7 EU cooperation with Egypt in the field
of Governance
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| European Court of Auditors Special Report No. 4 2013 on EU Cooperation with Egypt in the Field of Governance
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| Legal base | Article 287(4) TFEU; —
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| Department | Foreign and Commonwealth Office
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| Basis of consideration | Minister's letter of 19 November 2013
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| Previous Committee Report | HC 83-xvi (2013-14), chapter 8 (9 October 2103)
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| Discussion in Council | To be determined
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested. Relevant to the debates in European Committee on the EU approach to the Syria crisis and its aftermath and future EU support for "good governance" in the Democratic Republic of Congo.
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Background
7.1 Under Article 287(4) TFEU, the European Court
of Auditors (ECA), via its Special Reports, carries out audits
designed to assess how well EU funds have been managed so as to
ensure economy, efficiency and effectiveness.[12]
European Court of Auditors Special Report No.4
2013
7.2 Both before and after the 2011 Uprising, Egypt
was one of the main beneficiaries of assistance from the European
Neighbourhood and Partnership Instrument (ENPI), which the EU
uses to support its European Neighbourhood Policy (ENP). For
2007-13, Egypt received an allocation of approximately €1
billion. Approximately 60% is channelled through Sector Budget
Support (SBS) to the Egyptian government, the rest through projects
agreed with the Egyptian authorities. The EU has also made much
smaller amounts available directly to Civil Society Organisations
(CSOs), notably through the European Instrument for Democracy
and Human Rights (EIDHR). The basic framework is the EU-Egypt
ENP Action Plan.
7.3 This ECA audit covered the period up to September
2012. It focused on two key areas: Human Rights and Democracy,
and Public Finance Management (PFM) and the fight against corruption.
It also examined how the EU managed the wider ENP cooperation
framework with Egypt to achieve progress in these areas. The
audit examined 25 projects and the three main SBS programmes.
It found that, overall, the Commission and the EEAS had not been
able to manage EU support to improve governance in Egypt effectively
— in part due to the difficult conditions they faced but
also due to various shortcomings in the way they managed the process
and the various programmes. The background to and findings of
the audit, with Government views, are set out in our Report agreed
on 9 October.
7.4 In reporting this to the House on 9 October,
the Committee noted that, as was all too clear, the ENP Action
Plan is central to the EU-Egypt relationship. The Committee reiterated
its rejection of the Minister's position — that, because
this is all about politics and not about legal instruments, this
process should be handled by the FAC alone, and promulgated via
Council Conclusions — as tantamount to making a nonsense
of the notion of proper prior parliamentary scrutiny of CFSP,
and a retrograde step from the status quo ante the Lisbon
Treaty, when all such Action Plans were adopted via a Council
Decision.
7.5 As to this ECA report, it illustrated the classic
difference between the perspective of the auditor — whose
job is to find failings — and the practitioners, who bear
the scars of wrestling with a "partner" whose world
view is altogether different. This problem was likely to get
bigger, e.g., in post-crisis Syria, in almost any "failing
state" that threatens regional security, and in many other
parts of the EU's "near neighbourhood". The key question
was: were EU, and UK, interests served better by engaging, doing
the best possible — in this case, with €1 billion —
and recognising that the other partner's world view was likely
to be so dissonant that the "more for more" approach
was likely to be more honoured in the breach than in the observance?
7.6 We therefore considered this chapter of our Report
relevant to the debate that we had already recommended on the
Joint Commission/High Representative Communication on an EU comprehensive
approach to Syria.[13]
We returned the report under scrutiny, pending a further update
from the Minister about the European External Action Service (EEAS)
review and the EU's response to whatever further political developments
ensue in the interim. We also drew this chapter of our Report
to the attention of the Foreign Affairs Committee.[14]
The Minister's letter of 19 November 2013
7.7 The Minister for Europe (Mr David Lidington)
first addresses the challenges posed to the enhanced "more-for-more/less-for-less"
basis of EU assistance:
"Egypt is undergoing a difficult political transition.
As you know, the military removed the Muslim Brotherhood leader,
former President Morsi, on 3 July, after mass protests against
his government. The present situation is that an interim government
was appointed which set out a political roadmap to elections in
2014. A 50 person Constitutional Assembly has been formed to review
the constitution. We are watching the process carefully including
through by staying in close contact with its chair. We have urged
that the constitution should be inclusive and uphold human rights.
We have also outlined our concerns about levels of violence in
both public and private statements. For its long-term stability,
we believe Egypt needs an inclusive political process leading
to early and fair elections, which all parties are able to contest,
and for all sides to refrain from violence.
"I found your points about the different perspectives
of auditors and practitioners very interesting. I agree that they
have different perspectives and that those differences can stand
for a wider tension between the theoretical outline of a policy
and its implementation. That tension is inevitable — perhaps
more so in the diplomatic field than in other areas.
"This was why the Government recognised from
the beginning of the Arab Spring that the process of political
transition in the region would not be straightforward, and that
states would face many challenges along the way. But we also believed,
and continue to believe, that the EU needed to adapt its approach,
to increase its offer of support to the region, while tying that
support more closely to progress on reform. That was the approach
that we advocated during the ENP policy review of 2011 and that
was largely agreed.
"The Court of Auditors' report, which was focused
on EU support to Egypt before the 2011 ENP policy review, endorsed
the review's emphasis on promoting 'deep democracy', while calling
for more focus on women's and minorities' rights. It acknowledged
that neighbourhood partner states often have political cultures
and societal values very different from EU states', and that there
are difficulties in implementing 'more for more' in such contexts.
However, it concluded that an approach which was clear about the
EU's values, and its wish to incentivise states to protect human
rights and introduce democratic processes, was the right one to
pursue despite these challenges.
"We agree. The practical application of a policy
like 'more-for-more' is more complex that the initial policy design,
reflecting both the huge amount of change and uncertainty in the
region and the need to respond to the specific characteristics
of transition in each country. That means both that we need to
have clear principles that guide our policy, and that those will
need to be adapted to each country and situation that we face.
I do not see that as a fundamental challenge to the policy, but
as the reality of the world. Nor does it suggest to me that we
should reassess our support for 'more-for-more' as a concept.
The alternative of providing funding without goals or an ability
to calibrate response depending on progress is not acceptable
— it is the very situation so strongly critiqued by the
Court of Auditors' response."
7.8 The Minister then turns to the review of EU assistance
to Egypt:
"The Foreign Affairs Council (FAC) agreed conclusions
on 21 August on Egypt and asked the Commission to review its assistance
accordingly. These were broadly in line with the UK's own bilateral
position: to continue providing financial assistance in the socio-economic
sector and to civil society, but to review security sector assistance.
Baroness Ashton signed off the Commission/EEAS's internal review
of financial assistance in September, and briefed the October
FAC on its outcome and her recent visit to Cairo. We have updated
parliament by Written Ministerial Statement on FAC outcomes in
the usual way and will subject any future depositable documents
issued to the usual scrutiny process.
7.9 With regard to the Committee's view on the proper
basis for adopting EU Action Plans, the Minister says:
"I have addressed your points about EU Action
Plans in my letter of 6 November on EU-Burma, China and Lebanon.
I reiterated that the UK position remains that Council Decisions
are not the appropriate mechanism for adopting ENP Action Plans,
which do not contain any legally binding obligations. On the Lebanon
and Morocco Action Plans, for example, we believe that the Council
is being asked to adopt EU positions that are essentially political
and therefore should properly be adopted by way of Council Conclusions
agreed by consensus. As set out in that letter, I will of course
update you on any significant developments in this ongoing debate."
Conclusion
7.10 We consider that this chapter of our Report
is relevant not only to the forthcoming debate on the EU approach
to the Syria crisis and its aftermath but also to the debate we
have recently recommended on future EU support for "good
governance" in the Democratic Republic of Congo.[15]
7.11 We do not regard the Minister's update on
the review of further EU assistance to Egypt as adequate. We
should like a proper summary of the Commission/EEAS internal review
of financial assistance signed off by Baroness Ashton in September
— including how it has incorporated the ECA's recommendations
— and of the briefing she provided the October FAC on its
outcome and of the recent visit to Cairo. We would like to receive
this further information within the next ten days.
7.12 We address the question of the proper scrutiny
of ENP Action Plans and similar EU documents in our inquiry into
the scrutiny of European business in the House.[16]
7.13 We are also drawing this chapter of our Report
to the attention of the Foreign Affairs Committee.
7.14 In the meantime, we shall retain the ECA
report under scrutiny.
12 See http://eca.europa.eu/portal/page/portal/eca_main_pages/home
for full details of the ECA's work. Back
13
See: (35105) 11482/13: HC 83-xiii (2013-14), chapter 2 (4 September
2013). This debate will take place in European Committee B on
2 December, Back
14
See headnote: HC 83-xvi (2013-14), chapter 8 (9 October 2103). Back
15
(35381) -: HC 83-xxi (2013-14) Chapter 3 (20 November 2013). Back
16
Scrutiny inquiry: Reforming the European Scrutiny System in
the House of Commons (HC 109-I). Back
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