EU to take the lead in financing for development

The European parliament has managed to send a powerful message to the commission and member states requesting the EU to take the lead in financing for development in the ongoing sustainable development goals negotiations and ahead of Addis Ababa conference.

In the plenary this week, MEPs urged the EU and the member states to re-commit without delay to the 0.7 per cent of GNI target for ODA – directing half of it to the least developed countries. Disappointing was the fact that that the budgetary constraints were allowed to be taken into account while moving towards the 0.7 target by 2020. This reservation ignores the function of ODA as a global tax for the common good.

I would have also wanted to see parliament making stronger demands for a framework on the growing importance of private sector financing. What did not get due attention in the report, was the need to establish proper human rights safeguards in climate financing. MEPs did, however, called for the establishment of a legally binding framework on the accountability of companies.

Parliament also demanded new and additional climate financing, debt restructuring, the removal of harmful subsidies, participation of civil society organisations in negotiations, and the need for sustainable criteria for combining EU grants with loans from public and private financiers.

Domestic resource mobilisation was considered a key source of financing due to being more predictable and sustainable than foreign assistance. The EU should use all its instruments to combat tax evasion and support tax administrations in developing countries. To that end, MEPs called for establishment of an intergovernmental body on tax matters under the auspices of the UN. The commission, however, declared its scepticism towards such an idea. Some convincing will therefore be needed.

Published in Parliament Magazine 21.5.2015