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Commissioner Nielson's Speech on a Europe of 25 in a World of 193

Minister Wieczorek-Zeul,
Chair,
Ladies and Gentlemen,

In 2004 we'll be 25 countries in Europe and 193 in the World. More than one out of eight countries in the world will be members of the EU. This meeting asks a very simple question: how will the EU of 25 relate to the 143 developing countries in the world?

I congratulate our German hosts for convening this meeting, and for having invited representatives from the future Member States. My contribution to the discussion is to ask:

• Why is the EU doing development co-operation ?
  
  
• Which way are we going?
  
  
• And then to conclude with some food for thought for our new members.

1. Why, then, is the EU doing development co-operation?

Milk quotas and nuclear reactors were some of the final sticky points in the accession talks. Development issues did not feature prominently…

But development policy is not a "flanking" policy, a charitable appendix to the main body of EU competence. Rather, development co-operation is the seed that shapes the future. Historically, this has certainly been the case in Europe.

European integration itself started with development co-operation. European co-operation was triggered by the need to organise the logistics of distributing the Marshall aid in Europe. Actually, Europe was divided for more than 50 years partly because the current EU members could accept the aid while other European countries could not.

So today's Europe was born as a recipient, only to become a donor within a few years. Indeed, the six founding members decided to turn their ties with former colonies, mainly in Africa, into a Community matter.

Since then, the European Communities were gradually pulled into ever increasing responsibilities: When the UK joined, programmes expanded to include former British colonies in Africa and in Asia. And enlargement to Southern Europe later saw an expansion of our co-operation to North Africa and Latin America, and also Asia was added.

The fall of the Berlin wall led to the launching of the PHARE programme, and the creation of TACIS followed the disintegration of the Soviet Union.

Today's EU development co-operation is therefore very much a product of history, and of the history of enlargement. EU aid to other countries is a fundamental part of what the EU is all about. It has accumulated to an annual level of commitments around € 10 billion and some 10% of global official development aid.


2. Where is EU development co-operation going?

Since 1999, the Commission has made great efforts to make highly necessary improvement to the efficiency and the quality of EC external aid. Progress has been made across the board -- in terms of accelerating delivery and clarifying the general policy.

It has been my clear objective to define a role for EU development co-operation that complements the bilateral efforts of member states. In November 2000, the Commission and the Council reached a clear agreement on how to organise this division of roles.

This agreement gives the Commission important responsibilities in areas such as macro-economic support; trade-related assistance; regional co-operation; economic infrastructure (roads); rural development and general capacity-building.

Beyond this division of labour intended to avoid overlap between EC and bilateral efforts, something new is also happening:

First, leading up to the UN Conference on Financing for Development in Monterrrey the fifteen EU Heads of State decided to increase ODA in order for the EU average to increase from the present 0.33% of Gross National Income to 0.39% of GNI in 2006. The Commission is monitoring progress, and we're currently finalising a report on this for discussion at the May Council of Ministers. My first impression from the replies so far is positive.

Secondly, a decision to pool resources at Community level creates synergies and resolves burden-sharing issues up-front. So we're trying to see whether further co-ordination and harmonisation at EU level would make sense. All member states agree that we should formulate proposals for taking this forward in four pilot countries. But we clearly have to be able to demonstrate operational added value in doing so, and I do not intend to draw any hasty conclusions from this exercise.

Thirdly, in preparation for the Johannesburg summit on sustainable development, the EU agreed to launch common initiatives on Water and Energy. Frankly speaking, these political decisions were taken before the operational feasibility had been ensured. We're currently struggling to give reality to these commitments. The decision as such, however, calls for a close co-ordination of Community and bilateral efforts.

Fourthly, the Commission's development co-operation has clearly gone mainstream with respect to donor co-ordination. We explicitly adhere to the Poverty Reduction Strategies as a basis for our Country Strategy Papers, agreed and discussed with partners countries, member states, other donors and UN agencies. This is new. And it is accompanied by far-reaching efforts to decentralise decisions and resources from Brussels to our delegations.

It is encouraging that a recent German survey to assess the impact of the reform process reported a positive or even very positive improvement in the co-ordination and complementarity among Commission and Member States efforts in the field.

The German study reveals a positive trend, but there is certainly room for further improvement.

The perception of EU efforts in the field remains that we are "15+1". Policies are qualified as "heterogeneous" and clearly -- and this is a real problem for aid effectiveness - procedures for bidding, reporting, and auditing are too divergent and imposing high co-ordination and transaction costs on partner countries. We can do better.

The Convention on the Future of Europe deserves a special mentioning here.

My main objective in the Convention is to ensure that development is something both the Community and Member States will continue to do. I am pleased to see that this is also the orientation given by the Convention.

The Constitutional Treaty should acknowledge EU development policy as a policy in its own right with poverty eradication as the key objective.

Furthermore, development policy must not be isolated from other policies such as trade, agriculture, fisheries, health, migration and environment. These policies all affect developing countries. The rules on coherence in the current Treaty are weak and need to be reinforced.

We also need to ensure that the 50% of world ODA that we deliver pulls in the same direction. It does not mean we all have to do the same. But to become more efficient we have got to work more in synergy and towards the same objectives. One instrument would be Regional and Country strategies agreed by the Union and framing our common action. For this, I see a need for some better Treaty language.

The budgetisation of the EDF is not a new idea but no less relevant. The EDF is not an integral part of the general budget of the EU. It is therefore not subject to Parliamentary control by the European Parliament. And it lives its own life outside the normal framework. This is an anomaly. The EDF is an important policy domain of the EU and should as such be subject to normal parliamentary control as other policy domains. The integration of the EDF in the General Budget would achieve this objective and bring about a single legal framework for the management of development funds.

Let me say also a word on humanitarian aid. I am pleased that in the Convention humanitarian aid is regarded as a policy and that it will for the first time have its own legal basis in the new Treaty. The relevant articles must adhere to the basic principles of humanitarian law such as neutrality, non-discrimination and impartiality.

Allow me a few harsh words on the Common Foreign and Security Policy (CFSP). Faking unity where there is none creates expectations which turn into disillusion. I prefer honesty and frankness.

No doubt European countries share important values we want to stand up for. But to achieve an effective CFSP you need more than that. You need the political will to act collectively. And you need the procedures to define and implement the common will.

We need a reality check on what works and what does not work for Europe. CFSP procedures do not work - as the weeks prior to the war on Iraq have painfully illustrated.

The solution is simple: we must extend qualified majority voting to all areas of external relations -- except defence. Only this will work in a Union of 25. You would see a stronger will to compromise.

On this point, I find it very encouraging that the German chancellor last week called for increased use of qualified majority voting and for preservation of the community method and the current institutional balance. This makes Germany the first big Member State to express views that are compatible with what government representatives of sixteen small current and future member states expressed in a joint paper in the Convention last week.


3. Let me now turn to issues facing future members

Future members of the club face a number of choices and challenges:

First, the money: Increasing development assistance will be quite a challenge for many of our new Member States. It would be unreasonable to expect the new members to go to 0.39% by 2006. The best advice I can give is for the new members to support budgetisation of the EDF. They would get credit for their contribution, influence the policy and access bidding on contracts.

Second, the policy: Over the past years, the accession countries have been associated to thousands of EU statements on all matters before the United Nations General Assembly and several hundreds of demarches in capitals across the world. Now is the time to bring your experience to play.

Your membership will create a number of new EU-borders. I would find it natural for you to argue in favour of support for stability in the Balkans, the Caucasus and in the Central Asian Republics. You bring history and experience to those relations, and I look forward to your contribution. The President of the Commission has launched the discussion on "A Ring of Friends" and next year's budget proposal already implies increasing commitments to those areas. I do hope, however, that an increased overall budget ceiling will continue to protect us against discussions about "making Africa pay for the Balkans" etc…

But it is not just about the geographical priorities of EU development aid or amounts in Euros. It is also about political will to consider the interests of developing countries when discussing other Community policies. And so your positions on the reform of the Common Agricultural Policy; on the reform of the Fisheries policy and on trade policy will be important.

Thirdly, the administrative set-up: acceding members will need to strike their own balance between bilateral and multilateral aid, the extent to which they want to rely on Community instruments and to what extent they - as donors - want to build their own institutional capacity. The choice is yours and it's completely open. I hope this meeting will provide useful guidance.


4. Let me conclude

Europe's responsibility has grown by every enlargement, and this is the biggest enlargement ever. The EU of 25 must help to build rules and institutions that benefit the World of 193.

The EU of 25 should use its influence in the world to build dialogue, peace and development. Not competition or rivalry. And we should not be guided by old-fashion geo-politics belonging to the 19th century.

European integration ended war across the Rhine and the division of the Berlin wall. We did not come all this way to start a quarrel across the Atlantic, or to fall into the trap of a clash of civilisations starting at the Bosporus. What we need is tolerance and a civilised meeting of cultures.

What we strive for is strong, fair and equitable global governance and an international community created on the basis of binding commitments and the rule of law.

Let me end by quoting former Czech President Vaclav Havel :

"The time when Europe conquered the world is over. I hope the time is about to begin when Europe will stand as a source of inspiration to other parts of the world. As a source of effective assistance, and as an example of how peoples and nations can live together in peace and co-operation, using the world's resources with caution and mutual support."

The President is perfectly right.

I thank you for your attention.

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