Wieser slams EU's 'Status Quo+' development reform plans

The European Union’s years-long effort to improve the impact and visibility of its financing in Africa has resulted in a “bad option for development,” according to the head of a 2019 Wise Persons report on the topic. Thomas Wieser told the Center for Global Development and ECDPM think tank last week that the so-called “Status Quo+” improvements being planned for the bloc’s development finance system are a missed opportunity. “I guess the plus was added by some people because they were slightly embarrassed at coming up with something that is only a bit better than the status quo, which is not good,” Wieser said. A former top official in EU policy circles, Wieser chaired the group of development finance experts behind a 2019 report requested by France and Germany. The authors did not express a preference between the three options they proposed of either transforming the European Investment Bank or European Bank for Reconstruction and Development or creating a totally new EU development bank. Though they did write that “maintaining the status quo is not an acceptable option for the future.” A subsequent feasibility study concluded that less radical improvements to the existing system were the most appealing way forward — an outcome referred to as “Status Quo+” in the text. “[The status quo is] a good option for those who are living comfortably within the system, but it’s a bad option for development.” --— Thomas Wieser, chair, Wise Persons Group EU states are expected to agree on policy conclusions on the issue in coming weeks. The latest draft, circulated Wednesday and seen by Devex, avoids the much-maligned expression “Status Quo+,” instead invoking the need for a more “effective, efficient, development focused, coherent and visible” European development finance architecture, without additional costs. But Wieser told CGD that such an approach is not enough. “Without additional money — be it for capital, be it for loans that match IDA [International Development Association] terms — without this additional money, there is no hope that any new or reformed European institution can become a meaningful European development finance actor,” he said. Wieser — who predicted that his critique “will upset some people, but that’s fine” — said the status quo is “a good option for those who are living comfortably within the system, but it’s a bad option for development.” The European Commission defended Status Quo+ at the European Parliament on Monday. Erica Gerretsen, from the commission’s international partnerships department, granted that the name is “not right” but outlined four ways the commission aims to implement the approach in practice: • A new “Team Europe” platform for all European development actors to work together. • A greater role for EU delegations around the world in organizing support for private sector development. • Harnessing the catalytic effect of the EU’s new single instrument for foreign spending. • More visibility for EU actions around the world. Those plans were covered in a working paper from the commission and European External Action Service ahead of a meeting of EU development ministers last month. In the paper, seen by Devex, the commission wrote that it has been working on improving the financial architecture “for some years already” and is “ready to strengthen its role as centre of gravity of the EU financial architecture for development.” That role came under scrutiny in recent months, however, with member states only greenlighting the 2021-2027 development budget alongside an additional declaration asserting the need to enhance their own “strategic guidance” over EU policy priorities. Now, as member states prepare their conclusions on the financial architecture debate, the power game is continuing. The commission is pushing for the council conclusions to emphasize the commission’s role in steering all European development players. And it is opposed to prescribing what the wholly EU-owned EIB and internationally owned EBRD should do next. “The council conclusions do not preempt whatever might happen and whatever conversations might happen in the boards of the banks,” Gerretsen told the Parliament’s development committee Monday. “And therefore the council conclusions in themselves do not close any debate on potential other discussions that could take place in the context of the boards of the banks.” As Mikaela Gavas from CGD told Devex in February, that means if EBRD and EIB continue their respective plans to deepen and expand their investments in Africa, then questions of efficiency and coordination are unlikely to disappear anytime soon. Update, May 13, 2021: This article was amended to clarify details of the CGD-ECDPM event.