A tale of two Brussels

You’d be forgiven for thinking that the only squabbling discussions currently  happening at European HQ in Brussels are over how to respond to the Eurozone crisis.

If you think we're joking about squabbling, take a look at Italian MPs this week...

Don’t get us wrong, this crisis really is critical – after all, the economic fortunes of the Eurozone will be felt worldwide.  Europe is the foremost trading partner of African, Caribbean and Pacific countries, in addition to being the biggest aid donor. As this blog outlines, a protracted Eurozone crisis is bad news for the world’s poorest.

However, dealing with the crisis is stealing time and energy from leaders who need to also be talking about the next EU budget, known as the Multiannual Financial Framework – or MFF to its friends.  Now we’ll admit that headlines which have to include the phrase “Multiannual Financial Framework” have somewhat less of a ring than doomsday predictions about the end of the EU.  But indulge us for a moment as we explain why this process is absolutely critical for the poorest of the poor.

The MFF will be the EU’s budget for seven years, from 2014-2020.  The extensive negotiation process started early though – June this year in fact.  This is because the MFF will decide how much money the EU will spend for those seven years and what they will spend it on.  This covers absolutely everything – once the budget is agreed, there’s not much space for bolting on extras.

Although aid spend is only about 6% of this total EU budget, the EU is still the world’s biggest donor and these negotiations are therefore incredibly important for development and humanitarian work.  If aid isn’t in there from the start, then wave goodbye to the EU spending anything on it.  That’s why we’re lobbying to see important issues like Disaster Risk Reduction, missed out in the initial drafts, included.

Negotiations around the budget are not driven simply by accountants and bureaucrats.  The budget setting process is a deeply political one.  That’s why it took Britain only 3 hours to look over the proposed budget in June and flatly reject it.  However, not only do political shenanigans affect how much money is available, they determine the details of how the money will be spent.

For example, it has been proposed that Middle Income Countries (MICs) like India and Brazil should not receive direct development funding from the EU.  The argument is that their booming economies should fund the majority of work to eradicate poverty in their own countries.  Of course this could also be seen as a political decision by countries who wish to expand their own trading areas and diminish their aid bills.

If NGOs wish to change this decision, loud protestation that 75% of poor people live in MICs will not help without being aware of the following political context: and this is where our two Brussels collide.  The EU is currently going cap-in-hand to China and others for bailouts; can they turn round in the next minute and decide to give those same governments aid?  The EU’s top-dog on development Andris Piebalgs thinks not – as he outlines in the video below (jump to 17m 56s for the question).  NGOs seem divided on this particular issue, but that shouldn’t stop us from doing the hard thinking necessary to get involved in this and other discussions.

Debates over details in the budget like this will continue over the next year – even if a crisis in the Eurozone is averted, the political context will remain one of austerity, a deeper public feeling that ‘charity begins at home’ and growing antagonism over aid.  It will be interesting to see how this wider picture begins to further impact the nitty-gritty of the budget setting process.

As Tearfund, we’ve been joining members of BOND and the EU-CORD network in lobbying to ensure that amidst all the political wrangling, the poorest don’t get forgotten.  While at the moment only a few people are following this debate, over time this should increasingly be on all our agendas.  Watch this space!

Comments

  1. laurawebster says:

    Thanks Sarah. Really interesting and I love the parliamentary bust up clip! It is interesting to reflect on the changing global dynamics – with India one of the biggest global economies yet with more people living in poverty than in the whole of sub-Saharan Africa. Personally I think DFID have done quite a good job of defending THEIR aid to India – flagging up that it will be used strategically to help the very poorest and marginalised, to support gender equality, and to encourage the Indian government to develop their own poverty reduction plans (http://www.dfid.gov.uk/Where-we-work/Asia-South/India). Maybe as NGOs we should be supporting the EU to work out how to spend aid in the right way in MICs, which could help them make the case for aid more broadly?

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