Pitfalls for foreign aid in 2013 EU budget proposal

Brussels is still reeling from last week’s failed multiannual budget negotiations, but a more immediate challenge lies ahead: finalizing next year’s EU budget and with it, the regional bloc’s commitment to international development.

The European Commission has just released a revised 2013 budget proposal, weeks after negotiations broke down between the European Parliament and the European Council over an earlier proposal.

Building on that proposal, first released in May, the new, revised draft is meant to be a “compromise” to get people back to the negotiating table before the year is up.

Compared with the earlier draft, the new proposal would more generously fund EU external affairs, including development cooperation. Commitment appropriations are set at €9.58 billion ($12.42 billion), higher than the €9.47 billion allocation under the May proposal. Payment appropriations, however, are slightly lower from €7.31 billion in May to €7.27 billion.

Aid spending under the new proposal is not much different from the one released in May. Compared with the 2012 budget, more money would be spent on EU neighbors and countries eager to join the regional bloc. The allocation for the Development Cooperation Instrument was revised from €2.62 billion to €2.64 billion. Commitments to humanitarian assistance and emergency aid reserves are slightly higher as well: €865.3 million and €264.1 million, respectively.

But the aid community remains concerned. Under the multiannual financial framework, the EU external affairs heading has a €9.59 billion ceiling for 2013. But the draft budget’s allocation is nearly €12 million lower. The aid community fears this may portend lower-than-desired funding levels for EU external affairs in the next seven-year budget framework.

Karen Schroh, head of Plan’s EU office, called the newly released budget proposal a “worrying sign,” arguing that development and humanitarian aid might again “come off worst for the sake of compromise.”

“The numbers have been shuffled around a little but yet again we see that heading four [which covers the European Union as a global player] is the biggest casualty as the payments earmarked for external action, including development and humanitarian aid, have been cut more than other areas,” Schroh told Devex. “Last week, [European] Commission President José Manuel Barroso made an impassioned plea in support of development aid but this proposal doesn’t reflect that commitment.”

Prior to last week’s failed multiannual budget negotiations, Barroso was said to be on a “collision course” with European Council President Herman Van Rompuy, whose proposed €65.65 billion spending cap on external action is significantly lower than the former’s €70 billion request.

If no 2013 budget is approved by the end of this year, funding will continue at this year’s level, which the European Commission says will have “detrimental effects” on the implementation of key EU policies and programs.

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