EU Parliament votes for better EU strategy that combines public and private sectors to jointly achieve the SDGs
by Jennifer Richard
The EU’s development and cooperation policy is essential in order to eradicate poverty and achieve sustainable development in countries in urgent need. With the own-initiative report, which was adopted today by the MEPs and led by Charles Goerens, the European Parliament gives strong guidelines and ideas for the revision of the European Financial Architecture for Development (EFAD). It calls for a coherent strategy from the EU, led by Team Europe, to strengthen good governance and human and economic development while protecting the environment in developing and least-developed non-EU countries.
The global context pushes us to adapt the development aid model in order to adapt to current challenges. Indeed, the pandemic of Covid-19 has deepened the already significant Sustainable Development Goals (SDG) financing gap. This financial gap is reached at 2,500 billion dollars annually but according to one estimate, this gap should increase by 70% to reach 4,200 billion dollars (3,700 billion EUR). The Russian invasion in Ukraine is causing a tremendous humanitarian crisis in Europe with consequences across the world as well, such as critical threats for food security, access to energy and basic common goods and unprecedented pressure on already scarce aid funds from donor countries, among others.
To address these challenges, EFAD mobilises the whole financial development bank landscape: not only the European Investment Bank which is the financial arm of the EU, but also the European Bank for Reconstruction and Development and the national development banks, together with private actors.
Renew Europe strongly believes that the new EFAD will improve the impact of European development policy in order to increase its inclusivity, effectiveness and visibility in the world. Our group wants to strengthen the coherence of financial institutions’ activities with EU external policy objectives. We therefore call for the creation of a genuine, inclusive and open European financial architecture for development led by the Policy first principle. We want a better coordination between all European stakeholders of this essential EU policy. It is fundamental today to have a principles-driven, strong and effective EU development policy, especially in a context where the financial resources are limited. Moreover, Renew Europe is convinced that the European Union should work on the mobilisation of additional capital, both private and public beyond Official Development Aid (ODA).
Charles Goerens (Demokratesch Partei, Luxembourg), rapporteur on this report and Renew Europe coordinator in the committee on Development, declared: ‘With aggravating poverty and inequalities around the world, we can honestly say: the traditional development aid model on its own cannot achieve the SDGs. It is a high time to better interlink and strengthen the multiple and diverse network of actors in the development finance landscape and to avoid fragmentation and incoherence. The new geopolitical realities and global challenges provides us with an actual momentum to better coordinate the entire European development financing ecosystem. The adoption of this report on the new European Financial Architecture for Development, is an important contribution to this discussion, marking one crucial step towards improving the impact of European development finance while increasing private investment around the world’.
