By Gunter Nooke
BERLIN, Jul 10 2015 (IPS)

When the three-day conference on Financing for Development begins on Jul. 13 in Addis Ababa, the competitors in this year’s Tour de France will have reached the mountains. They will have already experienced a few spills and will still have many kilometres to go.

A similar situation is facing us with the many important conferences taking place in this important, watershed year for development.

Günter Nooke. Credit: Bundesregierung/Bergmann

The journey began with a successful and financially productive pledging conference organised by Gavi, the global vaccine alliance, in Berlin in January, and it is set to end in December with the conclusion in Paris of a climate agreement that is binding under international law.

In between, we had a G7 Summit at Schloss Elmau in Bavaria in June that will surely remain in our memories for a long time. For one thing, this was probably the first summit where so many guests were invited to attend for such a long time and where development issues were so prominent on the agenda.

Heads of government from Nigeria, Senegal, Ethiopia, Liberia, Tunisia and Iraq were joined by the heads of international organisations such as the United Nations, World Bank, International Monetary Fund (IMF), World Trade Organisation (WTO), International Labour Organisation (ILO), Organisation for Economic Cooperation and Development (OECD) and U.N. Environment Programme (UNEP).

As announced by German Chancellor Angela Merkel in Brussels back in 2014, it was a true development outreach focusing on Africa for all that security issues also played a major role.

For the first time ever the heads of state and government of the G7 countries agreed to strive for a carbon-free world by the end of the century. Merkel, Germany’s environment minister at Kyoto in 1997 and the climate chancellor of Heiligendamm in 2007, has once again succeeded in convincing others to join forces in forging ahead with regard to an important issue.“If the countries of Europe and Africa could agree that those who use up more of the permitted volume for storing CO2 in the atmosphere than others should pay more into the climate fund, then we would have taken a huge step forward. And those whose CO2 emissions are lower … should enjoy a comparatively greater benefit from this climate money"

So far what we mostly have are words. Germany is the only industrialised country to have significantly increased its Official Development Assistance (ODA) in 2015.Germany stands by the 0.7 percent target, but is unwilling to commit to a rigid timetable with fixed increments for increasing ODA.

Of course, ODA remains important but there are other sources for financing development. Above all it is about how efficiently the money is spent and whether the burden is fairly shared. That should also be the most important leitmotif for the Financing for Development conference in Addis Ababa.

It will scarcely be possible to get binding financial commitments from everyone in Addis. It would also be a great shame if developing countries were to call for more money from the industrialised countries and donors and the “accused”, having been put on the spot, were to respond by pointing the finger at the poor performances of the developing countries when it comes to governance, legal certainty, human rights and an independent judiciary.

Instead of confrontation it would be better if efforts were made in Addis, as they were in Elmau, to continue laying the ground for working together on a basis of mutual trust, with concrete topics and fields of cooperation being named.

Before the December climate conference in Paris, there will be the General Assembly week in New York with all the heads of state and government, a meeting that is especially important this year.

This will be the occasion for agreeing on new goals for sustainable development, on a new pact on the world’s future with concrete goals (Sustainable Development Goals – SDGs), with targets for both developing and industrialised countries.

The intention is that all countries should each make their own contribution. The SDGs are to be universally applicable, but with shared yet differentiated responsibilities for achieving them jointly.

The success of the Elmau summit was the outcome of a rare harmony between language and substance. The Group of Seven is not just a group formed by the world’s strongest industrialised countries. Following the exclusion of Russia, it has once more become evident how much we need a partnership of countries that really want to build a community of values.

The situation at the United Nations, where 193 nations are represented by their national governments, is different.

Surely, in this critical situation and in the interests of Germans and Europeans, it behoves us to work towards a special trust-based partnership between Africa and Europe. The only way for the countries of Europe and of Africa to develop in peace is by working together as good neighbours.

If we take this partnership a bit further in Addis and in New York, then we will also be successful in Paris and will reach a binding climate agreement. And then we will no longer be able to get away with being vague about the numbers, we will have to share out the CO₂ savings among us and, from 2020 onwards, find the 100 billion dollars for the Green Climate Fund.

If the countries of Europe and Africa could agree that those who use up more of the permitted volume for storing CO₂ in the atmosphere than others should pay more into the climate fund, then we would have taken a huge step forward. And those whose CO₂ emissions are lower than the average level or the maximum level per head according to the dictates of sustainability should enjoy a comparatively greater benefit from this climate money.

This arrangement would be good for everyone in Europe and in Africa. Germany, the strong export nation with emissions levels of about nine tonnes a head, would have to pay a lot of money and countries like Burkina Faso or Malawi would receive a lot. And a country like Nigeria would also finally have an incentive to put an end to gas flaring once and for all.

There are many mountains and cliffs to overcome before reaching Paris, not just for the participants in the Tour de France. However, it is important that we know the route. Otherwise we may find that there are only two parties sitting at the table together in Paris and talking about what they – the United States and China – consider acceptable.

Europe and Africa would be out of the running. This other way is not the route that will lead us to our goal.

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

The European Commission is calling for SDGs to address poverty eradication and sustainable development together in three dimensions – economic, social and environmental. Photo credit: UNFPA Sudan

By Ramesh Jaura
BRUSSELS, May 5 2015 (IPS)

In the run-up to the international Conference on Financing for Development from Jul. 13 to 16 in Addis Ababa, Ethiopia, the European Union has called for a “true paradigm shift” in global development cooperation.

The Addis Ababa conference will be followed by the U.N. post-2015 Summit in New York and the Climate Change conference in Paris in December. “These meetings will define our future and will set the level of ambition of the international community for the years and decades to come,” according to European Union Commissioner for International Cooperation and Development Neven Mimica.

The Addis Ababa conference on development financing in July and the Paris climate conference in December offer a “once in a lifetime” opportunity “to end poverty, achieve shared prosperity, transform economies, protect the environment, promote peace and ensure the respect of human rights” – Neven Mimica, European Union Commissioner for International Cooperation and Development
This, Mimica believes, offers a “once in a lifetime” opportunity “to end poverty, achieve shared prosperity, transform economies, protect the environment, promote peace and ensure the respect of human rights.”

The European Commission, which represents the interests of the 28-nation European Union, believes that the sustainable development goals (SDGs) to be agreed in New York in September should not only cover “traditional” development challenges such as poverty, health and education, but go much further and address poverty eradication and sustainable development together in three dimensions – economic, social and environmental.

The Commission is pleading for “moving towards a universal agenda”. This means that the goals and targets to be agreed in New York will apply to all countries, challenging them to achieve progress domestically, while contributing to the global effort. “Such a far-reaching agenda can only be delivered through a true global partnership,” said Mimica.

The E.U. Development Commissioner is backed by an eminent group of experts from Finland. France, Germany and Luxembourg, who have authored the fifth edition of the European Report on Development (ERD), which focuses on ‘Combining Finance and Policies to Implement a Transformative post-2015 Development Agenda’.

Mimica wants the agenda to serve to mobilise action by all countries and stakeholders at all levels: governments, private sector and civil society, all of which would need to play their part.

The key message of the ERD report, launched on May 4, is that policy and finance go together and that they are both crucial to implement a transformative post-2015 development agenda.

Based on existing evidence and specific country experiences, the report shows that finance alone is not enough – it seldom reaches the intended objectives, unless it is accompanied by complementary policies, the right combination of financing and enabling policies, says the report.

According to Mimica, “the findings and analysis contained in the report provide a most valuable research-based contribution to the debate, particularly in view of the Addis Conference on Financing for Development – but also beyond”.

“In this crucial year for international development cooperation, the 2015 European Report on Development can serve as a key point of reference, not just for the European Union, but for the international community at large,” Mimica said at the launching of the report.

The findings of the report are in line with three major guidelines which would drive the E.U. Commission’s action to implement the new development agenda:

• if it is not sustainable, it is not development
• if it is not resilient, it is not development
• if it is without women, it is not development

In many ways, the report complements and supports the work of the Commission in advocating a comprehensive approach to the means of implementation for the post-2015 development agenda. At the same time, it challenges the Commission to keep pushing our thinking forward, said Mimica.

The significance of the report is underlined by the fact that the European Union as a whole has consistently remained the biggest global aid donor, even in times of significant budgetary constraints.

According to latest figures, the European Union’s collective official development assistance (ODA) (by E.U. institutions and member states) has increased to Euro 58.2 billion (up by 2.4 percent from 2013) – growing for the second year in a row, and reaching its highest nominal level to date. Collective European Union ODA represented 0.42 percent of E.U. gross national income (GNI) in 2014.

A 0.7 percent ODA/GNI target was formally recognised in October 1970  when the U.N. General  Assembly adopted a resolution including the goal that “each economically advanced country will progressively increase its official  development  assistance  to  the  developing  countries  and  will  exert  its  best  efforts  to  reach  a minimum net amount of 0.7 percent of its gross national product at market prices by the middle of the decade.”

To date, the target has not been achieved but it has been repeatedly re-endorsed at the highest level at international aid and development conferences.

“We are committed to playing our full part in all aspects of the post-2015 agenda, including means of implementation,” Mimica stressed.

He added: “In our February Communication [on a Global Partnership for Poverty Eradication and Sustainable Development after 2015], the Commission was very clear. We proposed to the Member States a collective E.U. re-commitment to the 0.7 ODA/GNI target – and we hope indeed that there will be agreement amongst Member States on this ahead of Addis.”

Official development assistance will certainly remain important in a post-2015 context – in particular for the least developed countries (LDCs), according to Mimica.

“At the same time, we expect other partners – including other developed economies and emerging actors – to also contribute their fair share. The efforts of the European Union alone will not be enough.”

Aware that this is a rather controversial issue, he added: “To be able to speak of an ambitious outcome in Addis and New York, we will all need to raise our level of ambition. The EU is ready to engage with all partners to achieve this. We have been active and constructive in the negotiations so far, and we will continue to do so, taking a responsible, bridge-building approach.”

Edited by Phil Harris    

Development aid flows were stable in 2014, after hitting an all-time high in 2013, but aid to the poorest countries continued to fall, according to new figures released on Apr. 8 by the OECD Development Assistance Committee (DAC).

Net official development assistance (ODA) from DAC members totalled 135.2 billion dollars, level with a record 135.1 billion dollars in 2013, though marking a 0.5 percent decline in real terms. Net ODA as a share of gross national income (GNI) was 0.29 percent, also on a par with 2013.

However, bilateral aid – which equates to roughly two-thirds of total ODA – to the least developed countries fell by 16 percent in real terms to 25 billion dollars, according to provisional DAC data.“European governments first promised to deliver 0.7 percent of their national income to support poor countries when Richard Nixon was President of America and the Beatles were topping the charts” – Hilary Jeune, Oxfam EU Policy Advisor

The Development Assistance Committee (DAC) is made up mainly of European countries plus the European Union as a member in its own right, United States, Canada, Australia, New Zealand, Japan and South Korea.

Five of the DAC’s 28 member countries – Denmark, Luxembourg, Norway, Sweden and the United Kingdom – continued to exceed the United Nations target of keeping ODA at 0.7 percent of GNI, while 13 countries reported a rise in net ODA, with the biggest increases in Finland, Germany, Sweden and Switzerland.

On the other hand, 15 DAC members reported lower ODA, with the biggest declines in Australia, Canada, France, Japan, Poland, Portugal and Spain.

“ODA remains crucial for the poorest countries and we must reverse the trend of declining aid to the least developed countries. OECD ministers recently committed to provide more development assistance to the countries most in need. Now we must make sure we deliver on that commitment,” said DAC Chair Erik Solheim.

Reacting to the latest DAC figures for Europe, Oxfam said that “the leadership of a handful of countries is masking the failure of the majority of European governments to deliver on their overseas aid promises”, with aid stagnating, leaving millions of poor people at risk

“In times of ballooning challenges for the world’s poorest, it is striking that European overseas aid has stagnated”, said Hilary Jeune, Oxfam’s EU Policy Advisor.

“This picture would be worse if it were not for the leadership of a handful of countries such as the United Kingdom, Sweden, Luxembourg and Denmark, masking the poor performance of the majority. Wealthy countries, such as France and Austria, have failed to uphold their commitments to the world’s most vulnerable people.”

France has cut its aid budget for the fourth year in a row and Spain’s overseas aid spending is at its lowest level since 1989, said Oxfam. Germany and Finland have made some progress but they are still off track on reaching their commitments, while the Netherlands is no longer contributing 0.7 percent of its GNI.

“European governments first promised to deliver 0.7 percent of their national income to support poor countries when Richard Nixon was President of America and the Beatles were topping the charts,” added Jeune.

“In the 45 years since, only a handful of European Union countries have delivered on this promise. Yet with some one billion people still living in poverty and climate change posing huge new development challenges, the need for overseas aid is greater than ever before.”

Oxfam called on the global community to agree ambitious new development goals and a new deal for tackling climate change this year, including at the third International Conference on Financing for Development in Addis Abeba, Ethiopia, in July.

“In Addis, EU Finance Ministers should demonstrate genuine leadership by being the first ones to re-commit to providing 0.7 percent of national income as overseas aid and outline how they will deliver on this promise, including setting a clear timetable.”

Oxfam said that they must also “put new money on the table from their budgets and from new sources like financial transaction taxes and the EU’s Emissions Trading Scheme to help poor countries cope with the devastating impacts of climate change.”

Edited by Phil Harris    

A fairer more cooperative global tax structure is needed to help achieve Post-2015 development goals. Credit: Eoghan OLionnain CC by SA 2.0 License https://creativecommons.org/licenses/by-sa/2.0/.

By Lyndal Rowlands
UNITED NATIONS, Mar 20 2015 (IPS)

Public funds are vitally important to achieving the Sustainable Development Goals (SDGs), making corporate tax avoidance trends a pressing issue for post-2015 Financing for Development discussions.

A draft agenda circulated this week for the Financing for Development (FfD) post-2015 Development Conference to be held in Addis Ababa in July places domestic public finances as a key action agenda item.“This is no longer an issue about developing countries versus rich countries. I think you have to get beyond geography and start thinking about this as a battle between wealthy elites and everybody else.” -- Nicholas Shaxson

The agenda acknowledges the need for greater tax cooperation considering “there are limits to how much governments can individually increase revenues in our interconnected world”.

Over 130 countries, represented by the Group of 77 (G-77), called for greater international tax cooperation to be included on the agenda, in recognition of the increasingly central role of tax systems in development.

These calls come in light of the Luxembourg Leaks and Swiss Leaks, which have revealed in recent months how some of the world’s biggest multinational corporations avoid paying billions of dollars of taxes through deals with ‘tax havens’ in wealthy countries.

Two reports out this week, from Oxfam and the Tax Justice Network, both look at the impacts of corporate tax avoidance on global inequality.

Catherine Olier, Oxfam’s European Union policy advisor, told IPS, “Corporate tax avoidance is actually a very important issue for developing countries because according to the International Monetary Fund, the poor countries are more reliant on corporate tax than rich countries.”

Olier said that considerable funds are needed to make the SDGs possible.

“If we look at what’s currently on the table in terms of Official Development Assistance (‘international aid’) or even leveraging money from the private sector, this is never going to be enough to finance the SDGs,” she said.

“Tax is definitely going to be the most sustainable and the most important source of financing,” Olier said.

Oxfam’s report called on European institutions, especially the European Commission, to “analyse the negative impacts one member state’s tax system can have on other European and developing countries, and provide public recommendations for change.”

Nicholas Shaxson from the Tax Justice Network told IPS that tax havens are predominantly wealthier countries, but that they negatively impact both rich and poor countries.

“This is no longer an issue about developing countries versus rich countries. I think you have to get beyond geography and start thinking about this as a battle between wealthy elites and everybody else,” he said. “That’s where the battle line is, that’s where the dividing line is.”

He added that corporate taxes were particularly important to developing countries, in part because it was more difficult to leverage tax revenue from a poorer constituency.

“In pure justice terms, in terms of a large wealthy multinational extracting natural resources or making profits in a developing country and not paying tax, I think that nearly everyone in the world would agree in their gut that there’s something wrong with that situation,” Shaxson said.

Shaxson is the author of the Tax Justice Network’s (TJN) report: Ten Reasons to Defend the Corporation Tax, published earlier this week.

The report argues that trillions of dollars of public spending is at risk, and that if current trends continue, corporate headline taxes will reach zero in the next two to three decades.

Meanwhile, Oxfam reported in January that the “combined wealth of the richest 1 percent will overtake that of the other 99 percent of people next year [2016] unless the current trend of rising inequality is checked.”

Oxfam is calling for a Ministerial Roundtable to be held at the FfD Conference to help facilitate the establishment of a U.N. inter-governmental body on tax cooperation.

Olier told IPS that while developing countries have expressed support for greater tax cooperation, there has so far been less support from Organisation for Economic Co-operation and Development (OECD) member countries, including European countries and the United States.

Follow Lyndal Rowlands on Twitter @LyndalRowlands

Edited by Kitty Stapp

IPS U.N. Bureau Chief Thalif Deen interviews Secretary-General Ban Ki-moon. Credit: Lyndal Rowlands/IPS

By Thalif Deen
UNITED NATIONS, Nov 11 2014 (IPS)

The continued widespread economic recession – aggravated by the recent Ebola outbreak in West Africa – is threatening to undermine the U.N.’s highly-touted post-2015 development agenda.

Still, Secretary-General Ban Ki-moon is placing his trust and confidence on two key upcoming summit meetings: a G20 gathering of world leaders in Brisbane, Australia later this week, and the International Conference on Financing for Development (ICFD) in Addis Ababa, Ethiopia, next July.

In an interview with IPS, just before his departure to Brisbane, he described the G20 as “the world’s primary global economic forum”, while the ICFD, he predicted, will be “one of the most important conferences in shaping sustainable development goals (SDGs).”

Ban has already cautioned world leaders of the urgent need for “a robust financial mechanism” to implement the proposed SDGs – and such a mechanism, he said, should be put in place long before the adoption of these goals in September 2015.

In a letter to G20 leaders, he says the successful implementation of the growth and sustainable development agendas will depend largely on mobilising “all sources of financing”.

“It is difficult to depend on public funding alone,” he told IPS, stressing the need for financing from multiple sources – including public, private, domestic and international.

The G20, a rare mix of both developed and developing countries, includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom and the United States, plus the European Union.

Overall, the G20 represents about two-thirds of the world’s population, 85 per cent of global gross domestic product and over 75 per cent of global trade.

The G20 president, this time around Australian Prime Minister Tony Abbott, usually invites several guest countries to participate in the summit. The presidency rotates on a geographical basis.

The countries which previously hosted the G20 summit include the United States (in 2008 and 2009), the United Kingdom (2009), Canada (2010), the Republic of Korea (2010), France (2011), Mexico (2012) and Russia (2013).

At the meeting in Brisbane Nov. 15-16, Abbott will welcome Spain as a permanent invitee; Mauritania as the 2014 chair of the African Union; Myanmar as the 2014 chair of the Association of South-East Asian Nations (ASEAN); Senegal, representing the New Partnership for Africa’s Development; New Zealand; and Singapore.

The ICFD, scheduled for July 2015, is billed as a U.N. conference and will be attended by all 193 member states.

Speaking of financing for development, Ban said official development assistance (ODA), from rich nations to poorer ones, “is necessary but not sufficient.”

According to the latest available statistics, only five countries – Norway (1.07 percent), Sweden (1.02), Luxembourg (1.00), Denmark (0.85) and the United Kingdom (0.72) – have reached the longstanding target of 0.7 of gross national income as ODA to the world’s poorer nations.

Meanwhile, the economic recession is taking place amidst the millions still living in hunger (over 800 million), jobless (more than 200 million), water-starved (over 750 million) and in extreme poverty (more than one billion), according to the United Nations.

Asked about a proposal for innovative sources of financing for development – including a tax on foreign exchange transactions – Ban said he has appointed a former French cabinet minister, Philippe Douster-Blazy, as his special adviser to explore these funding sources.

The proposal for innovative financing was approved at the 2002 ICFD in Mexico and it has raised about 2.0 billion dollars so far.

Ban’s most formidable task will be to ensure that rich countries deliver on their pledges, made in 2009, to provide a staggering 100 billion dollars by 2020 for a Green Climate Fund to prevent the most disastrous consequences of climate change.

“I need at least 10 billion dollars to operationalise the fund,” he said. So far, about 2.5 billion dollars have been made available.

Meanwhile, in his letter to the G20 leaders, Ban says new threats, including geopolitical tensions and the Ebola crisis, “have emerged to create further uncertainty” for the U.N.’s development agenda.

“The G20 Brisbane summit is well timed to provide the leadership that will translate into strong global growth and positive change in people’s lives,” he wrote. “Therefore, I urge you and your fellow leaders to seize the moment in Brisbane and set the stage for success in our shared work to build a more sustainable and prosperous world for all.”

The United Nations, he said, “stands ready to partner with you in your endeavour in Brisbane – and beyond.”

But a lingering question remains: how many of the world leaders will respond to the call?

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

By Roberto Savio
ROME, Oct 22 2014 (IPS)

The new European Commission looks more like an experiment in balancing opposite forces than an institution that is run by some kind of governance. It will probably end up being paralysed by internal conflicts, which is the last thing it needs.

During the Commission presided over by José Manuel Barroso (2004-2014), Europe has become more and more marginal in the international arena, bogged down by the internal division between the North and the South of Europe.

Roberto Savio

We are going back to a new Thirty Years’ War – which took place nearly five centuries ago – between Catholics and Protestants. Catholics are considered profligate spenders, and there is a moral approach to economics from the Protestant side.

The Germans, for example, have transformed debt into a financial “sin”.  The large majority of Germans support the stern position of their government that fiscal sacrifice is the only way to salvation, and the looming economic slowdown will only strengthen that feeling. As a result, the handling of Europe’s internal governance crisis has largely pushed Europe to the side lines of the world.

It is a mystery why it is in the interests of Europe to push Russia into a structural alliance with China and, in such a fragile moment, inflict on itself losses of trade and investment with Russia which could reach 40 billion euro next year.“We are going back to a new Thirty Years’ War – which took place nearly five centuries ago – between Catholics and Protestants. Catholics are considered profligate spenders, and there is a moral approach to economics from the Protestant side.”

The latest issue of the prestigious Foreign Affairs magazine – the bible of the U.S. elite – carries a long and detailed article on “Why the Ukraine Crisis is the West’s Fault” by Chicago academic John J. Mearsheimer, who documents how the offer to Ukraine to join the North Atlantic Treaty Organisation (NATO) was the last of a number of hostile steps that pushed Russian President Vladimir Putin to stop a clear process of encroachment.

Mearsheimer wonders how all this was in the long term interests of the United States, beyond some small circles, and why Europe followed. But politics now has only a short-term horizon, and priorities are becoming conditioned by that approach.

A good example is how European states (with the exception of the Nordic states), have been slashing their international cooperation budgets. Not only have Spain, Italy and Portugal – and of course Greece – practically eliminated their official development assistance (ODA) budgets, but France, Belgium and Austria have also been following suit. Meanwhile China has been investing heavily in Africa, Latin America and, of course, Asia where the term ‘cooperation’ would not be the most appropriate.

But the best example of Europe’s inability to be in sync with reality is the last cut in the Erasmus programme, which sends tens of thousands of students every year to another European country. Has it been overlooked that one million babies have been born to couples who met during their Erasmus scholarships, and that this programme is being cut at a moment when anti-Europe parties are sprouting everywhere?

In fact, education – and especially culture (and medical assistance) – are under a continuous reduction in spending. As Giulio Tremonti, Finance Minister under Italian Prime Minister Silvio Berlusconi, famously said, “you don’t eat with culture”.

The per capita budget for culture in southern Europe is now one-seventh that of northern Europe. Italy, which according to UNESCO holds 50 percent of Europe’s cultural heritage, has just decided in its latest budget to open up 100 jobs in the archaeological field with a gross monthly salary of 430 euro. In today’s market, this is half what a maid receives for 20 hours of work a week.

Italian politicians do not say so explicitly, but they believe that there is already such rich heritage that there is no need for further investment and, anyhow, the tourists continue to arrive. The budget for all Italian museums is close to the budget of the New York Metropolitan Museum … in the real world, this is like somebody who wants to live by showing the mummified body of his great grandmother for the price of a ticket!

It can be said that, in a moment of crisis, the budget for culture can be frozen because there are more urgent needs. But no need is more urgent than to keep Europe running in the international competition in order to ensure a future for its citizens. And yet, the budget for research and development, which is essential for staying in the race, is also being cut year by year.

Let us look at the situation since 2009. Spain has reduced investment in R&D by 40 percent, which has led to a 40 percent cut in financing for projects and a 30 percent cut in human resources. Italian universities have witnessed a total cut of 20 percent in spending which has meant a reduction of 80 percent in hiring and 100% in projects, while 40 percent of PhD courses have disappeared.

France has cut hiring in centres of research by 25 percent and in universities by 20 percent. Less than 10 percent of demand for projects receives financing because funds are no longer available.

Greece has cut budget for centres of research and universities by 50 percent since 2011, and has frozen the hiring of any new researchers.

In the same period in Portugal, universities and research centres have suffered a cut of 50 percent, the number of scholarships for PhDs has been cut by 40 percent and post-doctoral courses by 65 percent.

It is important to recall that the Lisbon Strategy, the action programme for jobs and growth adopted in 2000,  aimed to  make the European Union “the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion” by 2010. Not only were most of its objectives not achieved in 2010, but Europe continues to slide backwards. The Lisbon Strategy had set 3 percent of GNP for R&D, but southern Europe is now below 1.5 percent.

A notable exception is the United Kingdom. The current government, which works in strong synchronicity with the City and its industrial constituency, has funded a 6 billion euro “Innovation and Research Strategy for Growth” plan to the applause of the private sector.

China is steadily increasing steadily its R&D budget, which is now 3 percent (what the Lisbon Strategy had set for Europe), but it aims to reach 6 percent of GNP by 2020 and, in just seven years, China has become the largest producer of solar energy, bankrupting several U.S. and European companies.

Is cutting Europe’s future in international competition really in the interests of Germany? Or it is that politics are losing the view of the forest while they discuss how many trees to cut, to reach a compromise between the Catholics and the Protestants?

We are now making of economics a moral science, which makes of Europe an unusual world. (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

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