There is a new paradigm for EU International Cooperation: with a geopolitical focus and a new financial instrument, the newly formed EU Directorate-General for International Partnerships (DG INTPA) is interested in bilateral cooperation and joint programming Team Europe programmes.
At the end of 2019, when the current European Commission took office, several changes in the EU’s international cooperation policy were on their way, from a “donor-recipient relationship” to “partnerships of equals” between the EU and developing countries.
As Commissioner Urpilainen pointed out, “the European Commission should scale up its ambition of being a geopolitical actor”.
The EU institutions are not only the third largest donor after the US and Germany, but also the second largest grant aid pool (in terms of volume) after the World Bank. However, in today’s global order, European powers seem to be losing ground to the benefit of some competitive, emerging countries – first and foremost: China.
Thus, a change was needed, and it has already been made. Now, the European Commission’s Directorate for Cooperation and Development (DG DEVCO) has turned into the Directorate General for International Partnerships (DG INTPA).
This new DG is characterised by an increased focus on bilateral cooperation, which constitutes a major shift in EU development cooperation. Geographic programmes now constitute the main source of development funding, accounting for 75 percent of the total financial envelope.
With an overall allocation of €79.5 billion in current prices, the new instrument will cover the EU cooperation with all third-world countries. The total allocation will be divided as follows:
- €60.38 billion for geographic programmes (at least €19.3 billion for the Neighbourhood (an increase of €2 billion), €29.18 for sub-Saharan Africa (no change), €8.48 billion for Asia and the Pacific and €3.39 billion for the Americas and the Caribbean).
- €6.36 billion for 5 thematic programmes (Human Rights and Democracy, Civil Society Organisations, Peace, Stability and Peace Conflict Prevention and Global Challenges).
- €3.18 billion for rapid response actions.
Indeed, the Directorates first in line are now geographic and deal with, respectively, Africa, Latin America, the Caribbean and OCT and the Middle East, Asia and Pacific.
The creation of a flexibility cushion and a rapid response pillar are yet more radical proposals within this budget. They consist of €9.5 billion for unforeseen events, emerging challenges, and new priorities and €3.18 billion for crisis response.
On the other hand, a new international development instrument has been created. On 18 March 2020 EU member states and the European Parliament’s Foreign Affairs and Development Committees finally approved the new Neighbourhood, Development, and International Cooperation Instrument (NDICI)-Global Europe, for the new EU budget cycle 2021-2027. The instrument, worth €79.5 billion over the period 2021-2027, marks a profound transformation of EU development policy and spending.
Pre-2021, EU external spending was extremely complex and fragmented. No fewer than 10 overlapping and incoherent financial instruments (excluding special funds) were designed for international development and humanitarian spending, with limited ability to address unforeseen events and emerging priorities.
Under the new framework, seven of the ten instruments were merged into a single instrument—the NDICI— in an effort to rationalise EU development spending. These include the off-budget European Development Fund (EDF), which finances cooperation with African, Caribbean and Pacific (ACP) countries, and the European Neighbourhood Instrument with countries on the periphery of the EU. The NDICI places at its core cooperation with the EU’s two priority regions: sub-Saharan Africa and the Neighbourhood (the EU’s eastern and southern neighbours).
Additionally, in the new structure innovation and private finance for development have a more prominent space than in the past. But the EU is not unfamiliar with it: over the last few years, the European Commission has been putting an emphasis on the role of the private sector in development and has increasingly replaced grants to partner countries with loans. This trend is reflected in the EU budget and is part, for example, of the EU Global Response to Covid-19.
The unit in charge of the development effectiveness agenda will now be responsible for the Team Europe approach. In other words, Team Europe, which was a feature of the EU Global Response to Covid-19, is meant to remain a key part of EU development cooperation. This has to be read not only as a step forward in terms of effectiveness (aiming to improve coordination between EU donors in partner countries), but as part of some attempts to give a European face to aid projects and programmes on the ground.
Indeed, the NDICI gives new impetus to greater collaboration between European development actors. The rules governing the instrument specify that joint programming is the preferred approach for country programming. This gives the European Commission the legal backing to make the Team Europe approach—combining its own expertise and funding with that of the member states and the European development finance institutions—the norm rather than the exception. Joint programming is already actively ongoing in 79 countries, although, to date, only 22 joint strategies have been signed. However, although joint programming is emphasised as preferable, joint strategies and implementation remain voluntary.
While the focus on geographic spending programmed at country level rather than according to thematic priorities paves the way for cooperation that is better aligned with the objectives and needs of partner countries, there is a risk that, with less funding, global challenges may be neglected. However, the NDICI is aligned with a number of the EU’s international commitments, including the Paris Agreement on Climate Change: 30 percent goes to climate objectives, ten percent to “actions supporting management and governance of migration and forced displacement,” and 20 percent to social inclusion and human development, including basic social services such as health, sanitation and hygiene, education, water, nutrition and social protection.
In addition, the DG INTPA looks today much closer to how the European External Action Service (EEAS) functions – both in structure as well as in the narrative used to present it. These concerns raise the question of whether the DG INTPA will work more as an operational development agency (with the EEAS being more of a lead) or will act as a more political body, moved by the EU’s strategic interests – not by clear-cut development goals.