Member states cut funds to developing countries

By Judith Crosbie

Date: 24/05/06

Poor countries are to receive less development money than originally promised following a row over funding and administration costs for the far-flung island territories of some member states. Countries from the Africa, Caribbean and Pacific (ACP) group were originally to receive EUR 22.7 billion in development funds in 2008-13, as agreed at last December's EU summit, but now will see this budget

At a recent meeting of EU ambassadors, the UK, France and the Netherlands insisted an agreement was made last December to include in the development budget payment for their overseas territories, such as Britain's Falkland Islands, French Polynesia and the Dutch Antilles. They added that it was also agreed that funding for administrative costs, such as recruitment of local officials, would come from the European Development Fund (EDF). In the past these two payments have been made from the EDF.

But other EU states said there was no agreement this time to include these payments, which amount to EUR 700m.

As a way around the misunderstanding, some member states suggested using funds that have not been spent in the current EDF to make up the shortfall in the future development budget. Development projects occasionally fail or end up costing less than originally envisaged. The unspent money is normally returned to member states but in this case it was suggested it could go towards the future development budget as a way of resolving the spat over funding for overseas territories and administration. The UK and France are particularly keen on this idea.

But Germany, fiercely opposed to any increase in the EU budget, vetoed this compromise proposal.

Some member states, including Belgium, Luxembourg and Ireland, are opposed to the idea of reducing the amount of money going towards the ACP countries and insisted on excluding payments for overseas territories and administration from the development budget.

Member states made a political declaration to look again at the issue of using money not spent in the current EDF in 2010 after a review of development projects, but this is not a legally binding agreement.

The European Commission is furious that the budget for ACP countries is to be slashed. "We lose political glory on this. Although we offered them [the ACP] substantial development funds now because of money going towards the overseas territories and administrative costs they will be angry with us," said one Commission official. "It won't allow us to capitalise on the work we are trying to do with them."

But the UK contends there was an agreement to include these payments in the development fund back in December and in any case the overall fund was greatly increased on previous budgets.

"We don't feel too bad about it really, it's not as if the ACP countries are not getting what they deserve," said a UK spokeswoman.

Article reports on a dispute between EU Member States on the allocation of funds to overseas territories, such as Britain's Falkland Islands, French Polynesia and the Dutch Antilles. The question was whether under the 2007-2013 spending framework funds were to be taken from the budget share allocated to the EU's partner countries in Africa, the Caribbean and the Pacific (ACP countries).

• Primary Source

European Commission: DG Development: Overseas Countries and Territories (OCTs) https://ec.europa.eu/europeaid/node/317

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