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Goodbye UK, Hello Austria: EU Presidency Outlook

Less glamour but more responsibility

As the Austrians settle into the driving seat of the European Union for the coming six months, the time is ripe to take a look back at the achievements of the UK Presidency for development, and forward to the agenda of the Austrian Presidency in 2006.
By Denise Auclair.

During the first half of 2005, under the Luxembourg Presidency, several decisions had been taken on the EU’s contribution to achieving the Millennium Development Goals, notably the commitment to reach 0,7% of gross national income for development aid by 2015, twice the level in 2004. In September, the UK Presidency helped to salvage the outcomes of the UN Summit, yet the EU disappointed on development by merely repeating previous commitments, missing the opportunity for collective action on innovative resources for development.

* European Consensus
The Presidency saw through the adoption of the “European Consensus on Development” by all Member States, the European Commission and European Parliament. This was a feat as Member States were wary of their autonomy, but the accomplishment was uneven. On common objectives and principles, the UK skillfully finessed controversial points such as allocation of aid to low- versus middle-income countries while retaining the focus on poverty eradication. But the fight was lost on areas for Community action: despite the Presidency’s wish to better define their added value and limit their scope, the areas are very broad, granting the Commission the flexibility it claimed to respond to differing needs and donor contexts.

The EU Strategy for Africa agreed by the European Council puts policies towards the region at the service of reaching the Millennium Development Goals in 2015. Yet the Strategy fails to bring convincing responses to key obstacles to Africa’s development over which Europe has influence. These include the heavy debt burden of many countries not covered by the 2005 G-8 deal, and unfair trade rules undermining Africa’s agriculture and rural livelihoods.

* Snail-like progress in trade policy
On trade matters, EU Agriculture Ministers agreed on a reform of the sugar market. The cut in prices for white sugar by 36% over 4 years will have devastating effects for many small-scale producers in developing countries, hardly compensated by the € 40 million in assistance promised for 2006. And although Tony Blair’s Africa Commission had recommended that EU-Africa trade agreements not require Africa to open its markets in return for access to European markets, under the UK presidency the EU continued its drive to do just that.

At the WTO, only snail-like progress was made in achieving the Doha development objectives. As one of the most powerful players, the EU bears a major responsibility for the failure. The EU finally agreed to end export subsidies by 2013, but these represent less than 5% of total EU agricultural support. Its so-called "development package" of side-measures scarcely balanced its aggressive demands for market access for services and industrial goods.

The hard-won agreement on the EU budget for 2007-13 during the December European Council gave lustre to the UK Presidency. Within a restrained amount for external relations, funding for development is still unclear. With pressure for increased spending on the Neighborhood and Stability Instruments leaving less for development, it appears likely that Community aid as a percentage of overall EU aid will decrease, reducing the EU’s ability to act as a single global partner for development.

The UK Presidency left a substantial legacy in at least two other ways. The first is in its transparency and dialogue with civil society: the Presidency met regularly with civil society, and encouraged its contributions to policy debates. The second is the decision of the Council to deliberate in public on legal acts where co-decision with the Parliament is required, increasing the democratic accountability of EU decision making.

* Will Europe keep the promises?
In light of events in 2005, the Austrian Presidency will have the less glamorous but just as important job of making sure promises made are kept. Perhaps the occasion of the Presidency may stimulate the Austrians to improve their own credibility, as at 0,23% of GNI for development aid in 2004 they are well behind in their commitment to reach 0,33% in 2006.

The April Council meeting to which Development Ministers are invited will discuss the Commission’s progress report on all aid commitments to date, including on aid effectiveness where resistance from Member States to greater coordination is notorious. The action plan for the EU Africa Strategy will need to be designed. And the vague term of “policy coherence” will need to be given teeth to actually influence EU policy choices based on consideration of their impacts on developing countries.

However, the Austrians have shamefully decided not to hold the traditional informal meeting of Development Ministers, based on the lame argument that they do not have a Development Minister per se, only a Foreign Minister. This would eliminate a crucial meeting to prepare the April Council decisions, and reduce the profile of development within the EU at the very same time it is looking to claim leadership towards the Millennium Development Goals.

* Austrian priorities
On trade, the Austrian Presidency will work towards conclusion of the Doha Round, with the new deadline of 30 April for agreement on full modalities. As Austria has prioritized market access in industrial goods and services, there may be intense discussion on agriculture in order to achieve a comprehensive agreement. Civil society will step up its advocacy against overly aggressive liberalization. And in view of a meeting of the ACP-EU Council of Ministers in May, Austria will prepare the assessment of progress on the Economic Partnership Agreement negotiations. Civil society will hold the EU to account on its commitment to set up a review of the negotiations and to propose credible alternatives to the current proposals.

The 2007-13 financial instruments for development will be finalized in 2006. The Austrian Presidency will need to give direction on the crucial Development Cooperation and Economic Cooperation Instrument, where pressure has been growing to split the instrument in order to have a single instrument dedicated to development. The Neighborhood Instrument will need to guarantee measures for poverty eradication in the developing countries covered, while the Stability Instrument will require further clarification on its coverage to avoid confusion between development and security objectives.

Other priorities for the Austrians include migration & development; at stake is a balanced consideration by the EU of the benefits of migration and ways to address its root causes linked to poverty and insecurity, rather than defensive reactions. At the EU-Latin America Summit in May, the Council will take a decision on opening negotiations with Central America and the Andean Community on Association Agreements. Civil society will follow closely the terms of these negotiations to ensure they are favourable for poor people.

The Austrians could bring fresh momentum on the EU’s role in international organizations and global governance, highlighted in the 2006 Presidency operational programme. For if aid and debt relief remain tied to conditionalities and policies defined by the IMF and World Bank where developing countries have little weight, and if a trade deal remains subject to the negotiating power of the richest countries in the WTO, attaining the Millennium Development Goals in 2015 will remain an illusion, despite the best efforts of the Presidencies.

Denise Auclair is Policy Officer for EU development policy at CIDSE (International Cooperation for Development and Solidarity) and Caritas Europa.

The article was also published in the pilot issue of "World Economy & Development in brief" >>> here.

(Posted: 19 January 2006)

Access to the articles is free of charge during the pilot phase. But as of April 2006, the beginning of the regular subscription period, a special authorization will be required. Subscribers will receive a username and a password with their subscription.

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