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Restructuring of the European Commission –

Implications for International Development

Under the Amsterdam Treaty the Commission President has responsibility for determining the political direction of the Commission as a whole. He has greater powers than his predecessors to allocate portfolios to members of the Commission and to reassign their duties during their term of office. The proposals for the shape of the next Commission were presented to the European Parliament on 21 July by President-designate, Mr. Romano Prodi. These proposals have been made against the collective resignation of the whole Commission last March following the report by a Committee of Independent Experts set up to investigate allegations of serious fraud and mismanagement within the Commission. They have a number of implications for the EU’s international development work.

Under the proposed new structure there will be four Commissioners with external relations responsibilities. Mr. Chris Patten as Commissioner for External Relations will have a broad portfolio including a co-ordinating role for the Commission’s external relations as a whole. Mr. Poul Nielson will be responsible for development and humanitarian assistance, Mr. Pascal Lamy will cover trade, and Mr. Günter Verheugen will be responsible for the EU’s enlargement and its pre-accession strategy. Within this construction both Mr Patten and Mr Nielson will assume responsibility for all of the EC’s official development assistance. Both are new Commissioners and have headed the bilateral aid departments of their respective countries.

Proposed Reforms

Commissioner for External Relations

The DG headed by Mr Patten will take over the running of the aid programmes to Asia and Latin America (ALA), the Mediterranean (MEDA), the Former Soviet Union (Tacis) and some European Countries (e.g. Albania). These programmes disbursed around €2.5 billion in 1997.

The Service Commun Relex, (Joint Relex Service for the Management of Community Aid to Non-Member Countries) SCR will not be disbanded but will continue for the time-being under Mr Patten’s control. The SCR, was set up in 1998 (after mounting criticisms of the EC’s aid programme), to mange the implementation of Community assistance globally. Mr Prodi has announced that the role of the SCR in the project cycle will be reviewed.

Commissioner for Development

Mr Nielson will take over some of the work previously carried out by DGVIII, in so far as he will be responsible for all development assistance to the ACP countries governed by the Lomé Convention. He will also take over responsibility for the EC’s humanitarian assistance programmes managed by ECHO. ECHO and DGVIII’s aid programmes disbursed some €1.9 billion in 1997. It is understood that the Commissioner for Development will be responsible for development policy and development-related issues generally. However, only the EU’s relations with ACP countries will fall within the Directorate General for Development for which the Commissioner for Development is responsible. Other regions of the world fall within the scope of the Directorate General for External Affairs.

Trade Commissioner

All trade related activities will come under the responsibility of the Trade Commissioner, Mr. Pascal Lamy. This will include responsibility for General System of Preferences as well as trade policy with ACP countries. The new Commissioner will be responsible for trade policy and bilateral issues and will draw on the appropriate geographical services of the other external relations services. In future, trade disputes such as the one with the US over bananas will be handled by the Trade Commissioner. This change is seen as enhancing the ability of the EU to act more effectively in an area of key economic importance. Mr. Lamy will largely determine the EU’s approach to the WTO’s Millennium Round and complete the trade aspects of the current negotiations for a future agreement between the EU and ACP countries.

Commissioner for Enlargement

The process of the enlargement of the EU has been entrusted to one Commissioner, Günter Verheugen, who will have responsibility for a separate service within the Commission covering enlargement and the pre-accession strategy for countries that are seeking membership of the EU. These countries have been the principal recipients of the PHARE programme. The first wave of applicant countries are aiming to accede to the EU during the lifetime of the current Commission.

Significant Changes

The Development DG loses responsibility for Common Foreign and Security policy, human rights and democratisation, and trade policy.

It acquires responsibility for relations with international organisations.

The expanded role of the External Relations DG’reflects the impact of globalisation on the Commission. Mr Patten will co-ordinate the external relations activities of the Commission and will be its interlocutor with the newly appointed High Representative for the Common Foreign and Security Policy. The reform is supposed to ensure synergy between the geographical dimension and the thematic dimension (trade and development).

Mr Patten will co-ordinate the actions of the Trade, Development and EU Enlargement Commissioners. By grouping in one DG the responsibility for bilateral relations with the majority of countries (excluding applicants for EU membership and ACP countries), Mr Prodi hopes that the Commission will be better able to manage its activities in a co-ordinated way. The Commissioner for External Relations will consult appropriate geographical desks and seek the agreement of the Development Commissioner when dealing with CFSP matters. But the authority of the Commissioner for External Affairs appears to be paramount.

Fraud

Underlining the importance that Mr Prodi is giving to improving the Commission’s financial audit and control mechanisms, the new, independent Fraud Prevention Office (OLAF) will be strengthened and placed under the supervision of the Budget DG.

Concerns arising from the proposed re-structuring

Eurostep has a number of substantive concerns about the proposed new structure.

1. Procedural

There has been insufficient discussion of the merits of the proposed reforms prior to their presentation to the European Parliament. There has been increasing interest on the part of development, humanitarian and human rights NGOs in Europe and civil society in developing countries (as well as academic and governmental bodies) in the issue of institutional reform. While some of the proposed changes draw on recommendations that have been made for greater coherence in the aid programme others would appear to risk compounding existing problems.

2. Marginalising development

The re-structuring of the Commission services is liable to marginalise development further, and in effect equate development with the countries of the ACP. Aid priorities for Non-Lomé countries is liable to be distorted to suit (short-term) foreign policy goals. The Treaty on European Union identifies three principal objectives for development co-operation. These should be the basis guiding the EU’s external relations with all developing countries. There is a danger, however, that these will only really apply to the EU’s relations with ACP countries. Relations with developing countries in other regions will be influenced much more by the CFSP as these will be the predominant objectives within the Directorate General for External Affairs. It is therefore unclear how the two Commissioners (External Relations and Development) will ensure that the EU’s official aid policies and principles, such as human rights and environmental standards will be integrated throughout the development assistance programme.

3. De-linking trade from development

Moving all trade issues relating to developing countries to the Directorate General for Trade is liable to weaken the relationship between trade arrangements and development. The interests of developing countries are unlikely to be adequately reflected in the EU’s approach to trade negotiations. The EU’s development objectives will be even further displaced by the EU’s own interests. The next WTO round will look a the agricultural sector (crucial to most developing country economies). There is understandable concern that, in future, priority will be given to European interests at the expense of the poor in developing countries despite the vague promises made by the Commission to the contrary.

Divorcing development expertise from trade expertise encourages greater incoherence between the two policies. It is most unlikely that the EU’s trade considerations will be seriously influenced by development considerations. This has been difficult enough when the two competencies have been within the same DG. It also raises questions about the EU’s proposals for Regional Economic Partnership Agreements being the basis for future trade arrangements with the ACP countries, and in particular about how the social, gender, environmental, and human rights aspects of these new agreements will be incorporated.

The new arrangements also flies in the face of the expressed wish of ACP Ambassadors and civil society who have repeatedly emphasized the need to consider development objectives as over-riding in future EU-ACP trade negotiations. It could also erode the opportunity for the EU and ACP to work together to ensure that future WTO negotiations on liberalising international trade leads to equitable growth.

4. Separating policy and decision making from implementation

Almost one year after the creation of the Common Service for External Relations (SCR) there is widespread concern about its efficiency, capacity and ability to implement quality projects which are properly monitored and evaluated. Maintaining this structure in effect splits the project cycle so that one group of people designs projects and another implements them with no common hierarchy or effective coordination. It is likely, that while this separation continues the relationship between policy proposals and programme design will become increasingly incoherent..

5. Delegations

EU delegations are formally under the responsibility of Mr. Patten. Will they be restructured and their personnel expanded so as to ensure that they are able to relate to different Directorates General on a range of issues, and in particular the Trade DG?

6. European Investment Bank

There is no indication of the ways in which the loans issued by the EIB, particularly for developing countries, will be scrutinised to ensure that they comply with the objectives, standards and principles of the rest of the EU’s development programme. If these are to be consistent with the EU’s development programme such loans should require the approval of the Development Commissioner.

Conclusions

While recognising that the proposed reforms of the external services of the Commission are seeking to provide greater consistency of approach the actual result could be greater incoherence. The attempt to reform the services on a thematic approach rather than a geographical one is liable to marginalise development co-operation further and define it solely in terms of ACP countries, and Africa in particular. The stated competencies of the Commissioners should be reflected in the Commission services for which they are responsible. Therefore the Directorate General for Development should include all developing countries within its mandate, including those outside the ACP group as well as ACP countries themselves. In addition implementation capacity for the development assistance programme to those countries should be re-integrated into the DG. This would re-store the integrity of the project cycle. The Development DG also needs to retain some expertise in policy areas that substantially affect developing countries, such as trade and human rights. Without such capacity the EU’s approach in these areas will inevitably become increasingly removed from developmental considerations.

27 July 1999
 

Updated on 9 August 1999
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