May 1, 2018 / 11:36 PM / 23 days ago

EU proposes jump in crisis funding as U.S. steps back

BRUSSELS (Reuters) - The European Union on Wednesday proposed a 26 percent rise in its foreign aid budget to 123 billion euros ($148 billion) and far larger defense spending for 2021-2027, as the bloc seeks to deepen its global influence while the United States pulls back.

European Union foreign policy chief Federica Mogherini speaks during an international conference on the future of Syria and the region, in Brussels, Belgium, April 25, 2018. REUTERS/Francois Walschaerts

From Mexico to Myanmar, the economically powerful bloc’s foreign aid and development budget is a large part of the “soft power” which supports its international diplomacy, especially as it lacks a unified military.

As the European Commission, the EU executive, set out its total common budget proposal for the 2021-2027 period of some 1.28 trillion euros, a proposed leap in defense spending appeared to signal the growing importance occupied by security in policymakers’ priorities.

In its most ambitious defense plan for decades, the European Commission seeks to spend 22 times more than in the previous period - some 13 billion euros - on a joint weapons fund, defense research, shared financing for battlegroups and allowing a coalition of the willing to conduct more missions abroad.

Overall, the next EU budget sets aside 27.5 billion euros for security and defense over the seven-year period. That includes 2.5 billion euros for an internal security fund to fight extremism and cybercrime.

The aid proposal amounts to a substantial increase on the 2014-2020 external financing budget, which is split between 19 EU “instruments”, each with separate geographical and administrative procedures.

The EU, the world’s biggest aid donor, holds its money for grants and loans through a host of different funds, known as “external action financing instruments”, often making its response to global crises slow and confused.

EU foreign policy chief Federica Mogherini proposed a single fund responsible for managing most of the 123 billion euros planned for foreign and development aid.

A few separate EU funds would still remain, for instance for funding Syrian refugees in Turkey.

Seeking to support Ukraine after its 2014 pro-EU uprising, stem a migrant crisis in Syria and deal with failing states on its borders, the Union wants to reduce reliance on the United States as President Donald Trump pushes the bloc to pay for its own security.

AID GROUPS SKEPTICAL

The United States spends about $50 billion a year in foreign aid, but that includes running diplomatic missions and giving academic grants. Trump has withheld aid in the Middle East and at a recent Syria donor conference, questioning its value and calling on others to pay.

The EU’s proposed “Neighborhood and International Cooperation Instrument” would have a 10.5-billion-euro reserve for the first time to respond to new crises around the world, rather than the current system of negotiating a reallocation of funds from other parts of the budget.

The proposal must still be approved by EU lawmakers and EU governments as part of arduous common budget negotiations.

The EU has been criticized for a lack of strategy in its global development role as France pushes for money for its former colonies in Africa, Spain in Latin America and Britain for the Commonwealth. But the EU money is separate from spending by individual governments.

Finding extra money and slimming the EU funds into a single instrument will not be easy, in part because Britain is set to leave the bloc next year, removing a large contributor.

Politicians and aid groups are expected to resist the change, fearing a loss of money for their causes, officials say.

“By diluting development aid in a broader external instrument framework, the EU will not only allow, but bolster the use of overseas development aid for EU domestic priorities,” said CONCORD Europe, the European confederation of relief and development non-governmental organizations.

($1 = 0.83 euros)

Additional reporting by Alissa de Carbonnel

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