A world player - The European Union’s external relations

About half the money spent to help poor countries comes from the European Union or its individual member states, making the EU the world’s biggest aid donor. But development assistance is not just about providing clean water and surfaced roads, important though those are. It is also about helping the developing countries improve their trade performance by giving them better access to the EU market. This should enable them to develop and strengthen their external trade and so take advantage of globalisation.

Not all have succeeded in doing this. Although the African, Caribbean and Pacific (ACP) countries have a special relationship with the European Union, their share of EU markets has continued to fall, and they have become increasingly marginalised in world trade.

This is why the EU’s development strategy also focuses on helping poor countries improve their infrastructures, develop their productive potential and make their public administration and institutions more efficient. With this support, some will be able to grasp trade opportunities and secure more inward investment to broaden their economic base. This is essential in enabling countries to integrate into the global economy and achieve sustainable growth and development.

More specifically, the Union is combining trade and aid in a new way in the next generation of ‘economic partnership agreements’, currently being negotiated with the ACP countries and due to be in place by 2008. The idea is to help the ACP countries integrate with their regional neighbours as a step towards global integration, and to help them build institutional capacities and apply principles of good governance. At the same time, the EU will continue to open its markets to products from the ACP group, and other developing countries.

The European Union and its member countries pay out more than €30 billion a year in official aid to developing countries, of which about €6 billion is channelled through the EU institutions. The Union has committed itself to raising the annual total to €39 billion by 2006. Although EU members, like other industrialised countries, have accepted a target of spending 0.7% of their GNP on aid each year, only Denmark, Luxembourg, the Netherlands and Sweden have reached this target. The others have pledged to catch up. The average for the EU as a whole is 0.34%, higher than the United States or Japan.

Access to water and a fair sharing of trans-frontier water resources are major issues in all regions of the world and will be among the biggest development challenges of the 21st century. The EU’s Water for Life initiative, launched in 2002, seeks to bring safe water and sanitation to the world’s poorest regions, particularly in Africa but also in the Caucasus and central Asia, the Mediterranean and Latin America. The European Union has made one billion euro available to finance this initiative.

The ultimate objective of EU policy is to give people in less advanced countries control over their own development. This is why EU priorities are to attack the sources of their vulnerability: ensuring better food and clean water; improving access to education, healthcare, employment, land and social services; providing better infrastructure and a better environment. EU initiatives also aim at eradicating diseases and providing access to cheap medicines to combat scourges like HIV/AIDS. The EU also seeks to cut the debt burden on poor countries.

Recognising that peace is a basic condition for sustainable development, the Union agreed in 2004 to set up a €250 million fund called the ‘Peace facility’, to support African peacekeeping and conflict prevention operations.