DEVELOPMENT-EU: Budget Cuts Foreseen to Finance Western Balkans Plans

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Brian Kenety

BRUSSELS, May 11 2000 (IPS) - The European Union (EU) Executive Commission Wednesday adopted a preliminary draft budget (PDB) for 2001 that foresees “deeper involvement” in foreign affairs with an emphasis on assistance to the Western Balkans and a “commitment to enlargement” of the Union eastwards.

The PDB also proposes allocating resources for a rapid reaction fund, to eliminate time delays when responding to emergency situations.

However, in order to contribute to the financing of the Western Balkans programme, the Commission is proposing cuts in commitments in “most of the other external actions” p most probably in programmes for Latin America.

EU Budget Commissioner Michaele Schreyer said in a statement upon release of the Commission’s PDB for 2001 that it “is a rigorous one, but also that of a responsible Union, concerned for the European citizen as well as for third countries.”

CLONG, the Liaison Committee of Development NGOs to the EU, which represents some 900 non-governmental organisations as well as the majority of European Parliamentarians, has, however, called for an increase in the budget that would not finance Kosovo at the expense of European budget lines intended for the rest of the developing world, as was provided in the draft budget for 2000.

The PDB amounts globally to 96.924 billion euros in commitment appropriations and 93.874 billion euros in payment appropriations. This “respects the budgetary discipline” and priorities agreed by the 15 EU member states, she said.

Assistance to the Western Balkans, and in particular the breakaway Yugoslav province of Kosovo, represents the lion’s share of appropriations allocated in the budget for so-called external actions.

About 815 million euros are planned for the region – Albania, Bosnia-Herzegovina, Croatia, the former Yugoslav Republic of Macedonia and the Federal Republic of Yugoslavia (mainly to Kosovo and Montenegro) p a considerable increase compared to 2000.

For Serbia, currently only a small amount of assistance is foreseen. However, if Belgrade “embraces democracy,” and votes Yugoslav President Slobodan Milosevic out of office, the Commission will request mobilisation of a flexibility instrument for up to 200 million euros in assistance to Serbia proper.

EU External Relations Commissioner Christopher Patten told reporters here that the Commission had agreed Wednesday to a new regulation on assistance to the Western Balkans and was committed to reforming the delivery of external aid, both “the administration and the legal basis” of it.

The primary reason for the overhaul was to promote the political aspect of EU programmes in the region, under the Stabilisation and Assistance Process, a contractual relationship designed “to integrate them as closely as possible into the political and economic mainstream of Europe.”

“The second reason is the management of aid, to try to streamline and accelerate European Union assistance to the region,” he said. It would replace the current aid programmes to the Western Balkans, Phare and Obnova, which have separate administrative and management procedures.

“Our new priorities areas for assistance are, first of all, support for democracy, human rights, minority rights and the rule of law; secondly, the transition towards real market economies and economic development, based on internal and external opening,” said Patten.

This represents a move away from straightforward assistance for reconstruction for the Western Balkans.

CLONG has objected to the linkage of politics to the delivery of humanitarian aid, such as was the case with the EU “Energy for Democracy” programme of this past winter, whereby the EU supplied heating oil to Serbian cities considered in opposition to the Milosevic regime.

Patten told reporters the EU sanctions now in place against Serbia have targeted “Milosevic and his henchmen,” and pointed to the Energy for Democracy programme as a “success,” and one that the Commission would propose be followed up in the coming months by an “Education for Democracy” programme that would help “decent Serbians to invest in a better future for themselves, in particular, a better future for their children.”

The proposed increase in funds is to be financed by re-deploying appropriations from agricultural policy in 2001 and 2002. In the following years the Commission and the budgetary authority undertake to provide a further 300 million euros a year for external policy without increasing the overall ceiling agreed by EU member states in Berlin earlier this year for the period 2003- 2006.

In all, a maximum of 5.5 billion euros will be earmarked for the Western Balkans for 2000-2006. The aid is to be financed from three sources; financial programming had already set aside 1.85 billion euros for the Western Balkans and it was decided during the 2000 budgetary procedure to allocate a further 200 million euros from the flexibility instrument for reconstruction in Kosovo.

Re-deployment of appropriations for external relations will release a further 1.4 billion euros. An additional 1.8 billion (300 million euros per year from 2001 to 2006) will also need to be allocated to external policy measures. For 2001 and 2002 the Commission proposes to re-deploy 300 million euros per year from agricultural expenditure. The Commission proposal includes a large sum for Serbia -2.3 billion euros p to be made available “only if Serbia embraces democracy.”

Should the political situation in Serbia change in 2001, 200 million euros can be drawn from the flexibility instrument.

Schreyer said last week, that by including the financing for assistance for Serbia in the calculation of the requirements for the Western Balkans “the Union is sending out a strong political signal to the democratic opposition in Serbia.”

In order to contribute to the financing of the Western Balkans programme, however, cuts in commitments are proposed in most of the other external actions compared to the 2000 budget, but payments to the beneficiaries will continue to rise for nearly all external policies fields.

The Commission, however, said that even with these proposed cuts, funding was still above the level compared to the earlier programming period 1993 – 1999.

For food and humanitarian aid, funding stays at the level of the 2000 budget. Generally, the Commission “continues to concentrate on actions targeted at the poorest,” it said in a statement Wednesday.

Patten noted that the EU often commits more than it spends. In the Mediterranean, for example, the EU last year committed “well over a billion euros … we spend, if we’re lucky, 40 percent. What I want to do is increase the amount of money we spend, even if we are a bit more realistic about how much we commit.”

In response to a reporter’s question as to whether Latin America and Central America would bear the brunt of cuts in other external actions, as it appeared from the PDB, Patten pointed to the distinction he made between EU commitments and what is actually spent.

“Latin America has been as affected by that as the Mediterranean countries p these are figures we will be producing when we come forward with our external assistance programmes p but at the present rate of spending, it would take between seven and eight years to spend the commitments we’ve made in Latin America,” he said.

“But we are not proposing to cut p heavily p our programmes in Central America,” he said.