New EU budget: not quite fit to face global challenges

By Hilary Jeune, Oxfam’s EU policy adviser

The money for development aid and humanitarian assistance under the new 2014-2020 EU budget falls short of what is needed to help the EU respond to today’s pressing global challenges including runaway climate change, food insecurity, resource constraints and growing inequality between rich and poor.
With one in eight people going hungry globally, it is unfair to balance the books on the backs of the world’s poor that are being worst hit by an economic crisis they did not cause. There are smarter options to find the way out of the current crisis, like tackling tax dodging and introducing a financial transaction tax which could mobilize huge amounts of money.
Disappointingly, the new 7-year budget undermines the European Commission’s aim to reach the commitment by the EU as a whole to spend 0.7% of national income as overseas aid. Estimates by the Commission show that while EU institutions’ aid used to account for 20% of all EU aid, this share will now decrease to 12% – meaning EU member states will need to provide the bulk of commitments.The new budget also hampers plans for external action, including funds to keep the European External Action Service up and running.
We welcome that climate change is making it into the foray of European policy with 20% of the entire European budget aimed at climate-related projects and policies. Mainstreaming climate change into development aid is crucial to help build climate proof development assistance. However, the agreed overall spending on poor countries should have been higher to allow the EU meet its commitments to scale up public finance to help these countries adapt to climate impacts and curb emissions. Otherwise money for schools, hospitals and roads risk being diverted to programs that deal with climate change. European governments will now have to step up to make up the difference and redouble efforts to mobilize new sources of climate finance such as a tax on financial transactions and the EU’s Emissions Trading Scheme (ETS).
Moving forward, the EU Institutions should work to mitigate the worst impacts of the budget. For example, Policy Coherence for Development (PCD) should be implemented throughout this new long-term budget, in line with the Lisbon Treaty. If the EU is committed to ending global hunger, for example, they should back policies which help alleviate this in sectors outside of development. For example, the EU should rule out support for biofuels competing with food for crops, water and land as they are pushing up global food prices and driving people off their land.
It is now up to the EU institutions to ensure that the new budget is utilized the best it can, ensuring the best deal possible for those in the developing world.

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