Compromise on the EU budget will put millions of people on the line

The compromise that EU leaders are set to reach on the European Union's long term budget this week will put millions of people on the line, Oxfam warned today ahead of the European Council.

Oxfam estimates that the proposed €6.1 billion cuts to EU humanitarian and development aid could be enough to have lifted more than 4.6 million people in the poorest countries out of extreme poverty. The proposed cuts to emergency aid alone would mean the EU is turning a blind eye on the plight of 150 million people affected by disasters or conflicts.

Cuts target aid disproportionately

Oxfam is calling on EU leaders to protect EU aid from the hard bargaining over the next seven-year budget and reverse the proposed cuts that are disproportionately targeting aid, because proposed cuts to other sectors of the budget are marginal in comparison.

The call comes ahead of the meeting of EU Heads of States and Governments on the 7-8 February in Brussels where leaders are expected to strike a deal on a budget of ‘moderation’. Oxfam fears they will use development and humanitarian aid as a bargaining chip to protect other parts of the budget, for their own national interests.

“The proposed downsizing of the EU’s aid budget actually means a frozen budget at current levels, if not a real terms cut. This is a strange signal for the EU to send in its first budget under the Lisbon treaty. At a time when our growing global interdependence is increasingly obvious and additional political and financial commitments are required to promote a sustainable and equitable future for all, this is a breach of faith,” said Natalia Alonso, Head of Oxfam’s EU Office.

Negotiations behind closed doors

“It is grossly unfair to balance the books on the backs of the world’s poor who are being worst hit by financial and economic crises they did not cause. EU leaders should look for smarter options to find their way out of the current crisis, like tackling tax havens.

“When they negotiate behind closed doors this week, EU leaders should think about the human faces behind the budgets they intend to slash. EU aid is not only a sound investment in our common future but also an act of solidarity that delivers lifesaving aid and lifts millions of people out of poverty around the globe. And all this costs less than a weekly cup of coffee for each European citizen.”

Notes to editors

  • At the previous Summit on the EU budget on 22-23 November 2012, President Van Rompuy tabled a proposal for the EU budget which cut development aid by €6.1 billion (including €3.3 billion to the European Development Fund + €2.8 billion to the development Cooperation instrument, given that the 13.3% proposed cut to the heading 4 ‘Global Europe’ is applied evenly) and humanitarian aid by €1.3 billion (humanitarian aid in the heading 4 and the Emergency Aid Reserve) – that is a total cut to EU aid by €7.4 billion compared to the European Commission.
  • In this proposal, the overall proposed cut to the EU budget is 7% (even less for the Common Agriculture Policy) and the overall proposed cut to the EU aid budget is above 12% according to Oxfam calculations.
  • According to ONE's analysis of an IFPRI report ('Investing in African Agriculture to Halve Poverty by 2015') investing $1363 (2000 $ Int'l), equivalent to €1315 (2011 prices), in African agriculture would lift one person out of poverty for one year. Therefore an investment of €6.1 billion could be expected to lift about 4.6 million people out of poverty for one year.
  • In the last five years an average of €1 billion in humanitarian aid has been provided annually by the European Commission helping nearly 150 million of the world’s most vulnerable people. Therefore an investment of €1.3 billion could be expected to provide emergency assistance to more than 150 million people for one year.
  • More than 21 per cent of the Europe’s overseas development aid (ODA) is going through the European Commission.
  • Around one trillion euros is lost to tax evasion and avoidance every year in the EU, according to the European Commission. The estimate for annual global illicit financial flows between 2001 and 2010 is between $1,011 and $1,083 billion.
  • All policies areas in the EU long term budget are being cut and the media has reported that a compromise may well be found with up to €25-30 billion more cuts compared to the proposal made by the President of the Council at the Summit last November. ‘Friends of cohesion’, ‘Friends of the Common Agriculture Policy’ among others consider these two big areas of the EU budget as off limits for further cuts which implies that other parts of the budget, including EU aid will bear the brunt of the squeeze.

Contact information

Gaelle Bausson, +32 473 562 260 or gaelle.bausson@oxfaminternational.org

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