Context of the peer review of the European Union
Political and economic context
A range of political and economic factors have affected the context for the European Union’s development co-operation since the last OECD DAC review in 2012. After years of recession following the 2008-09 financial crisis, a positive economic momentum has taken hold in the European Union (EU), spurred by accommodative monetary policy, mildly expansionary fiscal policy and a recovering global economy. Growth continued in 2017 - although at a moderated pace in the first quarter of 2018 - with income inequality in EU countries on average lower than in other OECD countries. At the same time, unemployment is higher than it was before the global financial crisis, while real wages are stagnating in a number of member states.
In this challenging budgetary environment, the EU’s overall budgetary disbursement fell slightly from EUR 135 billion in 2012 to EUR 133 billion in 2017 in real terms (2016 prices). On the other hand, the gross disbursement of EU institution’s official development assistance (ODA) increased from USD 17 billion to USD 19 billion over this period, although only roughly half of this amount comes from the above regular EU budget.
Institutionally, the European Union has strengthened its co-ordinating role with member states, adopting the Global Strategy for the European Union’s Foreign and Security Policy in 2016 and the new European Consensus on Development in 2017 as a comprehensive common framework for European external action and development co-operation. At the same time, however, a number of member countries are experiencing a rise in nationalist sentiment and backlash against multilateralism, following an unprecedented surge in migrants and refugees from developing countries in 2015 and perceptions since that migrant in-flows continue to be higher than they are in reality.
A further impact on the context is the vote supporting a United Kingdom withdrawal from the EU, commonly referred to as Brexit, or British exit. On 23 June 2016, citizens of the UK voted to leave the European Union. On 29 March 2017, the UK formally notified the European Council of its intention to leave the EU by triggering Article 50 of the Lisbon Treaty. For the time being, the UK remains a full member of the EU, providing an estimated 7% of its overall budget, with rights and obligations continuing to be fully applied (OECD, 2018). In 2016, the United Kingdom channelled approximately 12% of its total ODA through the EU budget and the European Development Fund. In turn, this represented approximately 12% of the EU’s total external action finance (OECD data, House of Lords, 2018). For a glossary of the European Union’s development co-operation system, see Annex B.
Sources
European Commission (n.d.), Brexit negotiations (website), https://ec.europa.eu/commission/brexit-negotiations_en, accessed 12 July 2018.
European Commission (2018), “Memorandum of the European Commission to the OECD DAC Peer Review”, unpublished, European Union.
European Union (n.a.), Budget (website and database), https://europa.eu/european-union/topics/budget_en, accessed on 23 July 2018.
House of Lords (2018), “Brexit: Overseas Development Assistance.” United Kingdom parliamentary briefing note, available at https://researchbriefings.parliament.uk/ResearchBriefing/Summary/LLN-2018-0020#fullreport.
OECD (2018), “European Union 2018”, OECD Economic Surveys, OECD Publishing, Paris, http://www.oecd.org/eco/surveys/European-union-2018-OECD-economic-survey-overview.pdf.
OECD (2012), Review of the Development Co-operation Policies and Programmes of the European Union, http://www.oecd.org/dac/peer-reviews/peer-review-europeanunion.htm.