THE FUTURE OF THE EC DEVELOPMENT BUDGET
The New Financial Perspective
18. The Commission has proposed a new Financial Perspective
for 2000-2006. This is set out in Table 5 below.
Table 5: Commission Proposals for Category 4 Financial
Perspective, 2000-2006
|
2000
|
2001 |
2002
|
2003 |
2004
|
2005 |
2006
|
Financial Perspective External Action (Category 4) Commitments (million ecu at current prices)
|
6,870 |
7,070
|
7,250 |
7,430
|
7,610 |
7,790
|
7,900 |
Increase on previous financial perspective ceiling (per cent)
|
0 |
2.9
|
2.5 |
2.5
|
2.4 |
2.3
|
1.4 |
Of which pre-accession aid (million ecu at current prices)
|
1,560 |
1,560
|
1,560 |
1,560
|
1,560 |
1,560
|
1,560 |
Category 4 as proportion of total EC budget (per cent)
|
6.8 |
6.8
|
7.0 |
7.1
|
7.3 |
7.4
|
7.5 |
Source: Agenda 2000 Communication from the Commission
on the Establishment of a new Financial Perspective for the Period
2000-2006, p.23
The average annual rate of growth in the Category
4 budget proposed for the next seven years (two per cent) is considerably
below the rate for 1993-99 (nine percent). However, this increase
in Category 4 would still result in a greater proportion of the
overall EC budget being allocated to external action.
19. As was stated above, the Financial Perspective
allocates funds to the main Categories of Community expenditure
but does not specify how the money should be spent within those
Categories. Such allocation will be worked out through negotiations
on the financial envelopes for the various multi-annual aid programmes
and through decisions on the annual budgets, in the light of the
Agenda 2000 priorities for external action. We discuss below the
allocation of resources within Category 4 to the various aid programmes.
We must state here, however, that we do not consider it acceptable
for the Community to decide on the total amount to be spent on
'external action' for the next seven years without any commitment
as to how much will go to the poorest countries.
20. There has on this occasion been one exception
to the Commission's practice of not specifying expenditure within
each Category. For the first time, the Commission has included
in its proposed Financial Perspective a separate heading for pre-accession
expenditure. For each of the years covered by the Financial Perspective,
the Commission proposes that within the Category 4 budget 1,560
million ecu be allocated to pre-accession aid through the Phare
programme. Separate headings for pre-accession expenditure have
also been proposed within Category 2, Structural Operations (1,040
million ecu per year), and Category 1, Agriculture (520 million
ecu per year).
21. Clare Short argued that at the time that the
new Financial Perspective is agreed there should also be a settlement
based on an agreed proportion of the external budget going to
the poorest countries.[55]
This was more important than any regional allocation.[56]
It would constrain future decisions on how the Category 4 budget
is allocated.[57] Such
an approach was also supported by the NGOs, who suggested to the
Committee that "the UK should work for a guaranteed minimum
percentage of External Action resources for low income countries.
This should be 70 per cent, the proportion already attained by
a number of member states in their bilateral aid; it should certainly
not be below 62 per cent, the existing average of member state
aid."[58]
22. If for the first time in a financial perspective
the Commission has earmarked a certain amount of the total for
a specific purpose, namely pre-accession aid, there is no reason
why this precedent cannot be followed so as to safeguard external
funds for what is surely the other priority to stand alongside,
if not above, pre-accession aid, namely assistance to the poorest
countries of the world. We recommend that the Financial Perspective
include for Category 4 a commitment to a proportion being spent
in low-income countries. The current average for member state
aid, 62 per cent, should be the minimum percentage acceptable.
23. We have been told in evidence that, in all likelihood,
a new category of expenditure — Category 7 — will
be established for pre-accession aid during negotiations on the
new Financial Perspective.[59]
NGOs have supported this proposal, "as all pre-accession
aid will by definition turn into structural funds, it might more
appropriately be located in that part of the budget, or in a separate
expenditure category, rather than Category 4."[60]
The creation of a new budget category exclusively for pre-accession
aid will no doubt clarify the resource allocation process. But
the establishment of a new Category 7 for pre-accession aid has
a significance beyond mere accounting. The inclusion of pre-accession
expenditure within Category 4 has arguably skewed the debate on
Category 4 priorities towards a concentration of the relative
merits of pre-accession versus development expenditure, when the
more important and relevant question which should be discussed
is the division of the remaining budget between the regions, in
particular between the Mediterranean and Middle East on the one
hand, and Asia on the other.
24. We support the creation of a new category
of expenditure exclusively dedicated to pre-accession aid. The
creation of such a category will provide an ideal opportunity
for a reconsideration of the Agenda 2000 priorities for external
action. It is clearly nonsensical to retain a single group of
priorities for activity which is now to be separated between two
budgetary Categories. In the new list of priorities for Category
4 we recommend the inclusion as a first priority of "Poverty-focussed
Assistance to Least Developed and other Low Income Countries".
25. The removal of pre-accession aid from Category
4 should also result in a reconsideration of the title and purpose
of Category 4 funds. Clive Robinson pointed out, "It is clear
within the EC budget that the label on Category 4 is not development
cooperation, it is external action. What we are seeing is that
different member states, different interests within the Commission,
interpret external action in different ways".[61]
We have called this inquiry 'The Future of the EC Development
Budget', but strictly speaking there is no development budget,
merely one for external action, and thus one vulnerable to the
claims of shorter term political expediency. The creation of
Category 7 is a chance to re-title Category 4 "Development
Cooperation" and we recommend accordingly. This would
be more than just semantics. It would itself be a clear statement
of future purpose and provide admirable focus to budgetary and
policy decisions. In short, the Community must, for the first
time, create a 'development budget' and thus give substance to
its many excellent policy statements on poverty and development.
55 Q214 Back
56
Q216 Back
57
Q233 Back
58 Evidence,
p.49, see also Evidence from the Summer Institute of Linguistics
p.85 Back
59 Evidence
p.2 Back
60 Evidence,
p.48 Back
61 Q166 Back
|
