Policy Coherence for Development (PCD) which carriedmore than 70 recommendations. The resolutionnoted that:5• the so-called “Singapore issues,” such asliberalization of services, investment and governmentprocurement, new rules of competitionand stronger enforcement of intellectualproperty rights, do not assist in achieving theeight MDGs.• EU export subsidies for European agriculturalproducts have a disastrous effect on food securityand the development of a viable agriculturalsector in developing countries.• EU financial contributions within the frameworkof Fisheries Partnership Agreements (FPAs)have not helped to consolidate the fisheriespolicies of partner countries, largely due to alack of monitoring of the implementation ofthese agreements, the slow payment of assistance,and sometimes even the failure to usethis assistance.• As a major arms exporter, the EU exports or facilitatesthe shipment of arms to the same countrieswhere millions are spent on developmentassistance; the EU-15 spends approximatelyEUR 70 billion per year on development aid,while the value of the EU arms exports amountsto approximately EUR 360 billion annually.• “Global Europe: competing in the world,” whichoutlines EU trade strategy, shows that bilateraland regional free trade policy strategies fosterEU access to developing countries’ raw materialsmarkets, including agricultural commodities,by opening them to large EU companies atthe expense of small-scale farmers and start-upindustries.• Financial liberalization, including speculativeand volatile financial flows, over which developingcountries have little control, has generatedsignificant instability at international level withdisastrous impacts on developing countries’economies. 6The European Parliament concluded that there aremany more cases of incoherence that impact negativelyon the achievement of the MDGs, which theEuropean Commission should address.5 This refers to four working groups set up during the1996 World Trade Organization Ministerial Conference inSingapore.6 Parliamentary Committee on Development, <strong>Report</strong> on theEU Policy Coherence for Development and the ‘OfficialDevelopment Assistance plus’ concept: explanatorystatement, 2009, 17. Available from: .Financial crisis impact on poverty withinthe EUWhile the EU Treaty sets a clear legal framework forthe eradication of poverty inside and outside the EuropeanUnion; in reality, poverty has increased in Europeand in developing countries due to the financialcrisis. Eurostat statistics assert that the effects of thecrisis on the European labour market are far fromover. In fact, in 2009 unemployment increased byover 5 million people to around 21.4 million in the EU,much of it due to job losses in the past 12 months. 7According to the EU, about 80 million or 16% of thepopulation are currently living in poverty. 8The subprime mortgage crisis, with its majoradverse consequences for banks, financial marketsand the real economy around the globe, sheds lighton the inefficiencies of EU regulation and capacity totake appropriate actions to protect from speculationagainst the Euro. Following the early crisis effect inEurope and the financial collapse in Greece, the EUhas strengthened its common approach to bring Europeannational budgets under tighter control. Futuresanctions are threatened against European governmentswith regard to managing their economies, anda willingness to tighten up the bloc’s Stability andGrowth pact – which sets limits for member statespublic deficits and debt – has been clearly stressedby European leaders.However, besides reinforcing controls on nationalbudgets, setting up a “preventative surveillance”system, there is no EU plan on how to shieldpoor citizens in the EU from the consequences ofausterity measures, nor any EU policy on protectingsocial sectors in Europe. As underlined by LàzloAndor, the European commissioner for employmentand social affairs, “we should all see that we are stillin a phase of fragile recovery.” Andor emphasizedthat until he sees “robust growth in all memberstates,” he will be more concerned “that prematureausterity can undermine both economic recoveryand the growth of jobs.” 9Certainly, new forms of institutions are emergingwhich are not foreseen in the Treaty of Lisbon. Asa good example, Herman Van Rompuy, the Presidentof the European Council is chairing a task Force onEuropean economic issues, a group consisting ofministers of finance of almost all the 27 MemberStates, and representatives from the EU institutions(such as Jean Claude Trichet, the President of the EuropeanCentral Bank). While this group is working on7 Remko HIJMAN, « Population and social conditions, »Eurostat Statistics in Focus, 79/2009, 1. Available from:.8 Committee of the Regions, Local and regional responses topoverty and social exclusion, June <strong>2010</strong>.9 European Voice, “Andor warns of hasty austerity measures,”24 June <strong>2010</strong>, 2.fiscal sustainability and greater budgetary discipline,one of its first priorities is “the need to strengthen ourfiscal rulebook: the Stability and Growth Pact,” asVan Rompuy stated. 10 The institutional framework ismoving, then, toward austerity policies.There is concern that a rejection of a neo-Keynesianapproach, to set up countercyclical measuresagainst recession will lead to increased poverty inEuropean countries, deepening the economic recessionin Europe. In a recent address to investors, VanRompuy emphasized the strength of the EU in itscombination of a strong economy and well-developedsocial support system, including a highly educatedpopulation, as well as “Europe’s attractivenessto investors and entrepreneurs... In fact, it is thisdouble attractiveness which makes our continentunique. Europe’s message to the world is that onecan have both. Economic growth and social justice.Efficient political decisions and democratic accountability.Adaptation to the times and a preservation ofone’s heritage. A good place to invest and to live.”The EU president has also indicated that cutsin education, climate and social inclusion would notbe acceptable: “We will stick to five main targets, allquantifiable. Research & development & innovation,education, employment, climate and social inclusion.(…) We have to preserve that type of expenditure (forinstance on education) and tax deduction in a periodof budgetary cuts. This is not a soft option.” 11Repercussions outside the EUIn a time of economic crisis, developing countriesneed EU support more than ever. Partnerships shouldclearly be shouldered by the European Commissionand the EU member states. From a developing countryperspective, economic austerity responses to thecrisis in European member states will undoubtedlyhave strong negative impacts on their still strugglingeconomies. As the World Bank stated, “the recessionhas cut sharply into the revenues of governments inpoor countries. Unless donors step in to fill the gap,authorities in these countries may be forced to cutback on social and humanitarian assistance preciselywhen it is most required.” 12European resources for development cooperationhave continued to increase from USD 11.2 billion10 Keynote speech by Herman Van Rompuy, President of theEuropean Council, at the World Investment Conference <strong>2010</strong>,“Europe’s Attractiveness in a Changing World,” La Baule,France, 2 June <strong>2010</strong>, 3. Available from: .11 Ibid.12 World Bank, Global Economic Prospects <strong>2010</strong>: Crisis,Finance, and Growth, Washington, DC, <strong>2010</strong>. Available from:.Thematic reports 34 <strong>Social</strong> <strong>Watch</strong>
in 2005 to USD 15.4 billion in 2009. 13 However, socialsectors in developing countries, particularly in Sub-Saharan Africa have been significantly reduced. TheEuropean Court of Auditors in its 2009 report concludedthat in “Sub-Saharan Africa, the health MDGswere most off track.” 14 According to a recent article,“the Development Assistance for Health (DAH) togovernment had a negative and significant effect ondomestic government spending on health such thatfor every USD 1 of DAH to government, governmenthealth expenditures from domestic resources werereduced by USD 0.43 to USD 1.14.” 15 It appears thatsocial sector support through General Budget Supportdoes not automatically increase expenditure inthose sectors.On an overview of European commitments,basic health and education allocations have consistentlydecreased since 2005; as stated by Alliance2015, “this has resulted in a total of only 5.7% of allaid managed by the European Commission being allocatedto basic health and education in 2008, whichis a decrease from 11% in 2005.” 16 Allocations tobasic health and education in Sub-Saharan Africahave dropped from 8% of total aid allocation in 2005to 1.5% in 2008. 17 Figures show that the percentageof allocations to food decreased from 4% of totalfunding in 2005 to 1.5% in 2008, basic health from4.7% (2005) to 1.3% (2008) and basic educationfrom 2.7% (2005) to 1.1% (2008). 18 For achievingthe MDGs in time, “the EC would have to increasefunding from EUR 605 million to EUR 971 millionannually for education and from EUR 460 million toEUR 1.5 billion for health to help close the financinggaps,” according to Alliance 2015. 19The budget target of 20% of total aid for basichealth and education for Asia and Latin America wasreached in 2009. However, as noted, the concern isthat the spending target for Africa is clearly plummeting.Applying the fundamental principle of nondiscriminationenshrined in the Treaty of Lisbon, theEuropean community must apply the 20% target toall other regions.Policy for Coherence in Development sets asa central objective the need for the European Unionto apply its standard of balancing the economic andthe social as a measure of progress internally andexternally. The European Commission and the EEASshould lead by example, especially as they will be increasinglyrepresenting the whole of the EU abroad.The drastic decrease of the European Commissioncontribution to education and health in developingcountries is unacceptable and must be redressed. n13 Mirjam Van Reisen, ed., The EU’s Contribution to theMillennium Development Goals: Keeping the goals alive(Prague: Alliance 2015, <strong>2010</strong>).14 European Public Health Alliance, “European Court of Auditorsslams EC development health financing,” Available from:.15 Lu, C. et al., “Public financing of health in developingcountries: A cross-national systemic analysis,” The Lancet, 9April <strong>2010</strong>.16 Alliance 2015, op cit., 21, table 2.1.17 Ibid., table 2.2.18 “Alliance 2015 calls on the EU to agree to binding aid targetsto reach MDGs,” 2 June <strong>2010</strong>. Available from: .19 Ibid.<strong>Social</strong> <strong>Watch</strong>35The Treaty of Lisbon and the new perspectives for EU development policy
Change language