The European Union

A Potential Global Force for Change

Summary

The EU has reached a turning point in the way it relates to the rest of the world.
Changes in the global political and economic landscape following the cold war, along
with widespread criticism of the wasteful and inefficient use of aid, has forced the EU to
take a closer look at its external relations. As a different world takes shape at the start
of a new century, the EU has to decide what role it should play in that world.

The European Union has considerable potential to be a meaningful force for positive
global change. Yet its potential is yet to be realised, and current initiatives to shake up
the EUs role in development and poverty eradication fall short of what is required.
Below Eurostep sets out a four-point agenda for political and institutional reform that the
EU should follow if it is to realise its potential as a leading global player in tackling the
challenges of the 21st Century.

1. A Clear and Transparent Approach in External Policy and

Practice
The political objectives of the EU's external policies need to be clarified. To do this, the
EU should produce:

An EU vision for external policy - which sets out the EU's aims for external
relations for the 21st Century. It should include an unequivocal commitment to
poverty eradication being the principal aim of this co-operation.

A comprehensive EU external policy framework - which puts development

policy on an equal footing with trade and foreign policy.

A strategy addressing the EU's contribution to achieving international

targets which should include agreement on the roles and responsibilities of the
EU governments, the Commission and the Parliament.

2. A Co-ordinated EU Approach

The EU should work to use its combined strength towards:

Co-ordinated policy-making in global institutions whereby the EU should

adopt a strong and emphatic single approach to development at a policy-making
level. EU governments should co-ordinate their actions and convey a common

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The European Union A Potential Global Force for Change Summary

message, which promotes pro-poor policies in the IMF, the World Bank, the
WTO, and the UN.

EU programme level co-ordination whereby the EU should develop a clear

strategy around the EU's co-operation with developing countries both politically,
and in its aid programmes towards those countries.

3. Creating Space for Development

It is vital that capacity to achieve EU development co-operation objectives are both

retained and strengthened within the Commission and other institutions. To do this,
there needs to be:

A focus on policy coherence which includes a workable strategy to promote

policy coherence within the Commission.

A single Directorate for development which should be strengthened and be

primarily responsible for the EU's relations with all developing countries.

4. Promoting national ownership

The Commission development policy statement puts national ownership and

partnership between the EU and developing countries at the core of its development
programme. The EU needs to promote national ownership and partnership through:

National anti-poverty plans by supporting governments in the development

of their poverty reduction strategies and plans - within the Bretton Woods PRSP
process - so that national ownership is reinforced, and by shifting towards
sector-wide approaches by supporting national sectoral budgets in recipient
countries.

Strengthening the voice of developing countries in global institutions - by

pressing for the democratisation of multilateral institutions and for increased
transparency and accountability.

Creating an enabling environment for civil society - by developing strategies

to promote vibrant and strong civil societies in recipient countries, and
collaborating with civil society sectors, including NGOs and the private sector, in
all areas of external co-operation to realise development objectives.

September 2000

Eurostep position paper September 2000 2

 The European Union
A Potential Global Force for Change

The EU has reached a turning point in the way it relates to the rest of the
world. Changes in the global political and economic landscape following
the cold war, along with widespread criticism of the wasteful and
inefficient use of aid, has forced the EU to take a closer look at its external
relations. As a different world takes shape at the start of a new century,
the EU has to decide what role it should play in that world.

This paper argues that the EU has the potential to be a global force for
change. It highlights many of the global challenges that we face, and
identifies the considerable strengths the EU could use in positively
influencing those challenges. Eurostep believes that the EU has not
performed to its potential, and is unlikely do so under the proposed plans
for change. Eurostep is therefore proposing its own plan to transform the
EU into a global force for change that benefits all, and is not solely based
on its own self interests.

September 2000

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The European Union A Potential Global Force for Change

Global challenges of the 21st Century

We start the 21st Century faced by a number of huge Global inequality,
global challenges. If current trends continue we will instability, and poverty
have a world divided by rising inequality, with the headline figures
poorest regions falling further behind. Our children
will face a world of environmental degradation, Around 1.2 billion people live today
growing insecurity and uncontrolled international on less than a dollar a day and that
crime. Vast swathes of humanity will be excluded number is increasing in Africa, South
from the wealth created by a global economy. Asia and Latin America. This total
has changed little since 1987.
The interdependent nature of global relations Over 125 million children, two thirds
requires that challenges facing governments and of them girls are out of school, and
people globally must be seen as challenges for almost 880 million adults are illiterate
everyone. Global economic integration poses the and the number is growing.
greatest development challenge of the 21st Century. 40 million children and adults are
Globalisation has potential in promoting global living with HIV/AIDS, and AIDS is
prosperity and understanding, but so far the benefits now the major cause of death in sub-
of globalisation have been disproportionately Saharan Africa.
captured by rich countries and powerful Currently, more than 1 in every 280
transnational companies, while poor countries and people on earth is either a refugee,
people living in poverty have been left behind. It has returnee or displaced person.
led to rising inequality, rising economic and social
exclusion, and a widening knowledge gap. Such
It is estimated that 335 million people
5 per cent of the worlds population
disparities increase global instability. lost their homes in 1998 as a result
of climate-related disasters.
Reforms are needed across a wide range of policy
and institutional areas. More fundamentally, global The 48 poorest countries have seen
their share of world exports decline
markets need to be underpinned by global rules and by almost half over the past two
institutions that place human development and the decades.
public good above the pursuit of corporate self-
interest and national advantage. The EU is a At the end of the 1990s, the richest
fifth of the worlds population
powerful economic and political force that could take
accounted for:
a lead in influencing the direction of globalisation in
ways that meet the challenges of the 21st Century.
The EU itself has led the world in demonstrating that f 86 per cent of GDP (compared to 1
regional integration can promote a relatively per cent for the poorest)
equitable distribution of prosperity and regional f 80 per cent of exports (compared to
stability. Regional integration is perhaps the most less than 1 per cent for the poorest)
powerful way for countries to retain the power to f 70 per cent of foreign investment
shape and control the forces of globalisation. (compared to 0.8 per cent for the
Eurostep believes the EU could do more to promote poorest).
and share the benefits of its own experience.

Eurostep position paper September 2000 2

The European Union A Potential Global Force for Change

Performance against potential

The EU could be a formidable global force for positive change. With its global presence, and
global influence, it has a unique standing in the world. Yet self-interest and the pursuit of short-
term goals have dominated the EU's policy and practice and ensured that Europe and other rich
regions have reaped disproportionate economic, financial and political benefits within our global
village. The European Commission and EU Member States have all recognised in principle the
imperative of tackling the global challenge of reducing and eliminating poverty, as shown
through commitments made to internationally agreed development goals. However there is a
continued promotion of a policy framework that in effect reinforces inequality, increases
poverty, and creates instability. The EU is committed to promoting the interests of developing
countries through a range of laudable objectives enshrined in the Amsterdam Treaty, yet
hitherto the EU has not demonstrated the political will needed to achieve these objectives.

EU governments and the global institutions

EU governments are powerful stakeholders in the G8, the WTO, the IMF, the World Bank, and
the UN. The G8 countries, along with the rest of the EU, account for 57 per cent of the votes on
the IMFs Board. Yet IMF and World Bank stabilisation and market reform programmes
continue to be designed primarily to encourage growth with few complementary policy
measures to facilitate more equitable income distribution. Half-hearted measures to relieve the
worlds poorest countries of their unsustainable debt burden are failing to have their desired
impact. Eurostep believes that the EU, through its Member States' governments, has a clear
role and responsibility in urging the IMF and World Bank to immediately prioritise poverty
reduction and equitable growth in their macro and structural reform programmes. Reforming the
governing structures of these global institutions themselves is an integral part of this so that
there is more equal involvement from countries in all parts of the world.

Trade policy
Europe is the single biggest market for imports from developing countries, and it exports more
than twice the amount to developing countries than the United States, Japan and Canada put
together i . Despite the EUs continued albeit flagging - defence of US attacks against its
banana import regime, EU trade policy has consistently put self-interest ahead of efforts that
promote sustainable development. The self-serving Common Agricultural Policy ii and Common
Fisheries Policy iii , foot-dragging on the phase out of the Multi-Fibre Agreement iv , and
dismantling of non-reciprocal preferential trade arrangements with the ACP in favour of free
trade based regional agreements with Europe v , all serve to illustrate this point. Eurostep
believes that the EU needs to urgently reform these policies and practices so that they work to
achieve development co-operation objectives.

Foreign policy
EU foreign policy is failing to address the global challenges of reducing poverty and insecurity.
The EU places excessive emphasis on perceived threats from the near abroad to a fortress
Europe. While this emphasis is inevitable, it is carried to a disproportionate extreme, and has
been at the expense of the EU developing a global foreign policy vi . Other objectives have been
undermined by the failure to direct foreign and security policy towards the root causes and
prevention of conflicts. The result is a continuing lack of coherence between political,
development and humanitarian objectives. Since the Commission is responsible for the
resources and instruments necessary to implement EU foreign policy, CFSP priorities have
been a powerful determinant of the direction of the European Commissions external policy.

Aid spending

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The European Union A Potential Global Force for Change

The EU provides 60 per cent of global aid, taking together the Commission managed
multilateral programme and Member States own bilateral programmes. Through the
Commission, the European Community (EC) is the second largest multilateral donor, spending
Euro 6.8 billion per year in aid. It is also the largest donor of humanitarian aid in the world.
However, EC aid has become increasingly skewed towards regions and countries of political
and economic self-interest to EU Member States, rather than the poorer and least developed
parts of the world. This shift in spending priorities is shown by the fact that in 1987, the top four
recipients of EU aid were Ethiopia, India, Sudan and Senegal. By 1997, the top recipients were
Morocco, Egypt, the Balkans, and Tunisia vii . Despite the Treaty commitment to pay particular
attention to the world's poorest countries, the share of aid going to LDCs fell from 75 per cent in
1987 to 51 per cent in 1997 viii . The ECs humanitarian aid spending also reflects a similar
pattern. In 1999, four times as much EC humanitarian aid went to Kosovo and the continuing
consequences of the earlier conflict in former Yugoslavia than to Africa ix .

Aid quality
The ECs multilateral aid programme is widely criticised for its ineffectiveness and inefficiency.
A recent Commission report lists nearly 2,000 redundant, half-finished or dormant aid projects x .
In 1998, the EC failed to spend 37 percent (Euro 980 million) of the total aid allocated from the
EU budget to fund regional co-operation agreements xi . These serious delays are a result of an
overly cautious bureaucratic culture within the Commission that has developed largely in
response to Member States looking to protect their own individual interests by involving
themselves in decision-making at all levels and closely scrutinising proposals. It is also a result
of insufficient human resources within the Commission to administer the programme. In the last
ten years the aid programme managed by the Commission has trebled as the Member States
have added whole new regions, in particular the Mediterranean basin, Central and Eastern
Europe, and countries of the former Soviet Union. Consequently the programme has been
geographically expanded to cover all regions of the world. Staff levels, however, have less than
doubled. Recent evaluations have emphasised the deficiencies that have resulted, and
numerous badly managed, inappropriate, and even dangerous EC-supported projects have
been identified by NGOs xii , academics, and the media. However, where there are skilled and
innovative staff, the EC has led some progressive poverty focused programmes, but these are
constrained by the lack of such capacity. The skills profile of staff in the Commission has been
identified as a particular weakness in the aid programme. DAC evaluations have identified a
particular shortage of expertise in the areas of participatory development, gender issues,
health, education, environment and the social sciences.

Incoherent policy priorities

Over time EU external policy has been developed in a piecemeal way and is therefore
confused, muddled and poorly co-ordinated. As EU governments identify new global
challenges, they create new policies to address them without modifying existing policy or
adapting mechanisms for delivery. To a great extent approaches to different regions are linked
to specific policies that derive from the EU's own specific interests towards that region.
Consequently, the EU has no clear and coherent strategy for poverty eradication, nor an explicit
external policy from which to build such a strategy. This has hampered the EUs ability to set a
coherent and co-ordinated external policy framework to encompass its full range of policy
instruments and resources. So while the EU incorporated development policy objectives in the
Maastricht changes to the Treaty, the willingness to pursue these has been lacking and ability
for them to be put into practice has been effectively eroded.

Plans for change

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The European Union A Potential Global Force for Change

The EU has embarked on two separate initiatives to 1) improve the clarity and focus of its
development policy, and 2) to improve the performance of EC aid. In March the Commission
adopted EC Development Policy guidelines, and EU Development ministers are expected to
adopt a statement on EU development policy in November. In April the Commission
announced plans to reform the management of its external assistance programme. Both are
described below. Both initiatives are welcome. They address many of the practical problems
that hinder the effectiveness and efficiency of the aid programme. However, they lack an
ambitious and explicit vision, and fail to recognise where existing political and commercial
policy is incoherent with objectives aimed at sustainable development and poverty eradication.
EU governments, the Commission, and the Parliament will have to make hard political choices
if the EU is to realise its role as a global force for positive change.

Commissions Communication on EC Commissions Communication

Development Policy on EC Development Policy

A Critique A Summary
The Commissions Development Policy
An integrated approach: Communication xiii will be presented to
The integrated approach adopted in the EU Development ministers at their next
Commissions Development Policy Communication Council meeting in November, and on
is welcome. So too is the way in which it identifies the basis of this the Council will adopt a
good and poor policy environments for poverty policy statement. The Commission's
reduction. However, it fails to adequately identify communication of intent is
the root causes of global economic and social comprehensive and emphasises the
inequality, or the way in which existing policy - centrality of promoting ownership of
development processes by developing
multilateral, European, regional or national -
countries themselves and partnership
contributes to increasing poverty and the abuse of between the EU and those countries. It
peoples basic rights globally. As a result, it fails to proposes to better integrate the
draw clear conclusions, or develop a link between economic, trade and political aspects of
the identified problems, and the consequent policy its development co-operation. In doing
change and actions to address them. so, it proposes to strengthen the links
between trade and development, and to
Promoting real ownership: place poverty reduction at the heart of all
Promoting ownership by developing countries of their aspects of development policy.
own development process is essential for any real Importantly, it seeks the highest possible
degree of coherence between
possibility of success. The increased emphasis on development policy and other policies
this by all donors is therefore welcome. However that impact on developing countries. The
real ownership should not just be seen as developing links between relief, rehabilitation and
countries defining their own national programmes development are to be increased. It aims
and being given a central role in co-ordinating inputs also to adopt an integrated development
from donors. It also requires an increased role in framework, which involves focusing on
shaping the environment in which that country exists, priority areas of support where the EC
and therefore a greater voice in the decisions that has a distinctive competence, using
are made in global institutions like the World Bank common sectoral policy guidelines. The
and IMF. emphasis on budgetary support and
sector programming will be increased,
and it proposes to ensure better co-
Policy coherence: ordination among EU governments
The attention given to greater policy coherence is bilateral programmes - and where
welcome - albeit overdue. The Statement re-states possible use the procedures of the
the Amsterdam Treatys commitment to take account beneficiary states. It aims to improve the
of the impact of policies that will positively or EUs presence and influence in
adversely affect developing countries. However, this international fora where development
is undermined by the caveat that it is possible for policy is discussed by ensuring better
coherence between EU policy positions
the EU to make make the political choice to go
towards developing countries taken in the
ahead with a policy despite its potentially negative, Bretton Woods institutions, the WTO, and
indirect and unintended impact on developing other norm and standard-setting

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The European Union A Potential Global Force for Change

countries. There are no clear benchmarks against agencies. Its proposals for
which to assess if a political or commercial priority implementation are echoed in the
is to override development considerations when proposals to reform the management of
there is a recognised conflict of interest. Under external assistance described below.
these circumstances it is almost inevitable that the
political and commercial priorities derived from the
EU's own self interest will dominate.

Poverty reduction/eradication:
Despite it being unclear as to whether poverty reduction or eradication is the central objective of
the EC Development Policy Communication, it is a welcome commitment. The commitment to
a poverty focus is however undermined by a series of escape clauses which bring into
question the political commitment to this objective. Within the Statement, the Commission
indicates that, improving the primary poverty focus is clearly limited by the setting of the
political priorities and the consequences for the distribution of the financial resources to the
regions. This illustrates a continued pursuit of incoherent policy objectives, and indicates an
ambivalent commitment to tackling poverty.

Sectoral approach to aid spending:

The emphasis on budgetary support and sector programming is welcome, as is the focus on
support to social sectors, like health, education and gender-sensitive programmes. Yet DG-
Developments Human and Social Development Unit consists currently of only 15 advisers. The
European Parliament, in a welcome move, is pressing for increased spending on social sectors.
However, it will be difficult to promote poverty focused programming without the requisite
capacity to enable it to do so.

Strategy:
While the Statement includes many welcome proposals, it lacks the necessary strategy to put
those proposals into practice. EU Development ministers have asked the Commission to draw
up an action plan to operationalise the Policy Statement, but an action plan is only one element
of a comprehensive strategy. Before an action plan can be defined, the context for the wider
political framework must be established, in which the aims and vision are clear and explicit.
Roles and responsibilities should be identified, and only then can an action plan, including
targets and a timetable, be drawn up.

External Assistance Reform Proposal Proposal to Reform the Management

of
EC External Assistance
A Critique
A Summary
Reform to achieve what?:
Many of the proposed changes could lead to a more The aims of the reform proposal xiv are to
efficient and less bureaucratic system to deliver aid. speed up the delivery of aid, to raise
standards, and increase the impact of
But since there is an absence of a strategy based
the ECs aid programme. The reform
on a clear and coherent external policy framework, package aims also to improve the
the reforms are likely to be ineffectual in improving management and accountability of the
the poverty focus of the external assistance overall programme. In doing so, the
programme. Many of the current problems are the package of proposals include matching
result of the Member States' continual safeguarding resources to core activities through
of self- interest. While this is perhaps Activity Based Budgeting (ABB) and
understandable within the structures of the EU, it Activity Based Management (ABM).
leads to an almost absolute domination of internal Decision-making will be devolved to staff
self-interest with little room for policies based on responsible for activities to cut through
other motives. time-consuming bureaucracy. There will
be a re-unification of the project-cycle,
and an interface between the staff
No reference to poverty: involved in programming and
The reform proposal does not mention the word implementation will be created. 80 per

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The European Union A Potential Global Force for Change

poverty at all, let alone the fact that it is one of the cent of the EUs external assistance
worlds greatest challenges. It does however state programmes are proposed to be
that, In external relations the key policy objective is managed by an external EU Aid Office -
to ensure a stable and enlarged Europe with a ending the current system whereby
projects are identified by Commission
stronger voice in the world. This gives an indication
Directorates but actually implemented by
of the EUs confused policy objectives, and also the Joint Service for External Relations
demonstrates how the priority placed on (SCR). The reform proposal suggests a
safeguarding a fortress Europe compares with shift away from sub-contracting Technical
tackling global concerns. Assistance Offices (TAOs) - costly private
firms - towards more decentralised
Improving coherence among Commissioners solutions managed by the EU Aid Office.
responsible for external policy: The reform plans to decentralise decision-
The reform recognises the need for mechanisms to making and administration to the EU
delegations to reinforce the authority and
improve coherence of approach and in programming
flexibility of operation. Commissioners with
among the four Commissioners and Departments portfolios covering external relations will
responsible for external policy. It proposes to have a strengthened role in checking for
strengthen the role and responsibility of policy coherence and consistency of policy
Commissioners, supported by a cross-divisional and standards. The Group of RELEX
Quality Support Group, to check for policy Commissioners is to be supported by a
coherence and consistency. However, a check-list cross-divisional Quality Support Group in
approach to coherence will not ensure that doing this.
development will not continue to take a back seat
when up against the political priorities driven by EU
governments under CFSP, or when it comes to
safeguarding the EUs heavily protectionist trade policy.

Illogical hybrid structure maintained:

The hybrid structure, which splits the division of labour between geographical and thematic
services, will be maintained. This means, for example, that Commissioner Nielson is
theoretically responsible for development efforts in Central America, but responsibility for
the ECs relationship with Central America will remain with Commissioner Patten. Similarly,
officials responsible for EC trade policy with developing countries remain in DG-Trade,
rather than being transferred to DG-Development. Such a structure erodes the overall
capacity and influence of DG-Development in matters affecting development. The reform
plan will actually transfer further functions from DG-Development. The Human and Social
Development Unit will for example, be reduced to almost half of its current number of
advisers, as staff are plucked out to be transferred to the new EU Aid Office. DG-
Development is becoming so weakened in capacity that some predict that even before the
end of the current term of this Commission, DG-Development will no longer exist. This
would inevitably lead to the end of a Commissioner for Development whose responsibilities
were separated from those dealing with political and trade policies. If that does happen,
there would be no distinct institutional capacity within the Commission to formulate
development policy or strategies for a development-orientated programme. Where would
that leave development? It would be inappropriate for DG-Developments functions to be
transferred to the proposed EU Aid Office, because the emphasis is on it being a technical
service. Transferring development policy to External Relations would almost certainly lead
to development co-operation becoming an instrument of external political priorities. Without
DG Development, the resulting lack of specific focus on development policies would be
compounded by the almost certain disappearance of both the Development Committee of
the European Parliament and Development Council as separate entities.

Skills profile of staff:

The reform proposals make no reference to the type of staff required, despite this being crucial
to the success of the proposed reforms. The reform plans to decentralise decision-making and
administration to the EU delegations will reinforce the authority and flexibility of operation, but
will only be beneficial if capacity within the delegations is strengthened with appropriate staff.
Without appropriate staffing, mere re-organisation will not be sufficient to resolve the existing

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The European Union A Potential Global Force for Change

problems. The delegations should not be staffed with more bureaucrats, but with people with
appropriate skills and expertise to execute EU development policy.

Project-based approach to aid delivery:

The suggested reforms demonstrate a serious intention to create an interface between the staff
involved in programming and implementation. Eighty per cent of the ECs external assistance
programmes will be managed by the proposed EU Aid Office - ending the current system where
projects are identified by Commission Directorates but implemented by the Service for External
Relations (SCR). The creation of an EU Aid Office has the potential to construct a more
effective approach to implementing EC aid. However, its ability to do so does not just depend
on the capacity and expertise within that office, but on the clarity of objectives and purpose of
that aid. The political and policy oversight would need to remain in Brussels to ensure
coherence and consistency with overall development policy. The proposal to re-integrate the
project cycle should allow for more efficient aid projects and programmes than under the
current structure. Contrary to the Development Policy Communication however, the reform
proposals place too heavy an emphasis on a project-based approach. The limitations of a
project-based approach are now widely acknowledged. There has been a shift away from
projects to programmes, and an increasing emphasis on policy dialogue, sector investment
programmes, and strategic partnerships between donors, recipient countries, and civil society.
Such programmes not only impose unrealistic demands in terms of local capacity and donor co-
ordination, but individual projects - even good ones - will produce limited benefits in a bad
sectoral policy environment.

Relations with NGOs and civil society organisations:

Under the reforms, the management of the financing of NGO and civil society activities will be
placed in the EU Aid Office. Managing relations with NGOs within the EU Aid Office
instrumentalises the role of NGOs, and ignores the role NGOs and civil society as equal and
independent partners in development, and denies them the role they have to play in policy
dialogue.

Eurostep position paper September 2000 8

The European Union A Potential Global Force for Change

Transforming the EU into a

force for global change
The European Union has considerable potential to be a meaningful force for positive global
change. Yet its potential is yet to be realised, and current initiatives to shake up the EUs role in
development and poverty eradication fall short of what is required. Eurostep sets out a four-
point agenda for political and institutional reform that the EU should follow if it is to realise its
potential as a leading global player in tackling the challenges of the 21st Century.

I. A Clear and transparent approach in external policy

and practice
The political objectives of the EU's external policies need to be clarified. The role of different
external policies and programmes need to be specified, and the relationships between different
external policies need to be defined. The EU should produce:

An EU vision for external policy

The EU should adopt a clear and comprehensive vision statement. This should take the form
of an inter-institutional agreement between the European Council, European Commission and
European Parliament and set out the EU's aims for external relations for the 21st Century. The
statement should include the specific rationale and objectives of its actions in the areas of
development policy, economic policy, trade and investment policy, and foreign policy. The
motivation, and orientation of external actions, as well as the specific policies on which external
actions are based should be made explicit. Poverty eradication should be an overarching
objective of this vision statement. This vision statement should be presented during the
Swedish Presidency. A first step however would be for EU Heads of State to endorse a
strengthened EU Development Policy Statement under the French Presidency. This would
emphasise the primacy of the EU's development objectives in its co-operation agreements and
actions with developing countries. It should include an unequivocal commitment to poverty
eradication being the principal aim of this co-operation.

A comprehensive EU external policy framework

A comprehensive EU external policy framework, which puts development policy on an equal
footing with trade and foreign policy, should also be adopted during the Swedish Presidency.
This policy framework should:

(a) Define the core objectives of the EU's external political policies as being to uphold
human rights and humanitarian law throughout the world, while strengthening the role of
the UN as the single most significant body to help prevent conflict and enhance respect
for basic rights around the world.
(b) Promote EU and international trade and trade-related policy that favours poverty
reduction;
(c) Support moves to develop multilaterally agreed guidelines for business as a
precondition to further liberalisation.
(d) For EU governments to provide 100 per cent debt cancellation where they have not
already done so, and for the EU to support accelerated debt relief for countries which
commit to allocating debt relief to a transparently managed poverty fund within the
longerterm Poverty Reduction Strategy Paper (PRSP) process.

A strategy addressing the EU's contribution to

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The European Union A Potential Global Force for Change

achieving international targets

A clear strategy should be adopted during the Swedish Presidency on the specific contribution
that the EU will make towards realising the international development targets, based on
commitments made within successive UN conferences. Roles and responsibilities should be
identified for EU governments, the Commission, and the Parliament, and an action plan,
including targets and a timetable should be drawn up. The objective and rationale behind aid
spending should be based on poverty focus and need. The EU should:

(a) Agree a national and multilateral spending plan for working towards an aid level target
of 0.7 percent of GNP by 2006.
(b) Work towards achieving a 70 percent poverty focus in EU official development
assistance by 2006.
(c) Increase the proportion of EC aid for basic education and primary health care.
(d) Agree to respond to humanitarian crises on the basis of need, not strategic interest, or
media coverage;

II. A co-ordinated EU approach

The strength of the EU lies in the sum of its parts, but only if these are working together
towards the same ends. In combination the EU is the principal global player both economically
and politically. This power not only provides opportunity but also bestows responsibility for it to
be used to the benefit of all humanity. To this end the EU should work to use its combined
strength towards:

Policy-making in global institutions

The EU should move towards having a strong and emphatic single approach to development at
a policy-making level. EU governments should co-ordinate their actions and convey a common
message, that promotes pro-poor policies in the IMF, the World Bank, and the UN, and provide
a counter-balance to US dominated policy-making in the global institutions. The EU should use
the leverage it has through speaking as a single voice within the WTO to promote international
trade and non-trade policy that promotes poverty reduction.

EU programme level co-ordination

The EU should develop a clear strategy around the EU's co-operation with developing countries
both politically and in its aid programmes towards those countries. This should be based on
defining a mutually agreed co-operation agreement between the EU and respective country.
Within this context EU governments and the EC should focus their respective aid programme
activities on their particular comparative advantages in a given field or in recipient countries.
This would have far greater impact than the sum of the parts and would be more efficient for
recipient governments.

III. Creating space for development

To overcome the domination of self-interest in EU policy-making on international development,
it is vital that capacity to effectively pursue strategies to achieve EU development co-operation
objectives are both retained and strengthened within the Commission and other institutions.
Moreover, statements on the importance of development policies and their equality with other
external objectives need to be supported by appropriate political, management, and
administrative structures within the EU institutions. Therefore there needs to be:

A focus on policy coherence

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The European Union A Potential Global Force for Change

A clear and workable strategy to promote policy coherence within the Commission should be
produced under the French Presidency, or Swedish Presidency at the latest. This should
include a commitment to strengthening the legal obligation for policy coherence within the
Amsterdam Treaty. Clear benchmarks against which to assess if a political or commercial
priority is to override development considerations when there is a recognised conflict of interest
should be established as a way of fulfilling this obligation. Both such initiatives would need to
be accompanied by a formal and rigorous procedure within the Commission, which would
require coherence impact assessments to be made in the formulation of new policies and
practices, as well as the production of a public annual report. Specific capacity within DG
Development - whose responsibility is to monitor policy coherence would be needed to
ensure carry this out.

A single Directorate for development

The Directorate for Development should be strengthened and be primarily responsible for the
EU's relations with all developing countries. The directorate should be responsible for
formulating and implementing all development policy, and the development aspects of trade
and foreign policy. The Development Directorate should be a voice among equals when the
Trade, External Relations, and Development Directorates formulate and implement policy. EU
governments and the European Parliament should allow the Commission the necessary levels
of staff in Brussels and in the Delegations to effectively and efficiently deliver the EUs external
assistance policy programme. The levels of staff required need to be assessed using the
Activity Based Budgeting approach proposed by the Commission, and should be based on an
overall strategy as described above. Staff with the appropriate skills to deliver a poverty-
focused programme should be recruited. More EC staff should have skills and expertise in
participatory development, gender-sensitive approaches to development, health and education
experts, and the social sciences. The Delegations should be equipped with skills and capacity
to effectively co-ordinate with national governments, civil society, and other donors. The EU
should also put more energy into learning from each others experience in development, and
sharing best practice.

IV. Promoting national ownership

The Commission development policy communication puts national ownership and partnership
between the EU and developing countries at the core of its development approach. The EU
needs to address how to better promote these concepts such that they not only cover the EU's
aid programme to those countries but also the overall role that they play within the global
community and its institutions.

National poverty plans

Aid has the greatest impact when national poverty reduction plans are really defined by national
governments and the society they represent. The EU has long supported government
ownership of national planning. The EU should provide strong support to governments in the
development of their poverty reduction strategies and plans - within the Bretton Woods PRSP
process - so that national ownership is reinforced. The EU should ensure that the IMF and
World Bank carry out proper ex-ante analysis of proposed reforms with respect to their positive
or negative impact on the poor. There should also be an EU-side shift towards sector-wide
approaches by supporting national sectoral budgets in recipient countries, which should enable
aid recipients to develop broad sectoral strategies with better co-ordinated aid. The strategy
should identify the ways in which EU donors could co-ordinate with recipient national
governments, the World Bank, the IMF, UN organisations, and other donors, as well as the
private sector and civil society organisations, including NGOs.

Enhance the voice of developing countries in

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The European Union A Potential Global Force for Change

global institutions
The EU should work in partnership with developing countries to reform global institutions and
international policies that hamper efforts towards sustainable development and poverty
reduction. To do this the EU should press for the democratisation of multilateral institutions and
for increased transparency and accountability. At present, sub-Saharan Africa accounts for only
2 per cent of the votes on the IMFs Board. The UN Security Council is particularly
undemocratic. The EU should press for reform of the Council that strengthens participation from
Africa, Latin America and Asia. The EU should provide substantial financial and technical
assistance to ensure that developing countries can participate on a more equal basis in the
day-to-day activities of the WTO, in standard-setting bodies and in future multilateral trade
negotiations.

Create an enabling environment for civil society

The EU should develop strategies to promote vibrant and strong civil societies in recipient
countries. It should seek to collaborate with civil society sectors, including NGOs and the
private sector, in all areas of external co-operation to realise development objectives. Civil
society organisations should be considered essential and independent partners of the EU that
play a significant role in the development process. The EU should encourage greater policy
dialogue with civil society, and greater collaboration at a programme level.

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The European Union A Potential Global Force for Change

Endnotes:

i
Eurostat, in The European Communitys Development Policy, Communication from the Commission to the
Council and the European Parliament, 26th April.2000.
ii
p.p 13-16 Loaded Against the Poor: World Trade Organisation, Oxfam GB Position Paper, November 1999.
iii
The Fight for Fish: Towards Fair Fisheries Agreements, Eurostep, May 1996.
iv
p.p. 11-13 Loaded Against the Poor: World Trade Organisation, Oxfam GB Position Paper, November 1999.
v
The New ACP-EU Agreement: An assessment and recommendations for implementation, Eurostep, May 2000.
vi
A Global Foreign Policy for Europe, Eurostep, May 1996.
vii
Inquiry on the Future of the EC Development Budget, Memorandum submitted by the Department for
International Development to the Select Committee on International Development, October 1998.
viii
Inquiry on the Future of the EC Development Budget, Memorandum submitted by the Department for
International Development to the Select Committee on International Development, October 1998.
ix
An end to forgotten emergencies? Oxfam GB, March 2000.
x
Stephen Castle, The Independent, 29th July 2000.
xi
EC Chapter, Reality of Aid 2000
xii
See A Profile of European Aid: Natural Forest Management and Conservation Project, Uganda, Oxfam GB,
April 1996, and A Profile of European Aid II, Northern Corridor Transport, Kenya, Oxfam GB/Kituo Cha Sheria,
September 1996.
xiii
The European Communitys Development Policy, Communication from the Commission to the Council and the
European Parliament, 26th April 2000.
xiv
Communication to the Commission on the Reform of the Management of External Assistance, 16th May 2000.
Described in Assessing Trends in EC Development Policy: An Independent Review of the European
Commissions External Aid Reform Process for the Department of International Development, May 2000

Further References:
The Effectiveness of EC Development Assistance: Memorandum to Inquiry, BOND (UK
Platform EC NGO Network), June 2000.
The Effectiveness of EC Development Assistance: Memorandum to the House of Commons
Select Committee for International Development, Simon Stocker, Director Eurostep, June
2000.
The Effectiveness of EC Development Assistance: Submission to the International
Development Select Committee, Glenys Kinnock MEP, June 2000.
Globalisation: Submission to the Governments White Paper on Globalisation, Oxfam GB,
May 2000.
EU Global Player: The North-South Policy of the European Union, Mirjam van Reisen,
International Books / Eurostep 1999.

Eurostep is a coalition of European NGDOs which is working to ensure that the policies and practices of the
European Union and national European governments promote people centred sustainable development in all parts of
the World. Eurostep has produced this paper as a contribution to the ongoing review of the European Community
development assistance and the integration of coherence in the EU policies. The perspectives set out in this paper
are drawn from the experiences gained in development by Eurosteps member organisations through their
involvement in development programmes in Africa, Asia and Latin America. It builds on positions and proposals that
have been put forward in previous positions and briefing papers published by Eurostep. This paper has been
developed by Oxfam GB.

The membership of Eurostep includes:

ActionAid, UK; ActionAid Ireland; CONCERN Worldwide, Ireland; Deutsche Welthungerhilfe, Germany; Forum Syd,
Sweden; Frres des hommes, France; Helinas, Greece; Hivos, Netherlands; Ibis, Denmark; Intermn, Spain; Kepa,
Finland; Mani Tese, Italy; Mellemfolkeligt Samvirke, Denmark; Movimondo, Italy; NCOS, Belgium; Norwegian
Peoples Aid, Norway; Novib, Netherlands; Oikos, Portugal; Oxfam GB; Swiss Coalition of Development
Organisations, Switzerland; Terre des hommes, France; terre des hommes, Germany.

Eurostep position paper September 2000 13