Aiming high or falling short? A brief analysis of the proposed future EU budget for external action

The European Commission’s proposal for the next EU budget puts forward some ambitious changes – particularly on future funding for external action. What could the implications of these changes be?

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    In May and June 2018, the European Commission presented a package of proposals for the upcoming seven-year budget of the European Union, known as the Multiannual Financial Framework (MFF) 2021-2027. The proposals are ambitious, particularly on future funding for external action (Heading 6). They hold the possibility of considerable change ahead, both in the amounts allocated under the EU budget and in the simplification of the EU financing instruments. At the same time, the political narrative supporting Heading 6 has become increasingly interest-driven. The EU appears focused on its own key strategic priorities – geographically, the European neighbourhood and Africa, and thematically, a strong emphasis on security and migration.

    This briefing note presents a brief quantitative and qualitative analysis of the main proposed changes to the EU budget and their potential implications. It identifies some of the key strategic choices arising from the proposals, and concludes with outstanding questions for the upcoming negotiations.

    To make EU external action more relevant, coherent and responsive, the Commission has made a strong case for increased resources as well as for more flexible and simpler financing. In particular, it seeks to create a new instrument, the Neighbourhood, Development and International Cooperation Instrument (NDICI), and to establish a substantial reserve to allow the EU to respond swiftly to unforeseen circumstances. Within the proposed NDICI, preference would be given to regional approaches over global thematic ones. These proposals are productive and welcome, but they raise a number of questions, particularly regarding the distribution of resources for specific geographic and thematic priorities.

    While the overall mandate for EU external action is expanding and most issues confronting the international community, including the EU, require multidimensional responses, concerns have also arisen about the weighting of different types of priorities – not least, development, peace, the EU neighbourhood and security – within a single instrument. Ambiguity continues to surround the implementation, governance and accountability of the NDICI, and particularly of the proposed reserve. For the NDICI to have any chance to succeed, it will need to balance appropriate oversight with a guarantee of sufficient flexibility while also preserving predictability.

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