Water Diplomacy

EU budget for recovery: boosting funds for a stronger Europe in the world

02/06/2020 - 14:02
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“The coronavirus crisis has dramatically changed the world as we know it and pre-crisis challenges have not disappeared but become even more complex. We will only be able to address this situation effectively and mitigate its consequences if we work together and cooperate globally, with our partners. This needs to be underpinned by an ambitious external budget, positioning the EU as leading geopolitical actor at the world stage. The Commission’s proposed €118.2 billion for external action will allow us to deliver on this commitment.” – EU High Representative, Josep Borrell.

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The European Commission put forward its proposal for a major recovery plan to deal with the aftermath of the coronavirus crisis, with a significant increase in funding for external action. A total of €118.2 billion is proposed for external action for the period 2021-2027, with an additional €15.5 billion (plus €1 billion already from this year) to support its partners in recovery efforts in the wake of COVID-19 pandemic, in line with the European Union’s role of a strong global actor.

In his address to the press on 2 June, the High Representative explained that the modern, innovative and revamped long-term EU budget, boosted by the new emergency European Recovery Instrument, “Next Generation EU”, provides an ambitious answer to the challenges the EU is facing internal and externally.

The increased budget will reinforce the EU's capacity to support partners – in particular in the Western Balkans, the EU's wider Neighbourhood and Sub-Saharan Africa – in their efforts to fight and recover from the impact of the COVID-19 pandemic, in cooperation with partners such as international financial institutions, the United Nations and the World Health Organization.

Extra €16.5 billion for external action

The new proposal introduces a €16.5 billion top-up through these main changes:

  • The humanitarian aid budget is increased with €5 billion, by more than 50% compared to the May 2018 proposal, to respond to the humanitarian crisis expected as a result of the coronavirus. In countries, for example, in which informal economy plays an important role, issues such as food security and primary health care needs will become important issues.
  • Reinforce the capacity of the External Action Guarantee through the €10.5 billion top up to fight the negative consequences of COVID-19. It will make it possible to cover the risks of public and private investments in partner countries up to a maximum volume €130 billion, almost doubling the initial €60 billion foreseen.. This guarantee will be used to mobilise more than half a trillion euro in investments to foster sustainable and inclusive economic development. Public and private investments will support partner countries to “build back better and greener” by promoting decent job creation, strengthening public and private infrastructure, fostering renewable energy and sustainable agriculture and digital economy.
  • Another €1 billion foreseen for the European Fund for Sustainable Development (EFSD) from the current EU budget for an immediate response to the crisis.

An ambitious and innovative structure

In 2018, the Commission made an important and innovative proposal to simplify and streamline most of its external financing. The Neighbourhood, Development and International Cooperation Instrument, (NDICI) merges 10 existing external financing instruments. The European Development Fund is integrated in the budget. These proposals remain untouched and are even more relevant today.

There is also a proposal for a European Peace Facility to enhance the Union's ability to preserve peace, prevent conflicts and strengthen international security, an off-budget fund, worth € 8 billion, to finance external actions of a military or defence nature that are not funded under the Union's budget.

Through these proposals, the EU High Representative says “the European Union is showing that international responsibility and solidarity is at the heart of our response. It also shows our determination to continue promoting our interests and values throughout the world.”

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