s priorities and those of recipient countries. “It’s not like we just went and said ‘this is what we want to do,’” Sarazin said.

Jutta Urpilainen, the EU commissioner responsible for development policy, recently ordered an evaluation after she said some EU delegations had been too “passive” in consulting local authorities and civil society during the programming process.

Meanwhile, EU member states are also eager to ensure the TEI process does not run ahead of traditional programming.

According to a recent paper from the German Development Institute, the commission is supposed to contribute no more than 70% of the total funds of each TEI, and no more than 50% in sub-Saharan Africa and other places where enough European actors are present.

That’s led to plenty of interest, including from EU states at this week’s closed-door meeting, on how the TEIs will be implemented and how they connect to the commission’s broader seven-year plans for each country, which must be approved by EU countries.

“I don’t like the phrase ‘governance of TEIs,’” Sarazin said during Wednesday’s webinar. “TEIs are initiatives of coordination, most of them are country-level, so there is not really governance.” He said there was a “very light and informal process” between the commission and member states on the TEIs, but “that doesn’t really match the word ‘governance.’”