JOINT COMMITTEE ON FOREIGN AFFAIRS AND TRADE debate -
Wednesday, 9 May 2012

EU External Action Programme and European Development Fund: Discussion

Chairman

We are now in public session. I would remind members of the joint committee and those in the public Gallery to ensure that their mobile phones are switched off completely for the duration of the meeting as they do cause interference, even on silent mode, with the recording equipment in the committee rooms.

Item No. 1 on the agenda concerns the minutes of the meeting of 25 April 2012. The draft minutes of that meeting have been circulated to all members. Are the minutes agreed? Agreed.

If there is no other business arising from the minutes, we will proceed with the main business of today's meeting, which is a discussion with officials of the Department of Foreign Affairs and Trade on financing the EU external action programme and the European Development Fund.

I wish to apologise to our witnesses who have been waiting outside for some time. We had a lot of correspondence to go through and members had some questions arising from that. I therefore apologise for the delay.

I am pleased to welcome the following officials from the Department of Foreign Affairs and Trade: Ms Anne Barrington, director general, Europe division; Mr. Michael Gaffey, deputy director general, development co-operation division; and Mr. Colin Wrafter, director, human rights unit, political division. We also have some other departmental officials with us. I thank them for attending the committee and helping us in our consideration of these important EU proposals.

Before inviting Ms Barrington to make her presentation, I wish to advise the witnesses that they are protected by absolute privilege in respect of utterances at this committee. However, if they are directed by the committee to cease making remarks on a particular matter and continue to do so, they will be entitled thereafter only to qualified privilege in respect of their remarks. They are directed that only comments and evidence relating to the subject matter of this meeting are to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a Member of either House of the Oireachtas, a person outside the House or an official by name or in such a way as to make him or her identifiable.

Today the committee is discussing the EU's expenditure plans for the EU external action programme for the period 2014-20. It is proposed that approximately €100 billion will be spent, which is about 10% of the proposed EU budget for that period. There are some concerns among member states about the size of the overall EU budget. Some countries are saying that it is too high and needs to be reduced.

In these times of economic hardship, there are also some concerns about expenditure on countries outside Europe when times are so hard for many European citizens. At the same time, it is vital that the EU remains actively engaged in influencing the world around us, not just for the sake of the people in those countries but also because it happens outside the EU's borders and affects the prosperity and security of EU citizens.

The external action programme is made up of a number of proposals from a wide range of different areas, including: helping pre-accession and candidate countries, and our near neighbouring countries to the east and south; developing relations with third countries and addressing common challenges of global concern; assisting developing countries; seeking to continue to promote democracy and human rights; and providing for a response to crisis situations.

I will now invite Ms Barrington and her colleagues to address the committee on these proposals. They are all very welcome to the committee.

Ms Anne Barrington

Thank you very much, Mr. Chairman, for the opportunity to speak to the joint committee about the multi-annual financial framework, or MFF, and heading 4 of the MFF, which is entitled Global Europe, and deals with the external action instruments of the EU.

I will begin by giving an overview of the MFF process, including a snapshot of where we are now, the work envisaged under the Cypriot Presidency, and a best guess at what might fall to our own Presidency.

I will also speak about some of the external action instruments under consideration. I will then hand over to my colleague, Mr. Colin Wrafter, to speak about the instrument for stability and the human rights instrument. Finally, my colleague, Mr. Michael Gaffey, will elaborate on the proposals for the development instruments under and outside the MFF.

The MFF process involves three main partners - the Commission, the Council and the European Parliament – and is broken down into three main stages. The first stage is the proposal by the European Commission for a budget for the next multi-annual financial period of 2014-20. The Commission published its broad proposals on 29 June 2011. This communication, entitled A Budget for Europe 2020, proposed five main budget headings, the fourth of which, Global Europe, is focused on the EU's external action instruments.

The total budget proposed by the Commission is €1,025 billion for the MFF, with an additional €58 billion outside the MFF. The vast bulk of this is proposed for headings 1 and 2, essentially CAP and cohesion, respectively.

The budget communication was followed by specific proposals for a number of financing instruments, through which the budget will be spent. In the case of heading 4, the Commission published proposals for ten instruments on 7 December 2011.

The second stage is consideration of all these proposals by the Council with a view to agreeing a Council position. Responsibility for considering and agreeing on the overall MFF package lies with the General Affairs Council, with a final agreement being endorsed by the European Council.

Last December, the European Council called for the Danish Presidency to aim to develop a basis for the final stages of negotiations, to be discussed at the European Council in June 2012. The Commission has emphasised the need to have the MFF agreed by the end of this year so as to allow them sufficient time to begin programming for 2014.

Assuming that the Danish Presidency succeeds in its aim of having agreement on the proposals at the June European Council, this will allow us to proceed to the third or final stage of the process, which is negotiation with the European Parliament. The Cypriot Presidency will bring this forward. The key red-line issues in finalising a deal are likely to be on the overall size of the budget, the relative share of the CAP and cohesion, and the rebate arrangements.

At the present moment we are working with partners to reach a common Council position on the Commission's proposals which would then be presented to the Parliament as the Council's negotiating position. However, I should point out that agreement on the figures to be allocated to each of the headings will not be agreed until the very end of the process. For the moment, we are seeking agreement on how the money will be spent, not on how much of it there will be to spend.

The Cypriots are already preparing to take over the next stage of the process and I have confidence they will do everything in their power to finalise the negotiations with Parliament before the end of the year. However, these negotiations are complex and have to traverse a number of stages. It may be the case that the completion of the negotiations with the European Parliament and the finalisation of the MFF will fall to the Irish Presidency. We are preparing for that eventuality.

In addition to the negotiations on the overall MFF package, its principles and parameters, discussions are ongoing on the individual headings and the instruments that make them up. As regards external action, the Lisbon treaty saw an enhanced role for the EU on the international stage with the creation of the European External Action Service, the aim of which is to have the EU speak with one voice and so ensure that our influence is commensurate with our external action funding and our geo-political position, which has not always been the case. In so doing, the Commission has made a case for an increase in funding for heading 4 from €56 billion, in 2011 prices, to €70 billion - an increase of 20%. This figure accounts for around 6% of the proposed multi-annual financial framework, MFF, package. There is a further €32.7 billion of outside MFF expenditure for the European development fund and the emergency aid reserve.

In its proposals for funding, the Commission has focused its actions in support of the EU's guiding principles of democracy, the rule of law, human rights and fundamental freedoms, human dignity, equality and solidarity, and respect for the principles of the United Nations Charter and international law. This has always been the focus of the funding under this heading so it is not surprising the structure and instruments of heading 4 are broadly similar to the current MFF, although they have been adapted to a changing world and a changing EU.

Before addressing the individual instruments, I would like to say a few words on the amounts of funding proposed under the MFF. The funds in the MFF package are not under negotiation at present and will not be agreed until the end of the process. All the signs are, however, that there will be strong pressure to reduce the overall MFF package by as much as 10%. In this case we can expect to see a reduction in the amount allocated for external action. In such a scenario, decisions may have to be made on which instruments Ireland wants to see protected, and which we are willing to see cut. These are not easy decisions as there are merits in all the instruments and all contribute to the overall goals of the EU and of Ireland's foreign policy.

The main tenet of our foreign policy is our commitment to peace, justice, human rights and fairness in international relations. These are all goals that are promoted through the external action instruments. We also have to consider both our development policy, which prioritises poverty reduction, and the potential that some of the instruments have to leverage for improved trade opportunities for Irish businesses. These are all matters which are still under consideration and we would welcome hearing the committee's views as the process moves towards its conclusion.

Moving on to the individual instruments that make up the heading 4 package, the first proposed is a common implementing regulation. This is a new and welcome departure. The EU has often, and rightly, been criticised for the complexity of its administrative process that discourages eligible applicants from applying for funding. The common implementing regulation aims to have one set of rules for seven of the external action instruments, thus simplifying its spending programmes to reduce the administrative burden and costs for their beneficiaries and for all actors involved.

The instrument for pre-accession assistance, or IPA, serves to underpin the EU's commitment to enlargement. Its main objectives are to help candidate and prospective candidate countries meet the Copenhagen criteria through support for political, economic and social reforms. In this way the funding will help to strengthen the ability of beneficiary countries to fulfil the obligations stemming from membership. The funding provided tries to mirror the Structural Fund, the Cohesion Fund and the European agricultural fund for rural development and thus it also give candidates some experience of managing these types of funds.

Some of the key changes proposed from the current instrument include the introduction of multi-annual budgeting and the adoption of comprehensive country strategies to better match funding with needs and priorities. This would also see a move towards financing programmes rather than individual projects. The proposals also include a performance reserve to allow a so-called more for more strategy to be pursued where performance warrants this.

The European neighbourhood instrument will be the channel through which the bulk of EU assistance to neighbouring countries will be provided. It will support the European neighbourhood policy and bilateral partnerships with countries to the east and south of the EU. The new instrument will take account of a number of major developments since the launch of the ENP. These include the adoption of a new ENP vision in June 2011 which calls for greater support for partners committed to building democratic societies and undertaking reforms in line with a more for more principle. This will allow for more funding to be allocated to those countries making greatest progress on reform. The regulation also seeks to recognise the new status of the EU's relationship with Russia, which is now a strategic partner. Co-operation will continue under the new regulation in the area of cross-border co-operation and multi-country programmes, with Russia co-financing projects along its border with the EU.

The new partnership instrument aims to advance and promote the EU's values and interests abroad and to give the Europe 2020 strategy a global dimension. It will allow the EU to respond in an effective and flexible manner to opportunities arising from our relations with partner countries and to address collectively global challenges such as climate change, energy security and the environment. Although there will be a focus on strategic partners and emerging economies, the instrument will be global in reach. It also aims to help European companies by improving market access and developing trade and investment opportunities by means of economic partnerships and business and regulatory co-operation.

The last two instruments I will mention are the nuclear safety instrument, for which the Department of the Environment, Community and Local Government takes the lead, and the Greenland instrument. The nuclear safety instrument can be used for all third countries but prioritises pre-accession and neighbourhood countries in particular. It aims to promote a nuclear safety culture, including safe management of spent fuel and radioactive waste. The Greenland instrument is a new instrument, introduced now as a result of the changing nature of the EU's relationship with Greenland. This instrument proposes a revised partnership between the EU and Greenland that would take into account the geostrategic importance of Greenland in the context of global issues such as climate change and natural resources.

I will now hand over to my colleague Colin Wrafter.

Mr. Colin Wrafter

In my remarks I propose to focus, first, on the instrument for stability and, second, on the European instrument for democracy and human rights, EIDHR. The instrument for stability is one of the smaller instruments proposed under the MFF, representing less than 4% of the overall budget. The proposed instrument will replace the current instrument for stability which was established in 2007 with the objective of enabling the Union to provide a consistent and integrated response to crisis and emerging crisis situations, and to address specific transregional security threats.

The instrument for stability represents a flexible tool that enables the EU to respond in a timely manner to crisis situations as they emerge. Projects currently being funded under the stability instrument include support for security and stabilisation in Niger-Mali and for the holding of presidential elections in Guinea Bissau. Proposed projects include support for the UN supervision assistance mission in Syria, UNSMIS, and funding for capacity building for conflict-crisis prevention in Bolivia.

In addressing the root causes of crises, the instrument for stability helps to create the conditions for the EU's longer-term humanitarian and co-operation instruments to work. The instrument for stability is not subject to ODA eligibility criteria and as such allows the EU to fund areas that are excluded from ODA funding, for example, in the area of counter-terrorism. The instrument for stability can address problems that are global or transregional in nature, such as the fight against terrorism, the proliferation of weapons of mass destruction and the prevention of illicit trafficking, which would exceed the scope of a geographic instrument.

Overall, the new instrument for stability will build on the opportunities presented for advancing a co-ordinated EU response to international crises beyond humanitarian assistance, in support of the EU common foreign and security policy. It will also enable the EU to respond to new threats such as the increasing challenge represented by climate change.

The European Commission has proposed an allocation of €2.5 billion for the period 2014 to 2020. This compares with €1.8 billion under the current financial framework period. The increase reflects the increasing range and spread of EU external action in line with the development of the CFSP in recent years and the establishment of the European external action service.

Turning to the EIDHR, due to the importance of the promotion of democracy and human rights in EU external action, the EIDHR was established as a separate financial instrument in 2007. It is dedicated to the task of building and sustaining a culture of human rights and democracy in non-EU countries. The EIDHR is designed to complement the various other tools for the implementation of EU policies in the areas of human rights and democracy, including both geographic and thematic programmes, as well as political dialogue, diplomatic initiatives and other instruments for financial and technical co-operation, including the development co-operation instrument and the European neighbourhood partnership instrument.

Most projects under the EIDHR are co-funded except for EU election observation actions and a small number of other projects. Partnership with local actors on the ground and a bottom-up approach are core tenets of the instrument's philosophy that civil society can become an effective force for political reform and defence of human rights. The EIDHR's flexibility enables the EU to respond to changing circumstances and to support innovation in a manner not feasible through the long-term nature of geographic programmes. The instrument can grant aid where no established development co-operation exists and can intervene without the agreement of the governments of third countries. As a result, the instrument has generated genuine results and numerous success stories, including more than 130 election observation missions since 1993. It has also been useful in the following ways: protecting women against domestic violence through training, law reform, assistance and dialogue in Mexico; promoting the work of women human rights defenders in Nepal through capacity building and training on security and protection of human rights defenders; and funding support to Front Line Defenders to provide a proactive and supportive engagement with human rights defenders in 132 countries. Representatives from Front Line Defenders attended a meeting of this committee on 15 February last.

Recent developments, in particular the Arab spring, have shown there is a strong demand for increased freedoms and democracy. The European Union must support endeavours in this regard in order to prevent human rights violations. After the current regulation expires, there will still be work to do in building and sustaining a culture of human rights and making democracy work, particularly in emerging democracies. In recent years the EU's agenda on democracy support has constantly evolved and has grown towards a comprehensive approach. In line with this, the new proposed instrument considers democracy as a process, taking into account the full democratic cycle. While preserving the key features of the current regulation, the new regulation is intended to have a clearer strategic focus on the most difficult countries. Its objectives and scope will be updated, taking into account developments since 2007, to include, for example, issues such as Internet freedom and the promotion of freedom of thought.

The European Instrument for Democracy and Human Rights budget for 2007-2013 is €1.104 billion, or approximately €157 million annually, including election observation. The Commission proposes to allocate €1.578 billion for the implementation of the regulation for the period 2014-2020. On that basis, the Irish contribution to the EIDHR would amount to €18,462,600 at current prices over the period 2014-2020.

Chairman

Thank you, Mr. Wrafter. I now invite Mr. Michael Gaffey to give his opening statement.

Mr. Michael Gaffey

I thank the committee for the opportunity to make a presentation on this issue. Over the next three years, the international community faces the challenge of maximising progress on the millennium development goals adopted in 2000 and agreeing a new framework for international development post-2015, the target date for implementation of the development goals. Ireland will play its part in this, both directly and as a member state of the European Union. The EU, comprising the Commission and member states, provides more than half of global official development assistance to developing countries, amounting to some €53 billion in 2011, including Ireland's contribution of €650 million. This highlights the significance of the proposed funding for external relations under heading 4 of the EU's multi-annual financial framework. I intend to outline the proposals under consideration for funding of the major development-related instruments. These are the development co-operation instrument and the instrument for humanitarian aid, both funded within heading 4, and the European Development Fund which is funded through assessed contributions by member states. I will mention figures as I go along, with the caveat given by Ms Barrington that all such figures are subject to negotiation at the end of the process. It will be useful for the committee to hear the amounts being discussed.

It is important to consider these proposals in the context of ongoing discussions on the future of EU development policy. The fundamental objectives and priorities of the European Union are set out in the 2005 European consensus on development which underlines the Union's willingness to make a decisive contribution to the eradication of global poverty and to building a more peaceful and equitable world. This commitment sent a powerful signal to our partners in the developing world that the EU is ready to take a lead in the fight against global poverty and hunger, and underlined that development remains a crucial dimension of the Union's global engagement. The environment for development has changed quite significantly since 2005, with progress on some millennium development goals but not others, the emergence of strong middle-income countries, shifts in the geography of poverty, and high rates of economic growth in some African countries. However, the crisis of poverty, inequality and hunger remains while, at the same time, development budgets across the developed world have come under serious pressure. The continuing EU commitment to tackling poverty reflects the view the Government has taken on Ireland's aid programme at a time of difficulty at home, namely, that it is the right approach to take because it reflects our values and because it is in our interests in an increasingly connected world. The same argument applies for the European Union engagement.

Last year the Commission initiated a public consultation on the future of EU development policy. Next week in Brussels, development Ministers will consider Council conclusions on Increasing the Impact of EU Development Policy: An Agenda for Change.Ireland will be represented at that meeting by the Minister of State at the Department of Foreign Affairs and Trade, Deputy Joe Costello. A key proposal is that the EU should sharpen the sectoral and geographic focus of its aid programmes as a means of increasing the impact of the aid managed by the Commission. The aim would be to concentrate aid more effectively on the areas where the EU can make the greatest difference and to ensure aid resources are allocated among partner countries on the basis of needs, capacities, interests and commitments. Ireland has articulated support for this differentiated type of approach, with a thematic focus on the millennium development goals on which progress has been slowest and a geographic focus on sub-Saharan Africa, the latter being already the geographic focus of this State's aid programme.

It is against this background that the Commission has proposed to increase funding for development under the 2014-2020 multi-annual financial framework to the development instruments funded from the EU budget and to the European Development Fund. The development co-operation instrument is the largest development instrument funded from heading 4. It funds geographic programmes in developing countries in Latin America and Asia and thematic programmes benefiting all developing countries. The multi-annual financial framework proposals envisage an increase in funding for the development co-operation instrument from the €16.9 billion allocated under the current seven-year cycle to €23.297 billion for the next cycle. Ireland has expressed support for the proposal to increase funding for the development co-operation instrument. The promotion of democracy, respect for human rights, fundamental freedoms and the rule of law are key principles underpinning the implementation of the instrument. The development co-operation instrument's thematic programmes have a strong focus on food and nutrition security, a priority of Ireland's development co-operation programme.

The European Development Fund is the main instrument for EU aid for development co-operation with the African, Caribbean and Pacific, ACP, states. It is managed by the European Commission on behalf of the member states. The fund is outside the general EU budget and is funded through direct contributions by member states which are agreed in intergovernmental negotiations. Ireland's engagement with and oversight of the European Development Fund is managed through our membership of the European Development Fund member state management committee. We take a particular interest in the work undertaken in the priority countries for Ireland's aid programme, examining all proposals for funding in close consultation with our missions in those countries. Ireland has supported the Commission's proposal to increase funding for the European Development Fund under the multi-annual financial framework for 2014-2020. This is the primary funding instrument for sub-Saharan Africa, has a strong focus on poverty eradication and has made an important contribution to the progress achieved on the millennium development goals. In independent reviews, it has been rated as the most effective of the EU development instruments. Ireland also supports the European Commission's proposal that the European Development Fund should remain outside the EU budget at this time.

In addition to this focus on long-term development, the European Union is the world's largest donor of humanitarian aid, providing more than 50% of humanitarian aid worldwide, and is currently playing a central role in response to emergencies in the Horn of Africa and the Sahel. In this context, Ireland has been supportive of the Commission proposal to increase funding under the financial framework for the instrument for humanitarian aid, which covers not only short-term relief but also disaster prevention and reconstruction operations. In conclusion, given the strong role of the EU in global development and the evolution of Union development policy to take account of global changes and challenges, it is important that the funding instruments for development under the next multi-annual financial framework are sufficiently financed to ensure the effective delivery of the EU's development programmes and the credibility of its voice as we look to the post-millennium development goal framework for international development, to be finalised at a major United Nations summit in September 2015.

Chairman

I thank all of the delegates for their contributions.

Deputy Pádraig Mac Lochlainn

I welcome the witnesses. The increase in the external action budget under heading 4 of the multi-annual financial framework is to be welcomed, particularly the significant increase for the development co-operation instrument. I hope the Government will offer strong support for this Commission proposal.

I wish to make a couple of points. While the proposal to focus on the poorest countries is fair enough on first reading, there is concern that we would not be seen to walk away from the middle income countries as considerable challenges and legacy issues remain to be fulfilled there. I seek the witnesses' feedback on this point and how this will be continued. On the space for civil society, there is growing concern that civil society is being squeezed across a number of partner countries and this is of concern, particularly in the realms of human and civil rights and so on in such countries. I seek the witnesses' thoughts on how the European Union can continue that dialogue. Members of this joint committee raised this point when they visited Ethiopia and had an extensive discussion. At that time, the Ethiopian Prime Minister, Meles Zenawi, made the point that it was fine for external countries' agencies to seek to fund development associations but civil society is about citizens' rights and should be funded predominantly by citizens. The Government there has imposed a limit of no more than 10% funding from external countries. While one can understand this action to a certain extent, I am worried that in that country in particular, in which there are significant issues with opposition and there are very few opposition MPs, there really must be a strong civil society resource and must be some way of providing reassurance. I have great respect for much of what has been achieved in Ethiopia and have seen it with my own eyes. However, there must be some way to square the circle whereby human and civil rights can be protected in a demonstrable way in Ethiopia and many other countries, while at the same time protecting civil society and its right to challenge and question government, which is healthy and should be welcomed by any good leader. I seek the witnesses' thoughts on in this regard. On the issue of climate change and climate finance, I seek clarity on whether new and additional funding is envisaged. This needs to be mentioned and defined in the regulation.

Deputy Bernard J. Durkan

I thank the witnesses for their attendance and compliment them on their comprehensive presentation. Particularly in the present times of economic and fiscal constraints, it is important for everyone to recognise one has obligations in a civilised world, regardless of whether one likes it, even though serious competing demands exist. The points that have been emphasised previously and that were outlined today are important. First, one should have good value for money, spending should be strategic and should target those for whom it was intended. Second, there should be accountability and an impact of a positive nature. This criterion already has been adhered to significantly in the past and must be continued in the future in view of the expenditure and targeting in respect of the European Union's neighbourhood policy and the African countries and should not be restricted to those areas alone. In particular, I emphasise the importance of the European Union's continuing ability to show the rest of the worldwide community that serious issues must be attended to such as human rights, the alleviation of starvation, war, famine relief etc. This must continue and notwithstanding the condition in which some of the economies within the European Union may find themselves, other issues remain to be dealt with. Otherwise, all one tends to do is to withdraw into oneself, which, as history shows, is not the right road to take. Consequently, I compliment the witnesses on their presentation.

As has happened in the past, there is nothing to beat good scrutiny and robust examination of spending proposals and this is what is happening. The target is being examined first, which is the correct way to do it, and the spending will come afterwards. Obviously, there should be strategic expenditure designed to have the maximum positive impact at the present time. This would protect the concepts of international aid, European influence and value for money. As I have stated many times previously, having raised countless parliamentary questions over several years on this issue, the integrity of whatever one does at whatever level must be tested repeatedly to ensure one can stand over everything one says and does. Moreover, as there always will be people worldwide who will try to avail of every opportunity to abuse every system - and have done so in the past - it is hugely important to proof ourselves against any such incidence of abuse to the best of our ability.

My final point concerns a major issue that has arisen in Europe, namely, what Europe stands for and what it means, both to Europeans and to the wider community outside. The forthcoming Irish Presidency in the near future has a major role to play in this regard. It is the kind of role that has not been played by a Presidency for a long time and has not been played by an Irish Presidency in the past. It is important to recognise the responsibility that falls on Ireland in this forthcoming event, particularly from the perspective of the smaller countries within the European Union. I refer to the ability of a small country to be able to account for itself in a demonstrable way that is effective, efficient and is targeted both in a particular way and on a particular area and which does not in future leave it to the larger countries of the European Union to dominate European policies, either at home or abroad. There is a particular need for recognition of the European Union's contribution to international aid and human rights to be continued. Moreover, this must be illustrated and exemplified in a much more meaningful way than the Union has received recognition for in the past.

Deputy Eric Byrne

As a newly elected member of this joint committee and having served most of my political life at local government level, I acknowledge that matters European usually were left to MEPs and high-ranking ministerial grades. Having read this briefing document, I confess it has for the first time in my own mind clarified the fantastic structure that is the European Union. It makes me immensely proud, on an individual and a collective basis, to be a part of a Union that is doing such incredible work both internally within the Union and externally, as well as on the periphery of Union membership. Until I read the briefing notes, the extent to which we provide aid and assistance to developing countries and the extent to which we provide aid to countries in emergency and crisis situations had not dawned on me. The same is true in respect of the degree to which we are conscious of pushing the European philosophy of fairness, human rights issues and the right to economic development and growth. In fact, for the first time it really explores how, as Europeans we are extending to the world what I would argue is an important model of how society and the world should develop around the key instruments listed here. I had occasion, through Dublin City Council, to come across the European neighbourhood instrument and people engaged at that level, including guys I had never met before from Armenia, Azerbaijan, Belarus and so on. It certainly opens one's mind to the fact that Ireland is a small nation of approximately 4.5 million people. While we keep talking about hitting above our weight, when one looks beyond our tiny island and considers the huge size of the world and the contrasting political structures therein, it reinforces one's belief that Europe and Ireland's contribution to it is of immense importance. I note the delegates' position on the Arab spring, developments in that regard and the need to assist as best we can civil society in the changing world of the Arab nations.

As a determined "Yes" campaigner in the fiscal treaty debate, it is important we recognise that there are eurosceptics in society who seek to undermine our approach. There is a nationalistic position evolving that we should be a stand-alone nation, that we are losing our Celtic Irish misty beliefs to a big and ugly European Union. I hope the people enthusiastically support the "Yes" campaign in order that we can join others throughout the European Union in further extending the hand of friendship to emerging democracies.

While I am somewhat familiar with the OSCE and the ODIHR, I am slightly confused about the EIDHR, about which I have heard for the first time today. The OSCE is engaged in a range of activities, including election monitoring. The EIDHR appears to be engaged in the same type of work as the OSCE through its structures with the ODIHR. Are the Office for Democratic Institutions on Human Rights, ODIHR, and the European Instrument for Democracy in Human Rights, EIDHR, doing the same job at different levels? I thank the delegates for their introduction to these very interesting sets of proposals.

Deputy Maureen O’Sullivan

There is so much information in the presentations that I do not know where to begin. The delegates referred to 12 groups acting in this area, including the DCI, the ODIHR, Emergency Aid Reserve and so on. What percentage of the budget is spent on bureaucracy in dealing with all of these agencies and who is directing in this area? I welcome the delegates' comments on spending on climate measures. Where do population issues come in? Who deals with that aspect? Also, where do mental health and disability issues come in?

I am not as pro-European Union as others are. It was stated, in the context of the European External Action Service, that the Union would speak with one voice, which rings alarm bells for me. There are countries within the wider European Union which are not to the fore when it comes to human rights and I do not want such countries speaking for me on issues on which they fall short.

The dilemma in respect of the balance between trade and development policies was mentioned. I was alarmed when I heard that the foreign affairs and trade policies were to be joined. Our focus must be on human rights, in respect of which Ireland has always been to the fore.

Having visited countries wherein Irish Aid is prominent I am aware of what its funding is being spent on and what it is doing. However, if I were asked what any of the 12 organisations referred to today does, I would not know the answer. If, rather than contributing to all of these EU agencies, Ireland was to give more money to Irish Aid, would we make more progress in implementation of the millennium development goals?

Ms Anne Barrington

I thank members for their questions. I will answer as many of them as I can, following which Mr. Gaffey will answer the remainder.

On the middle incomes issue, the funding instruments are used in countries such as those in the western Balkans which are emerging from conflict and have a European perspective. The money is used to assist them in getting to the point where they can apply to join the European Union or become engaged in the membership process.

I will try to answer Deputy Bernard Durkan's question on how we ensure the funding is spent correctly. There are robust measures in place to ensure the financial interests of the European Union are protected. The Commission guards against fraud and misappropriation through the application of preventive measures, effective checks and, where irregularities are detected, recovery of the amounts wrongly paid and, where appropriate, the imposition of effective, proportionate and deterrent penalties. The Commission or its representatives and the Court of Auditors have the power to conduct audits of all grant beneficiaries, contractors and subcontractors who have received Union funds under any programme. In addition, the European Anti-Fraud Office is empowered to carry out on-the-spot checks and inspections of economic operators concerned directly or indirectly with EU funding. There are measures in place in this regard. Mr. Gaffey will speak about more specific areas in terms of development in which robust measures are also in place.

Deputy Eric Byrne is correct that our Presidency of the European Union will provide us with great opportunities. We will be taking those opportunities in respect of the internal and external agendas of the Union and are very much looking forward to doing so.

Mr. Michael Gaffey

Deputy Pádraig Mac Lochlainn made some important points on the concerns about middle income countries. Ireland has been very supportive of the proposal to focus our aid strategically on the poorest countries, particularly in sub-Saharan Africa, where the issue of extreme poverty needs to be addressed. I mentioned that 50% of the people living in extreme poverty were living in urban centres in middle income countries. We do not want them to be excluded because of overall GDP growth rates. The current EU proposals relate to countries, including Brazil, China and India, that can generate enough resources to ensure their own development but which have pockets of extreme poverty and inequality. These countries will no longer receive bilateral grant aid but will benefit from new forms of partnership, including thematic and regional funding under the development co-operation instrument. This is to be complemented by innovative co-operation methods such as the blending of grants and loans. The plan is to match the modality of aid with their higher status, while recognising the inequalities and poverty experienced.

Under the development co-operation instrument, discussions have been under way at official level on whether middle income countries such as South Africa and, perhaps, Vietnam should be excluded. Ireland has taken the position that at this stage South Africa should still be included because of the nature of poverty experienced therein. The overall figures do not reflect the reality of poverty distribution. For instance, while Ireland's programme in South Africa is being maintained, we are looking at changing its focus to assess where it might be most effective. While we are conscious of the need to focus, we recognise where poverty is experienced in the world today.

The role of civil society is important; it is an issue which is raised regularly whenever Ministers, Members or officials visit Africa. There has been a worrying trend in some countries in this regard - Ethiopia being a case in point. In Ethiopia, Ireland is working in co-operation with the European Union, but it is specifically interesting in Ethiopia because Ireland is taking the lead role in the funding arrangement to help build the capacity of civil society. We have been able to do so because of our good relationship with the Ethiopian authorities, even in the context of their taking action. By building trust and working in an open fashion with no hidden agendas on aid, we can speak clearly on the rights of civil society.

There is a clear focus in the development co-operation instrument on building civil society in our partner countries. Sometimes it is difficult to dialogue with Governments, but it is one on which the European Union must maintain a strong line in order to really focus on building the capacity of civil society organisations in developing countries.

The committee was concerned also about the situation in Malawi. There were some hopeful developments there in recent times under the new President, but we will see how that goes. It looks like there may be some improvement in the situation in Malawi.

Climate change is also an important point. The development co-operation instrument is also the one that focuses on global challenges and themes. Within that, there is increased funding. The largest single element of that increased funding is for environment and climate change - approximately 32% of the global challenges section. The issue of climate finance commitments under the UNFCCC is still subject to negotiation as to the amounts that must be paid and how new and additional finance will be reached. Climate change is certainly recognised as one of the important areas for which increased funding will be required.

Deputy Maureen O'Sullivan raised population issues. We have had consultations on the White Paper also in our partner countries. I was in Uganda last week where the issues that one hears and that come up all the time are the need to support smallholder agriculture and food security, but also the big issue of population. Population is one of the difficult issues that is not always discussed but the European Union acts in its programmes with a focus on population through support for programmes which address it. The real issue is that it is important that we hear from our partner countries on this issue and that we do not take any approach that is seen to be dictating to them or linking aid to it. The debate on population needs to be encouraged with our partner countries and we need to listen to them rather than to speak to them and, above all, not to link programmes and funding to specific targets in that regard. It is an issue that is arising increasingly in Africa as one that needs to be addressed and as one which could undermine the progress that is being made, but it is not a simple issue. It is an extremely complex issue. I suppose one does not only have a population programme. The issue of population growth is linked into all the instruments one can apply in terms of development.

Deputy Maureen O'Sullivan also mentioned the issue of trade and development. We discussed this previously, certainly in the context of our own programme. What is important, and the role that Ireland has played with a number of other member states on EU development policy in recent times, is to ensure that the basic fundamental focus remains on the reduction of poverty. The 2005 European consensus was firmly rooted on the reduction of global poverty. That is enshrined in the Lisbon treaty. While we recognise the changes that are taking place in development, especially in countries in sub-Saharan Africa where there is high economic growth, the issue of extreme poverty remains the basic fundamental issue to be addressed. As countries develop, the manner in which one works with them will change, and trade plays an important role. Ireland has played a strong role in ensuring that such focus on poverty in EU development policy remains front and centre.

Finally, Deputy Maureen O'Sullivan mentioned the big question, namely, that if we know where the Irish aid is going and if we focus more on our aid than on EU aid, would we be more effective in terms of the MDGs. The first issue is that Ireland is a member state of the European Union and many of these payments are not so much mandatory, but part of our obligation and responsibility as members of the Union to work together. However, that is not the sole answer.

The real issue is that our voice is used in the setting of policy and programmes. In many cases, there is significant complementarity between what we do and what the effect of the broader EU programmes is. For instance, in Ethiopia, where Ireland is making such a strong contribution with a programme of approximately €26 million per annum, the European Union and its member states as a collective are also making a considerable impact, for instance, in the productive safety nets programme - the cash-for-work scheme that is keeping some 8 million people out of danger from hunger. Ireland is making a considerable contribution and a significant policy contribution there. In fact, remarkably, for a small country, we have driven much of the agenda. However, it must be remembered that the European Union as a collective is also providing enormous funding there and that in 2010 alone, under the EDF, some €58 million was provided for that productive safety nets programme. The way we look at it is that we also have a responsibility to ensure that we have a strong voice in terms of how the programmes are implemented and the policy approach in that regard. That is probably it for now, unless members want to pick up a number of points.

Mr. Colin Wrafter

I wish to cover three points: the question of the space for civil society raised by Deputy Mac Lochlainn; the question of what constitutes EIDHR raised by Deputy Eric Byrne; and a footnote on climate change, which was raised by Deputy Mac Lochlainn.

When discussing EIDHR, I suppose the starting point is Article 21 of the Treaty on European Union, which I will not quote in extenso but which states essentially that it is part of the vocation of the European Union to spread peace, democracy and human rights throughout the world. The premise on which EIDHR works is that it is an instrument to allow the European Union work with civil society. It is quite separate from other instruments which are concerned with working with governments. One of the key principles of EIDHR is that one does not ask for the permission of the host government to get involved in a particular project. That does not necessarily mean the host government likes it or appreciates it, but that is the premise on which EIDHR works.

The money is challenged directly to civil society organisations. The civil society organisations are often locally based in the countries concerned. What happens is they approach the EU delegations or embassies seeking funding for particular projects in their areas and the EU missions or embassies make their initial recommendations to the European Commission in Brussels. Essentially, EIDHR is about working with civil society for human rights and democracy in developing countries.

There is an informal division of labour with the OSCE in the sense that EIDHR, as far as I am aware - if I am incorrect about this, I will come back to the committee - does not get involved in election monitoring in OSCE countries. That is left to the OSCE itself. There is no duplication. Of course, the OSCE is essentially a government organisation whereas EIDHR, by definition, works with civil society. EIDHR does not ask the permission of governments to work in a particular area. I hope that covers Deputy Eric Byrne's question and Deputy Mac Lochlainn's main question.

Climate change, which Deputy Mac Lochlainn mentioned, is something that is proposed for the new instrument for stability as opposed to what is in the current instrument for stability. However, I note that at present the stability instrument is providing support to a security and stabilisation programme in Niger-Mali, which I mentioned already. Of course, that part of the world is suffering serious environmental challenges and already that challenge is part of the overall challenge to stability in those areas. I will leave it at that but, like my colleagues, I am quite happy to answer any more questions.

Ms Anne Barrington

I omitted to address two points made by Deputy Maureen O'Sullivan, one of which was about the bureaucracy. The overall level in the budget for administering the programmes is approximately 5%. However, that covers everything, including the Commission and the external relations missions, etc. I can get back to the committee with the details when we have them, as I am not sure we have all the details yet. We are still at the stage of proposal rather than amounts.

I sense that the EU speaking with one voice is an issue for the Deputy. Given our size, we cannot be everywhere and, as long as the EU's values are promoted in a co-ordinated way in places that we are not, we are happy to be part of that. We fundamentally adhere to the values underpinning the external relations of the Union. Partners like it when member states act together because they see a coherent effort rather than incoherence in terms of views. We have added value that may not be there if we all talk as separate voices.

Chairman

We leave our mark where we are and that is evident, despite being a small country. I thank Ms Barrington, Mr. Wrafter and Mr. Gaffey for attending and for updating the committee on the financing of the EU external programme and the EDF. Their contributions were interesting and members are more aware of what is happening in the EU in the areas we have discussed. I also thank the members for their interesting questions to which comprehensive replies were given.

The joint committee went into private session at 4.35 p.m. and adjourned at 4.45 p.m. until 11.30 a.m. on Thursday, 24 May 2012.