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Monday, August 19, 2013

What the Egyptian crisis tells us about the (in)effectiveness of EU aid

As the crisis in Egypt continues to intensify by the day, European Council President Herman Van Rompuy and Commission President José Manuel Barroso warned in a joint statement yesterday that the EU would "urgently review in the coming days its relations with Egypt" - including the new aid package worth around €5 billion that was pledged to Cairo last year.

EU member states' ambassadors are holding talks today, followed by a meeting of EU foreign ministers on Wednesday. For the moment, though, Egypt's new military-backed government does not seem very impressed by threats coming from Brussels. As Foreign Minister Nabil Fahmy put it,
"I want to determine what is useful and what is not and what aid is being used to pressure Egypt and whether this aid has good intentions and credibility. We are not looking to replace one friend with another but we will look out to the world and continue to establish relations with other countries so we have options."
There is plenty of political posturing in Mr Fahmy's words, but this kind of reaction inevitably raises questions over how the EU has handled its relations with Northern African countries over the past few years, particularly via the European Neighbourhood Policy (ENP). 

In a report we published in May 2011, we stressed how, in the name of 'stability', the EU had consistently increased funding allocations for countries like Egypt and Tunisia, despite the European Commission itself noting limited progress on human rights and democratic reform over the years. In particular, we argued that the Commission's reliance on so-called 'budget support' - whereby EU aid money is given directly to neighbouring countries' governments and then directed towards specific projects by the latter - was clearly problematic, given the lack of transparency on how these funds were used.

The European Court of Auditors recently made a similar criticism in a tough report on EU aid to Egypt, where it suggested that the European Commission had been "too flexible" in assessing whether the Egyptian authorities were actually meeting the conditions for granting 'budget support'. The Court noted that,
"The Commission and EEAS [the EU's diplomatic service headed by Baroness Catherine Ashton] have not been able to manage EU support to improve governance in Egypt effectively. This was partly due to the difficult conditions they have faced in Egypt but also to shortcomings in the way the Commission and EEAS have managed their cooperation with Egypt."
The recent events in Egypt add one further element of concern. Despite its generous funding (Egypt was initially allocated approximately €1 billion for the period 2007-13, around 60% of which via 'budget support'), the EU seems to have failed to gain any significant leverage on the Egyptian establishment. Calls to stop the violence have been ignored - and the threat to stop the disbursement of aid has so far been openly snubbed.

This is of course a complex political situation and the circumstances are difficult, but given that the ENP is a very political aid instrument (seen by the EU as a tool to exercise its 'soft power'), it is getting increasingly difficult to see what value it has added in the case of Egypt.


Rik said...

Egypt and in fact the whole Arab Spring is/was a complete failure of Western diplomacy and foreign politics.

1. Start of the Spring
At that point there should have been considerable doubt if it would give a positve outcome (aka moderate democratic forces into power). There should have been an alternative scenario, a plan B.
It was from the beginning highly doubtful if these moderate forces could actually take over countries. Countries like Jemen of course always a no way.
But in countries like Egypt you have 2 powerful well organised groups (pretty standard situation all ober the region btw):
-Army/Mubarak/His party;
-Muslim Bs.
The other group(s) had no organisation at all and it was also unclear how they should get one. The group compared to the whole population was pretty small anyway and no major institutions are likley to support it as well (these go for the potential winners). You need numbers and an organisation.
When Mubarak's party got taken out of circulation and with the army inactive it was pretty clear who would win the election.
Now basically Mubarak's team has been restored by force.

2. On the use of force.
It is clear that the beards will not back off unless force would be used. So would the Western wannabees btw.
That is what is happening. And as usual in the 3rd world with a lot of unnecessary violence. But clearly to be preferred from the army's pov with creating a permanent stand off. From their perspective pushing through looks the best strategy.

3. On civil war
A real civil war country wide is highly unlikely. The country is a river in a lot of sand. Nearly impossible to cut pieces out as a basis for an uprising.
Could be an Iraq sort of situation but not a Syrian/Libyan one. You need a North South split for that, won't happen. Probably some regional stuff in the Sinai but that is remote.

4. The EU had not much to do with creating this situation. Mainly the US and France (and partly the UK) who messed it up in the first place. And didnot adjust when the outcome of the Spring thing became clear. The only thing the EU could do was follow after that. Not that they very likely had made better strategic decisions. They simply missed lesson one: strategic decision are to assure your position is optimised. Not that people start to like you. Buy a dog if you need that. If they do it is a plus if not it hardly matters.
The aid of course was a complete joke. But so is that to say the Palestinians and a few others.

5. Syria is probably worse than this. Clear that Assad would not back off. He is backed by nearly half the population who is scared of the other half. Not simply only an army they would be fighting against. And with a parties one considerably better armed it is basically clear who will win.
Unless you go in yourself the odds for a successful uprising were awful. Next to creating a haven for all sort of dodgy people is hardly a success.
Should have been used to cut the Syrians loose from Iran (or let them dump Hexbollah) not as now put them even stronger in that camp. Next to messing the relation with Russia up like Ba is doing and he needs them for Iran not too far from now.

One complete disaster by a bunch of incompetents. Considerably worse than George W even which is an achievement by itself. At least he could not avoid Afghanistan and Iriq was at least a sort of gamble with a degree of uncertaiunty on the outcome. Not a more or less guaranteed disaster as this.

6. In the process make all oil people in the region doubt if they can rely on the West when it comes to it. Tbh Putin seems a much more reliable ally and so does China.

Jesper said...

Almost 500 years ago Macchiavelli wrote about the relationship between money and power. It seems that despite his well known writings there still is a misunderstanding:

A position of power will get you money. Money will always flow to the powerful.
Elections are said to be bought but from whom? The ones who vote, also known as the voters.
Elected officials can be bought, what is bought/rented is their power.
Some powerful people simply use power to take/steal money.

Yet people still think that money trumps power?

I suppose the misconception that money trumps power provides elected people with a currently acceptable excuse for selling out to big business and their lobbyists. Always good to have an excuse for doing something bad...

jon livesey said...

I suppose it will seem cynical, but the very idea of the EU "influencing" countries like Egypt gives me the giggles.

Sure, if the EU is offering cash, Egypt will take it, but Europe abdicated any notion of influence over its "near abroad" to the US and Russia decades ago.

It's the old business of "soft" power not really being power at all. If all you can do is offer or withhold cash, and you can't send a fleet, you may as well forget it. The kind of people we are talking about are not impressed by cash, except the kind that ends up in a numbered bank account.

And by the way, how much are taxpayers in the UK, paying so that the EU can play at being a completely ineffective "world power"?

Rollo said...

EU aid is nothing to do with helping other places: it is projection of EU power on to others as part of the propaganda process. And it is very costly.
The only way we should be giving aid is our own specific targeted aid using British products and services to those at the bottom end of the food chain; and encouraging trade. The EU is destroying trade with the weaker countries, while

Anonymous said...

The idea of the eussr having a positive influence on any democracy is risible it is after all a corruption ridden democraticaly deficient body itself Ashton for example has never been elected to any office in her life.

jon livesey said...

Rollo: yes, I agree with that. I've been asking for years how much good the UK could do in the Third World with the L10bn in Foreign Aid we give the EU every year.

It's a crazy World when billions of people are living on a Dollar a day or less, and the UK taxpayer is giving Foreign Aid to French and Italian farmers so that they can buy their second German BMW.

Rollo said...

Jon I am all in favour of foreign aid where it helps others to trade on a fair trade basis with us, which is what they need. And if we procure our offerings in the UK, the nation gets most of the funding back through taxation, employment etc; and can afford to do more, better. When we chuck money at the EU, precious little is spent here and it all disappears: too much of it into the Brussels machinery.