EU's aid budget facing cuts despite evidence it will pay for itself by 2020:Campaigners warn reducing European development fund by 11% would leave world's poorest 'paying the highest price'
The EU's aid programmes for some of the world's poorest countries face steep cuts ahead of a crunch EU budget summit starting on Thursday.
With Britain among those calling for cuts, not just a freeze, in the EU's 2014-20 €1 trillion budget, campaigners fear the organisation's aid budget will take a disproportionate hit.
The president of the European council, Herman Van Rompuy, last week proposed cutting the European development fund (EDF), which mainly targets sub-Saharan Africa, by 11% compared with figures put forward by the European commission.
In July, the commission called for €30.3bn for the EDF whereas, last week, Van Rompuy suggested €26.9bn. Van Rompuy has also proposed less than the commission wanted for the EU's overall aid budget. Whereas the commission put on the table €70bn, Van Rompuy put forward a figure of €63.7bn.
"The cut is indeed quite substantial and is notably worrying for EDF. The countries which need it most would be the most affected by the cuts," said a European development official.
Under the 2008-13 EU budget, EDF came to €22.6bn. Technically, Van Rompuy's proposal is an increase on the current budget. But, taking into account inflation, it constitutes a cut in real terms.
"The total amount available for the 11th EDF is proposed at €26.984bn, which represents an 11% cut – proportionally the highest cut in the EU budget, and almost four percentage points higher than average. This must be reversed without delay," said ONE, the advocacy group.
The group, along with the UK'S Overseas Development Institute and the National Institute of Economic and Social Research, last week released a report showing that EU aid would more than pay for itself by 2020 (pdf). ONE's analysis said the €51bn in EU aid that targets the poorest countries would give a 20% return on investment for the EU economy by 2020, equivalent to an €11.5bn net gain for the EU and its citizens.
The report – the first study to quantify the impact of EU aid on donor and recipient countries – said by 2020 the aid spent would give a 0.1% boost to EU gross domestic product (GDP), a 0.2% boost to global GDP, and a significant 2.5% boost to sub-Saharan African GDP.
Several countries have pledged to support EU development aid spending in recent weeks, including France, Denmark and the UK. Denmark, Ireland and the UK have also protected development aid from national budget cuts. The European parliament, in a vote last month, said proposed EU funds for so-called external spending should be considered the "bare minimum".
According to a Eurobarometer survey (pdf), released last month, 85% of EU citizens believe Europe should continue helping developing countries despite the economic crisis, and 61% are in favour of increasing aid. At the same time, 55% think rapidly growing emerging countries should no longer receive aid. Most people (61%) believe aid should focus on countries that have suffered conflict or natural crises.
"Van Rompuy's plans will make no substantial financial savings by cutting aid to poor countries," said Olivier Consolo, director of Concord, an umbrella group of European NGOs. "Instead, some of the poorest people in the world will pay the highest price and could lose vital aid support. EU aid works out at only €1.87 per citizen a month, and saves millions of lives around the world. We urgently need development champions to stand up for the EU aid budget."
Should the aid budget be cut, EU development commissioner Andris Piebalgs and campaigners have set their hopes on a financial transactions tax being pushed by France and other EU countries. They are banking on hopes that some of money raised from such a tax could be put into development.
