Opinion on the Guidelines for the 2025 Budget – Section III

25.1.2024

Mr Johan Van Overtveldt

Chair

Committee on Budgets

BRUSSELS

Subject: Opinion on the Guidelines for the 2025 Budget – Section III (2023/2220(BUI))

Dear Mr Van Overtveldt,

Under the procedure referred to above, the Committee on Development has been asked to submit an opinion to your committee. At its meeting of 28 November 2023, the committee decided to send the opinion in the form of a letter.

The Committee on Development considered the matter at its meeting of 24 January 2024. At that meeting, it decided to call on the Committee on Budgets, to incorporate the following suggestions into its motion for a resolution.

Yours sincerely,

Tomas Tobé

SUGGESTIONS

Fallout from the MFF revision on EU budget 2025

1. Reiterates its call to equip the EU with resources that ensure its relevance in an increasingly complex geopolitical context and match its ambitions and global commitments stemming from the European Consensus on Development, the SDGs and the goals of the Paris Agreement;

2. Is concerned, therefore, that the Member states’ approach to the MFF revision as set out in the MFF negotiating box presented by the President of the European Council on 15 December 2023 will result in a 2025 budget that does not allow the EU to protect its positive impact on the global stage, increase its geopolitical influence, respond to the expectations of partner countries and reinforce its status as a reliable ally in development cooperation nor to meet the unprecedented humanitarian needs globally; is alarmed that such a revision will lead to redeployments from budget lines that sustain cooperation with the Global South; reiterates its concern that the EU is losing influence and visibility to alternative offers made by China and Russia;

3. Recalls that Parliament has been consistently advocating for sufficient EU capacity to address acute global challenges and consistently requesting a higher budget for external action under Heading 6 “Neighbourhood and the World” and that its resolution of 12 December 2023 on the implementation of the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI-GE) stresses that the 2024 mid-term review of the MFF should, under no circumstances, result in the NDICI-GE funds being cut or reallocated between the long-term thematic and geographic programmes; points out that the NDICI-GE Regulation states, i.a., that ‘the financial envelopes envisaged for the Neighbourhood and Sub Saharan Africa geographic programmes should only be increased, given the particular priority the Union gives to these regions’;

4. Recalls the political commitment related to the budgetisation of the European Development Fund - in terms of flexibility, predictability and carryovers - and is concerned that it will be negated by the redeployments among budget lines as envisaged by the Council approach to the MFF revision;

5. Recalls the commitment made by the EU and the Member States to increase their ODA to 0,7 % of gross national income by 2030 and calls on the Commission and the Member states to honour it in the 2025 budget and the MFF revision; notes that the Member States that joined the EU after 2002 committed to striving to increase their ODA/GNI to 0,33 %; welcomes the efforts that these and other Member States have made so far to gradually scale up their ODA spending; encourages them to continue on this track;

6. Recalls the target for biodiversity spending of 10% for the years 2026 and 2027 and the target for climate spending of 30% in the current MFF as well as the need to fulfil its global financial commitments under the UN framework and the pledges to the Loss and Damage Fund;

7. Reaffirms the commitment outlined in the NDICI-GE Instrument to addressing the root causes of irregular migration and forced displacement; is of the opinion that, without prejudice to unforeseen circumstances, the commitment within the Instrument to dedicate an indicative 10 % of the Instrument’s financial envelope to actions supporting the management and governance of migration and forced displacement within the objectives of the Instrument should be respected and that this clause should not be reopened; notes, however, that 14 % of the funds committed in 2021 contributed to the migration spending target; expects to receive regular substantial updates on the state of play;

8. Against this background, requests a clear analysis from the Commission with detailed breakdowns of the fallout of the MFF revision on the remaining financial programming under Heading 6;

Rising humanitarian needs versus shrinking EU capacity

9. Recalls that humanitarian needs increased dramatically during last years because of crises and natural disasters worldwide, significantly increasing inequalities and causing global spillover effects, and that as a consequence humanitarian aid remains one of the most pressured instruments under the EU external action policy and that it continuously relies on ad-hoc budgetary reinforcements;

10. Is alarmed, therefore, by the proposal to split the Solidarity and Emergency Aid Reserve (SEAR) in a way that will only benefit the European Solidarity Reserve (EUSF) and reduce resources for humanitarian aid by substantially diminishing possible SEAR reinforcements to the humanitarian aid instrument (HUMA), resulting in a reduction of around 15% for HUMA compared to the 2021-2023 average;

11. Recalls that humanitarian needs are at an all-time high and that according to the Commission estimates the actual needs are exceeding the initial Humanitarian Aid envelopes by EUR 7, 9 billion over the period 2024 to 2027 while Team Europe humanitarian funding decreased from 45% (2019) to 30% (2022) of global humanitarian response; reminds that women and children, older persons and persons with disabilities are particularly vulnerable groups that bear the greatest consequences of limited access to humanitarian aid;

12. Calls on the Council to honour its Conclusions of May 2022 on Closing the humanitarian funding gap and, furthermore, in view of the lack of reserves, emphasises the need to increase HUMA in the 2025 EU annual budget; underlines, moreover, the urgent need for increased efforts to broaden the resource base for humanitarian action, drawing on the resources of traditional, emerging and potential donors, the private sector as well as other stakeholders;

Cushion depletion and no flexibilities to respond to unexpected needs

13. Is concerned by the early depletion of the NDICI-GE ‘Emerging challenges and priorities’ cushion, of which 80 % was already used or allocated as of March 2023 and this trend would only aggravate as per the 15 December 2023 MFF revision negotiation box; points out that this negates the rationale of the cushion as a flexible reserve to respond to unexpected needs as well as the political commitment related to the budgetisation of the European Development Fund and is worried that in view of the Samoa agreement with the ACP countries, the credibility of the EU could be at stake;

14. Reaffirms its unwavering support for Ukraine, in all its dimensions, including humanitarian assistance, recovery, reconstruction and modernisation, in the face of the ongoing Russian war of aggression; stresses, however, that this support should not come at the expense of the Global South; notes that the financing of assistance for Ukraine through the mobilisation of the cushion, rather than through the appropriate budgetary instrument, has exhausted much of the cushion, leaving the NDICI-GE with limited ability to respond to unforeseen challenges; welcomes the Commission proposal on establishing the Ukraine Facility which should ensure sustainable long-term financing for Ukraine while preserving the Instrument’s ability to cope with future challenges;

15. Is concerned that Heading 6 flexibilities and reserves were already substantially consumed and mobilised ahead of the MFF revision, leaving the 2025 budget severely constrained to respond to any new challenges let alone make new investments or pledges towards global common goods. Points out that the Commission identified very limited redeployment opportunities - as the NDICI-GE in 2025 to 2027 is constrained by decreasing financial programming profile and that any further redeployments would impact bilateral cooperation with partner countries;

16. Warns that Next Generation EU interest rate projections suggest that without a revision of the MFF there will be no flexibilities available in the special instruments in 2025 and onwards. This and the depletion of the cushion constrain the capacity of the EU in external action and humanitarian aid.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The rapporteur declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.