Addressing migration-related issues and humanitarian assistance remain top focus areas

The EU’s development strategy is outlined in the European Consensus on Development from 2017. Its overarching objectives are poverty reduction and alignment with the 2030 Agenda for Sustainable Development. The objectives have been translated into four frameworks for action:  

• ‘People – human development and dignity’, which includes education, nutrition, access to water, health, decent work, environment, and human rights;
• ‘Planet' – protecting the environment, managing natural resources, and tackling climate change’;
• ‘Prosperity – inclusive and sustainable growth and jobs’, which includes investment and trade, sustainable agriculture, and innovation;
• ‘Peace' – peaceful and inclusive societies, democracy, effective and accountable institutions, rule of law, and human rights for all, which includes humanitarian assistance.

The Consensus highlights the EU’s commitment to strengthening interlinkages between various sectors. It also highlights the EU’s goal of improving the effectiveness of its development policy through performance-based budget support, where tranches of budget support are only provided contingent on meeting certain performance metrics. The Consensus aligns with the EU’s 2012 Agenda for Change, which is aimed at improving the effectiveness of funding assistance by concentrating the EU’s country programs on a maximum of three sectors per country and by prioritizing the use of general budget support as an assistance modality tied to stricter conditions to encourage principles of good administrative and fiscal governance. Finally, the Consensus underlines the EU’s intention to combine traditional development assistance with other resources, including private-sector investments and domestic resource mobilization.  

Further strategic priorities are outlined in the Cotonou Agreement, which was signed in 2000. This Agreement governs relations between the EU and 79 African, Caribbean, and Pacific (ACP) countries, focusing on development cooperation, political dialogue, and trade. The Cotonou Agreement expired in February 2020. Negotiations for a new agreement between the EU and ACP states will likely be finalized in 2020. EU and ACP countries have already decided on strategic priorities and a new structure for the future agreement, which will include an umbrella agreement, defining common values and interests, as well as three distinct agreements focusing on each region’s specific needs (replacing the current single agreement with all ACP countries). The priorities proposed by the EU are:  

• Africa: Peace and stability, migration, democracy and good governance, economic development, human development, and climate change.
• Caribbean: Vulnerability to climate change, good governance and human rights, and human development.
• Pacific: Vulnerability to natural disasters and climate change, and maritime security.

Following the significant inflow of migrants and asylum seekers in 2015, the EU increased funding for migration-related issues. This included the establishment of the ‘Emergency Trust Fund for Africa’ (€4.7 billion or US$5.56 billion as of December 31, 2019), the ‘EU Facility for Refugees in Turkey’ (€6.0 billion or US$7.1 billion for 2016-2025, with €4.0 billion or US$4.7 disbursed by the end of 2020), and the ‘EU Regional Trust Fund in Response to the Syrian Crisis’ (€1.5 billion or US$1.8 billion as of November 2018, with a €25 million or US$30 million top-up in 2020). Humanitarian assistance is one of the top sectors of EU ODA, accounting for 9% of the European Union Institutions’ (EUI) bilateral spending in 2018. The European Commission (EC) has proposed doubling the budget for migration and border management from €13.0 billion (US$15.3 billion) in the current multiannual financial framework (MFF) 2014-2020 to €34.9 billion (US$41.1 billion) in the MFF 2021-2027. The July 2020 EU leaders deal reduced the allocation from the EC proposal to €25.7 billion (US$30.3 billion), still almost doubling the current migration and border management budget. 

The priorities for the next MFF 2021-2027 are currently being negotiated (see: ‘ODA trends’). The European Commission’s (EC) proposed ‘Neighborhood, Development, and International Cooperation Instrument’ (NDICI) includes four key components: 1) a large geographic component, 2) a thematic component, 3) a rapid response component, and 4) an additional “cushion” for emerging challenges and priorities.  

In July 2020, EU heads of state struck a deal on the next MFF, driven in response to the COVID-19 crisis. Under this deal, funding for the European Neighborhood geographic programs (a bilateral and regional cooperation program between the EU and sixteen southern and eastern neighboring partner countries) would receive €53.8 billion (US$63.5 billion) and, through this, Sub-Saharan Africa would receive €26.0 billion (US$30.7 billion). Thematic funding for issues such as human rights and democracy would receive €5.6 billion (US$6.6 billion), €2.8 billion (US$3.3 billion) would be channeled to rapid response actions, and €8.5 billion (US$10.0 billion) would be allocated for ‘emerging challenges and priorities and would be used to address crisis and post-crisis situations, migratory pressures, or other international initiatives or priorities. The German Council presidency then struck a compromise with the European Parliament (EP) that increased funding for EU flagship programs, including NDICI, by €15.0 billion (US$17.7 billion) in total, with an additional €1.0 billion (US$1.2 billion) moved from the budget margins for flexibility funding. These top-ups to the EU leaders’ deal included €1.0 billion (US$1.2 billion) more for NDICI, although it is not yet clear how that top-up will be distributed across NDICI’s programs. The deal now needs to be adopted by the Council but is currently being held up by two member states over their objection to the rule-of-law mechanism.

Implications of ‘Brexit’ on the EU’s ODA

The UK officially left the EU (Brexit) on January 31, 2020 but will continue to follow EU rules and maintain trade relationship during the transition period until December 31, 2020. In the meantime, the UK and the EU will negotiate a deal for future cooperation. Details on how Brexit will affect EU development policy will remain unclear until negotiations progress. It is unlikely that development will be a high priority in the negotiations, so even if a deal is reached on other elements of the EU-UK relationship, there may not be concrete agreements on the future of EU-UK cooperation on development. The EU has not yet decided (nor have member states agreed on their position) on whether and how non-EU countries can contribute to future EU development instruments.  

However, Brexit could potentially impact the EU’s development policy in the following way

• Reduce financial resources: If the EU institutions agree to the proposed NDICI, the UK would not be able to contribute to EU ODA via an extra-budgetary instrument, such as the current European Development Fund (EDF). However, it is possible that the UK could become an ‘associated country’ though the potential implications of if this has not yet been decided. Nonetheless, the EC’s latest proposal does not foresee reductions in the EU’s overall external action budget even though the UK will no longer contribute to the EU’s development funding. 
• Create a leadership gap: The UK has been a strong supporter of ‘value-for-money’, evidence-based policies, and a strong results agenda within EU development policy, emphasizing multilateral development assistance. 
• Reduce the focus on the poorest countries: The UK has advocated for a stronger focus on low-income countries and fragile states within the EU’s development assistance programs. It also provides significantly more ODA for health than any other EU member state.
• Sustain voluntary contribution: Regardless of Brexit, the UK has agreed to continue voluntary contributions to the EDF under an ‘observer status’ until 2020.