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EU budget deal freezes foreign aid spending

After tense negotiations in Brussels, European leaders reached a historic budget-cutting deal on Friday – but appeared to have spared foreign aid.

The €908 billion deal cuts the EU budget for the first time, and it effectively freezes the regional bloc’s aid budget at current levels – a win, perhaps, for a nervous aid community which had lobbied for a slight funding increase but feared drastic cuts after a proposal that stalled last November included just that.

Still, the agreement may make it harder for European member states to reach their goal of spending 0.7 percent of gross national income on development cooperation by 2015, a challenge that several aid officials noted Friday afternoon.

“The consensus reached today could have potentially negative consequences on the ability to achieve global anti-poverty goals, especially in Africa,” said Natalia Alonso, head of Oxfam’s EU office. “It comes short of what’s needed to tackle pressing global issues, from sustainable development and increasing disasters, to food security and social justice. It will undoubtedly also impact negatively on the ambitions of Europe as a global player.”

Izabella Toth, board member of CONCORD, the European Confederation of Relief and Development NGOs, said” “EU leaders have dealt a blow to an ambitious future development and humanitarian budget. Instead of supporting a strong aid budget to meet global challenges, and honor their aid commitments, EU leaders have chosen short term fixes over long term strategic thinking. Unfortunately, this comes as little surprise, as several key member states that traditionally support aid have been extra quiet in these negotiations.”

The deal allots 14.7 percent less to foreign aid than the European Commission proposed last July, according to CONCORD. Then, the commission proposed spending €51 billion on development and humanitarian aid, including €21 billion for the Development Cooperation Instrument and €30.3 billion for the EDF.

Friday’s budget deal allots €27 billion – a cut of €3.3 billion, or 11 percent compared to July’s commission proposal – to the EDF, an “effective freeze compared to current levels,” according to the ONE Campaign. The agreement also cuts €11.3 billion, or 16 percent, off the “Global Europe” budget proposed last year. The Emergency Aid Reserve will receive just under €2 billion, one-fifth less than under the commission’s July’s proposal.

The EDF is technically a separate fund outside of the EU’s main budget, but it is part of the multiannual funding framework negotiations. By 2021, the European Commission intends to make it part of the EU budget.

The DCI is part of the EU’s so-called heading 4, which the European Commission last year suggested allotting €70 billion for; Friday’s budget deal allots €58.7 billion – €11.3 billion, or 16 percent – less.

The deal calls for 90 percent of the EU’s overall external assistance to be counted as official development assistance, meaning it should go toward least-developed and middle-income countries instead of more advanced nations and territories in transition.

The budget still needs the consent of the European Parliament.

Rolf Rosenkranz – The Development Newswire.