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The EU Presidency Outlook for Development

Austrians head for the Finnish

With the warm summer days upon us, it’s time for a pause to consider how the Austrian Presidency has measured up in its leadership on development, and the state of affairs heading into the Finnish Presidency starting in July. After the EU’s high-profile political commitments on development in 2005, the sign of the Austrian Presidency in the first semester of 2006 was implementation. Finland will place its Presidency under the banner of Policy coherence for development. By Denise Auclair.


The year began under the shadow of the Financial Perspectives, following the agreement by EU leaders in December on an EU budget for 2007-13 severely reduced in ambition. In this context, the Austrians chose their battles, and development was not one of them. The signal given by the cancellation of the traditional informal meeting of European Development Ministers was translated into talks on where to spend the EU’s common budget. In the financial framework through 2013, years crucial for accelerating towards the achievement of the Millennium Development Goals, the weight of Community aid as a percentage of overall EU aid is forecasted to drop from its current 20% to barely 13%. The future, say the Austrians, is in bilateral aid.

* Stagnating aid levels despite commitments
Yet on the question of Member States’ bilateral aid promises, the Presidency tread softly. Already, aid levels are stagnating despite the major commitments of last year. Both European civil society and the OECD donor club (DAC) pointed out that a significant proportion of aid in 2005 came from debt forgiveness to only two countries, Iraq and Nigeria (>>> How European Governments are Inflating Aid Figures). With fingers pointed at Austria as one of the most guilty Member States at over 50% of its aid going to debt forgiveness, the Presidency was left on shaky ground to be able to encourage others to keep their promises.

So, are developing countries now doomed to dealing with an increasing cacophony of 26 different EU donors’ bilateral policies? There are some reasons to hope not. Under the Austrians’ watch, the European Commission presented a challenging set of proposals on aid effectiveness. The Presidency was able to manage the sensitivities of Member States opinions’ on the best way to co-ordinate, fostering a level of agreement on ways to work more closely together. This should bring tangible benefits to developing countries, allowing them to take the leading role in managing national development strategies, rather than having to spend all their time responding to individual donors’ requests.

After the “how much” and “how” of aid policies, the Austrian Presidency has seen some distinct challenges on the “what” of development spending. At Community level, the Austrians demonstrated determination to wrap up negotiations with European Parliament on the 2007-13 legislative Instrument for Development, at the price of many long nights in the Council examining amendments. The Presidency has evolved favourably in relation to the Parliament’s insistence that the Instrument be focused on development countries and development objectives only. However, the risk remains that an interpretation is agreed which allows funding for development to be diverted into measures that respond more to the EU’s own interests such as security, or migration control.

* Africa and Latin America: Deaf to the poor
Such EU interests have also remained dominant in the EU’s Strategy for Africa. Despite criticism from civil society on the one-sided nature of the Strategy, which is not fully in line with the priorities and interests of poor people in Africa, the Austrian Presidency concentrated on moving ahead with implementation. This was also reflected in the EU’s unilateral decision to take a further € 300 million from the 10th European Development Fund for the Africa Peace Facility, making a temporary and last-resort funding agreement decided in 2003 into a permanent diversion that reduces funds available for poverty eradication.

The EU’s relations with Latin America and the Caribbean also received high attention under the Austrian Presidency. The fact that the fight against poverty, social cohesion and human rights were on the agenda of the May summit between the two regions’ leaders was positive. However, despite impressive mobilisation by civil society organisations from Latin America and Europe gathered in Vienna, EU political leaders led by Austria remained deaf to the call of people in poverty. Priority was given to promoting bi-regional free trade agreements and trade liberalisation, neglecting the need to review the impact of agreements on the lives of poor people and to protect small-scale farmers. At the same time, in the multilateral arena, a key deadline for concluding World Trade Organisation negotiations was missed on 30 April, with much of the blame laying with the EU. The EU’s push for market access for its multinational companies, while refusing to make concessions protecting agriculture and the livelihoods of farmers in developing countries, stalled the talks.

In terms of openness to dialogue and transparency in decision making, thanks to the insistence of Austrian civil society several fruitful meetings were held with the Austrian government, including at the highest levels with Federal President Heinz Fischer and the State Secretary for Development Hans Winkler. This established important lines of communication on EU matters, which will last beyond the Presidency. Finally, Austria has demonstrated considerable leadership by proposing to extend the UK initiative on transparent discussions in the Council to all deliberations on legislative acts under co-decision. Approval by EU leaders of this proposal on 15-16 June would go a great way towards lifting the shroud of secrecy around EU decision making that contributes to alienation by many European citizens.

* 2-3 October: Civil Society conference in Helsinki
Beginning in July, Finland will place its Presidency under the banner of Policy coherence for development, namely the extent to which other policies contribute to, or undermine, development objectives. Certain Member States have started to make progress in this area, integrating considerations of the development impact of policies at an early stage of their discussion. The role of the Finnish Presidency will be to stimulate this dynamic at the broader EU level, getting those countries beyond the virtuous few, as well as the EU institutions, to take a hard look at how their policy making processes stand up in the light of development. Finnish civil society will organise a major conference together with the government on this topic on 2-3 October in Helsinki.

* 16-17 October: Trade and Development ministers in Luxembourg
The focus on policy coherence for development is also the rationale for a first joint meeting between European Trade and Development Ministers on 16-17 October in Luxembourg. Civil society will appreciate such an opportunity to challenge Ministers in their approach to multilateral trade talks and bilateral regional relations. The bulk of the negotiations on Economic Partnership Agreements with Africa, Caribbean and Pacific countries will take place under the Finnish Presidency.

Speaking of Africa, the Finns will have the challenge of putting forward proposals for a process to reach a truly joint EU-Africa Strategy that reflects priorities and approaches shared by governments and citizens in both regions. This will be key as discussions on the programming of the 10th European Development Fund (2008-13) continue, in order to maintain the integrity of the Cotonou Agreement and its principle whereby developing countries take the lead in defining strategies and spending choices. The December European Council will need to go beyond a public relations exercise and take a hard look at whether the policy direction and implementation of the EU’s Africa Strategy is actually making a difference towards the attainment of the Millennium Development Goals.

* Africa as test case for the European Consensus
As the first regional strategy under the European Consensus on Development agreed in November 2005, the Africa Strategy should also serve as a test case of the value of this Joint Policy Statement on European development policy, one year after its adoption. Importantly, the Finns have pledged to look more closely at the achievement of better results through development co-operation. After all, it’s very fine and well to elaborate policies and procedures, but what really counts is seeing the difference in the lives of women and men in developing countries. And this should be both the starting and the finishing point of any policy for development.

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

Recommended citation: Auclair, Denise (2006) ‘The EU Presidency Outlook for Development. Austrians head for the Finnish’, World Economy & Development In Brief, 2/Jun-Jul (www.world-economy-and-development.org)

Posted: 19 June 2006.

* More on the subject:
>>> EU Council Meeting: More, and More Effectiv Aid
>>> Goodbye UK, Hello Austria: EU Presidency Outlook

Between Geneva, Singapore and Heiligendamm / Global Structural Policy for Africa's Development?


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