EU wastes aid money.....quelle surprise encore!

The excellent site Open Europe has just published its analysis of EU spending. Here is its summary.

The UK currently contributes £1,424m to EU external aid spending, around 18%

of the UK’s £7,767m total aid budget. The UK Government has said that its

recent “plans to redraw the aid map will concentrate efforts on countries where

UK aid will, pound for pound, achieve the best results in fighting poverty and

building a safer world.” This redrawing of the map must also include EU aid.

Money spent as EU aid continues to be poorly targeted at tackling poverty. Only

46% of EU aid reached lower income countries in 2009, compared with 74% of

UK aid and 58% of EU member state governments’ aid.

Geographical proximity and ties with former colonies continue to determine the

destination of much of the Commission’s foreign aid. From 2000-2009,

developing European countries received $10.49 per capita, while Sub-Saharan

Africa received only $3.94 per capita. Turkey was the top recipient of EU aid in

2009 and other European neighbours Kosovo and Serbia were also in the top ten

recipients.

EU aid, which is managed by the European Commission, currently has

administration costs of 5.4%, which are higher than the UK’s Department for

International Development’s (DFID) costs of 4%, and the UK Government’s target

of reducing these to 2% by 2014-15. Some EU aid streams, such as the

programme for African, Caribbean and Pacific countries, have administration

costs as high as 8.6% - above the ceiling the UK imposes when giving grants to

NGOs.

€1.4bn or 10% of EU aid is needlessly passed on to other multilateral donors

every year, such as the UN and World Bank. This money is simply being recycled

between donors – up to three times in some cases – before it reaches a recipient

country and is subject to unnecessary administration and transaction costs. In

2009, the Commission also agreed to ‘delegate’ €242.7m worth of aid spending

back to the EU’s national governments, which begs the question why the money

was ever given to the EU by member states in the first place.

EU aid is too often not aligned with other EU policies. For example, in 2008, the

Commission established a migration centre in Mali to provide support to migrants

seeking temporary jobs in the EU. However, with only Spain having signed a

migration agreement with Mali, the €10m centre has helped only six Malians find

work in Europe, although the centre also served as an information and education

hub.

The EU’s current drive to transfer up to 50% of its aid directly to recipient

governments’ treasuries, through ‘budget support’, rather than pre-agreed

projects means that the EU risks donating money directly to discredited or

illegitimate regimes.

While budget support does offer benefits, such as better alignment of aid with

recipient countries’ national policies, the EU often lacks the proper controls and

monitoring to ensure money is not wasted or lost to corruption. The huge focus

on budget support risks an overreliance on an unproven development policy.

Some aid funding does not even leave the EU, or even Brussels. In 2009 alone,

the EU granted a Brussels-based communications agency nearly €500,000 to

produce various promotional brochures and campaigns. This included €90,000 to

co-ordinate an “I fight poverty” music contest amongst young people in Europe, to

increase “development awareness”.